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2009 Stevens-Henager College v. Eagle Gate College, Provo College, Mosese Iongi, Trevor Smith, Wallace Rogers, Richard Horwitz, Steven Todd Knecht, and Jana Miller : Brief of Appellee Utah Court of Appeals
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Original Brief Submitted to the Utah Court of Appeals; digitized by the Howard W. Hunter Law Library, J. Reuben Clark Law School, Brigham Young University, Provo, Utah; machine-generated OCR, may contain errors. Thomas R. Karrenberg, Jennifer R. Eshelman; Anderson and Karrenberg; Nathan B. Wilcox; Clyde Snow Sessions and Swenson; Attorneys for Appellees. Robert E. Mansfield, Troy L. Booher; Snell and Wilmer LLP; Attorneys for Appellant.
Recommended Citation Brief of Appellee, Stevens-Henager College v. Eagle Gate College, No. 20090815 (Utah Court of Appeals, 2009). https://digitalcommons.law.byu.edu/byu_ca3/1917
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STEVENS-HENAGER COLLEGE,
Plaintiff/Appellant, Case No. 20090815 vs.
EAGLE GATE COLLEGE, PROVO Appeal from the Third District Court, COLLEGE, MOSESEIONGI, Salt Lake County, The Honorable TREVOR SMITH, WALLACE Robert Faust ROGERS, RICHARD HORWITZ, District Court No. 040921860 STEVEN TODD KNECHT, and JANA MILLER,
Defendants/Appellees.
BRIEF OF APPELLEES EAGLE GATE COLLEGE, PROVO COLLEGE AND JANA MILLER
SNELL & WILMER ANDERSON & KARRENBERG Robert E. Mansfield Thomas R. Karrenberg (#3726) Troy L. Booher Jennifer R. Eshelman (#9155) 15 West South Temple, Suite 1200 50 West Broadway, Suite 700 Salt Lake City, Utah 84101 -1004 Salt Lake City, Utah 84101 -2035 Telephone: (801) 534-1700 Counsel for Plaintiff/Appellant Stevens-Henager College CLYDE SNOW & SESSIONS Nathan B. Wilcox (#6685) 201 S. Main Street, #1300 Salt Lake City, Utah 84111
Counsel for Defendants/Appellees Eagle Gate College, Provo College and Jana Miller
FILED UTAH APPELLATE COURTS APR 22 2010 UTAH COURT OF APPEALS
STEVENS-HENAGER COLLEGE,
Plaintiff/Appellant, Case No. 20090815 vs.
EAGLE GATE COLLEGE, PROVO Appeal from the Third District Court, COLLEGE, MOSESEIONGI, Salt Lake County, The Honorable TREVOR SMITH, WALLACE Robert Faust ROGERS, RICHARD HORWITZ, District Court No. 040921860 STEVEN TODD KNECHT, and JANA MILLER,
Defendants/Appellees.
BRIEF OF APPELLEES EAGLE GATE COLLEGE, PROVO COLLEGE AND JANA MILLER
SNELL & WILMER ANDERSON & KARRENBERG Robert E. Mansfield Thomas R. Karrenberg (#3726) Troy L. Booher Jennifer R. Eshelman (#9155) 15 West South Temple, Suite 1200 50 West Broadway, Suite 700 Salt Lake City, Utah 84101-1004 Salt Lake City, Utah 84101-2035 Telephone: (801) 534-1700 Counsel for Plaintiff/Appellant Stevens-Henager College CLYDE SNOW & SESSIONS Nathan B. Wilcox (#6685) 201 S. Main Street, #1300 Salt Lake City, Utah 84111
Counsel for Defendants/Appellees Eagle Gate College, Provo College and Jana Miller TABLE OF CONTENTS Page
STATEMENT OF JURISDICTION 1
ISSUES PRESENTED AND STANDARD OF REVIEW 1
DETERMINATIVE PROVISIONS 4
STATEMENT OF THE CASE 7
I. Nature of the case 7
II. Course of Proceedings & Statement of Facts 9
A. Plaintiff s Complaint 9
B. Scheduling Orders and Plaintiffs Motion to Compel 11
C. The First Motion for Summary Judgment 14
D. Plaintiffs Motion for Relief From or For Reconsideration of the Court's Order Granting Summary Judgment 17
E. The Eagle Gate Parties' Motion to Strike the Preliminary Expert
Report ofBradTownsend 18
F. The Eagle Gate Parties' Second Motion for Summary Judgment 19
G. The Eagle Gate Parties' Motion in Limine 20
SUMMARY OF ARGUMENT 20
ARGUMENT 22 I. The Trial Court Properly Granted the First Motion for Summary Judgment 22
A. Plaintiff Failed to Substantiate Its Damages Through Timely Expert Testimony 23
B. Plaintiff Failed to Present Evidence of the Fact of Damages Through Non-Expert Testimony 26
i Carol Gastiger's Testimony 30
Vicki Dewsnup's Testimony 33
Carl Barney's Testimony 36
II. The Court Correctly Ordered Plaintiffs Belated Expert Report to be Stricken and Was Well Within Its Discretion to Refuse to Allow It 38
III. Regardless of Its Decision on Summary Judgment, the Trial Court Correctly Excluded Evidence of Damages 43
IV. The Court Properly Granted the Second Motion for Summary Judgment
On Plaintiffs CFAA Claim 43
CONCLUSION 45
CERTIFICATE OF SERVICE 46
ADDENDUM OF EXHIBITS 47
ii TABLE OF AUTHORITIES
Cases Page
Anderson Development Co. v. Tobias, 2005 UT 36, 116 P.3d 323 29-30
Bodell Const. Co. v. Robbins, 2009 UT 52, 215 P.3d 933 2
Brown v. Jorgensen, 136 P.3d 1252, 1258 (Utah Ct. App. 2006) 32, 36
Diversified Holdings, L.C. v. Turner, 2002 UT 129, 63 P.3d 686 4
Kibatrick v. Wiley, Rein & Fielding, 37 P.3d 1130, 1146 (Utah 2001) 35, 37
Lee v. Langlev, 2005 UT App 339, 531 Utah Adv. Rep. 4 4
Loporto v. Hoegemann, 1999 UT App 175, 982 P.2d 586 42
McKee v. Williams, 741 P.2d 978 (Utah Ct. App. 1987) 42
Normandeau v. Hanson Equip., Inc., 2007 UT App 382, 174 P.3d 1 (rev'd on the Grounds, 2009 UT 44, 215 P.3d 152) 4
Posner v. Equity Title Ins. Agency, 2009 UT App 347, 222 P.3d 775 2, 24-25, 39
Renegade Oil, Inc. v. Progressive Cas. Ins. Co., 2004 UT App 356, 101 P.3d 383 ....28-29
Schmitz v. Yukon-Koyukuk School Dist, 147 P.3d 720, 727 (Alaska 2006) 24
Sohm v. Dixie Eve Center, 2007 UT App 235, 166 P.3d 614 27-28
Truegreen Co., L.L.C. v. Mower Bros., Inc., 199 P.3d 929, 934 (Utah 2008) 34-35
Western Water, LLC v. Olds, 2008 UT 18, 184 P.3d 578 1-2
Statutes
Utah Code Ann. §§ 78A-4-103(2)(a) 1
Utah Code Ann. §§ 78-A-4-103(2)(j) 1
iii Rules
Utah R. Civ. P. 16 4
Utah R. Civ. P. 26 4
Utah R. Civ. P. 37 5, 39
Utah R. Civ. P. 37(b)(2) 39
Utah R. Civ. P. 37(b)(2)(B) 39
Utah R. Civ. P. 37(b)(2)(C) 39
Utah R. Civ. P. 37(f) 39
18 U.S.C.A. § 1030(a)(5)(b)(2003) 6,43
18 U.S.C.A. § 1030(g) (2003) 6, 43
iv STATEMENT OF JURISDICTION
This Court has jurisdiction pursuant to Utah Code Ann. § 78A-4-103(2)(a),
103(2)0.
ISSUES PRESENTED AND STANDARD OF REVIEW
Issue No. 1
1. Whether the trial court correctly granted partial summary judgment dismissing Plaintiffs claims for damages against Eagle Gate College, Provo College and
Jana Miller (collectively "the Eagle Gate Parties") where Plaintiff failed to produce evidence to substantiate its damages.
This issue turns on whether Plaintiff submitted evidence sufficient to raise a genuine issue of material fact as to whether Plaintiff could present any evidence that it suffered damages as a result of the alleged actions of the Eagle Gate Parties.
Standard of Review
A grant of summary judgment is reviewed for correctness. See, e.g., W. Water, LLC v. Olds, 2008 UT 18, f 14, 184 P.3d 578.
Issue No. 2
2. Whether the trial court correctly ordered that Plaintiffs untimely expert report be stricken and, on a related note, acted within its broad discretion in refusing to allow Plaintiff to file an expert report approximately nine months after the deadline established by the operative scheduling order.1
1 Plaintiff has framed this issue as a subsequent ruling based at least in part upon the trial court's earlier ruling granting the Eagle Gate Parties' Motion for Summary
1 Standard of Review
A decision to strike an expert report submitted after expiration of the established deadline is reviewed both for correctness and abuse of discretion. Posner v. Equity Title
Ins. Agency, Inc., 2009 UT App 347, \ 8, 222 P.3d 775; Bodell Constr. Co. v. Robbins, 2009
UT52,lfl7,215P.3d933.
Issue No. 3
3. Whether the trial court correctly granted partial summary judgment dismissing Plaintiffs claim for injunctive relief under the Federal Computer Fraud and
Abuse Act when Plaintiff failed to present evidence of damages in the amount of $5,000 the threshold amount for such a claim.
This issue turns on whether Plaintiff presented sufficient evidence to substantiate damages aggregating at least $5,000 in value, the statutory threshold for a civil action under the CFAA.
Standard of Review
A grant of summary judgment is reviewed for correctness. See, e.g., W. Water, 2008
UT18,H14.
Judgment. Actually, this issue is entirely separate and distinct from the trial court's earlier ruling. Plaintiff designated its expert and served its expert report approximately nine months too late and after the hearing on the Eagle Gate Parties' Motion for Summary Judgment; that is why it was stricken. 2 Plaintiff has also framed this issue as a subsequent ruling based at least in part upon the trial court's earlier ruling granting the Eagle Gate Parties' Motion for Summary Judgment. In reality, the trial court's decision granting summary judgment for the Eagle Gate Parties on Plaintiffs CFAA claim may stand regardless of the trial court's ruling on the earlier summary judgment motion. While both of the motions for summary judgment were granted for the same reason—Plaintiffs complete failure to substantiate damages— they are separate and distinct and one does not flow from the other.
2 Issue No. 4.
4. Whether the trial court acted within its broad discretion when it granted the
Eagle Gate Parties' Motion in Limine precluding Plaintiff from presenting evidence of damages at trial.3
This issue turns in part on whether the trial court had any reasonable basis for granting the Motion in Limine, including that (1) allowing the presentation of damages would be contrary to the law of the case; (2) evidence of monetary damages was not relevant to the issues to be decided at trial; and (3) introduction of evidence of Plaintiff s alleged monetary damages would be more prejudicial than probative. Should the Court of
Appeals reverse the grant of summary judgment on the damages claims, this issue will then turn on whether the trial court abused its discretion in striking Plaintiffs untimely expert report. If not, then damages in the form of expert testimony were properly excluded regardless of the earlier ruling on summary judgment.
Plaintiff has also framed this issue as a subsequent ruling based at least in part upon the trial court's earlier ruling granting the Eagle Gate Parties' Motion for Summary Judgment. While the trial court's decision on this issue was perhaps related to its earlier ruling in part, this issue also stands alone, however, on one key point. Regardless of the trial court's earlier ruling on the Motion for Summary Judgment, Plaintiffs expert report and expert testimony on the issue of damages were properly excluded pursuant to the trial court's ruling striking Plaintiffs expert report.
3 Standard of Review
A decision to admit or exclude evidence is reviewed under an abuse of discretion standard. E.g., Normandeau v. Hanson Equip., Inc., 2007 UT App 382, f 9, 174 P.3d 1
(rev'd on other grounds, 2009 UT 44, 215 P.3d 152); Lee v. Langley, 2005 UT App 339, f
9, 121 P.3d 33 (citations omitted); Diversified Holdings, L.C. v. Turner, 2002 UT 129, % 6,
63 P.3d 686 (citations omitted).
DETERMINATIVE PROVISIONS
Utah R. Civ. P. 16:
(b) Scheduling and management conference and orders. In any action, in addition to any other pretrial conferences that may be scheduled, the court, upon its own motion or upon the motion of a party, may conduct a scheduling and management conference. The attorneys and unrepresented parties shall appear at the scheduling and management conference in person or by remote electronic means. Regardless whether a scheduling and management conference is held, on motion of a party the court shall enter a scheduling order that governs the time:
(b)(1) to join other parties and to amend the pleadings;
(b)(2) to file motions; and
(b)(3) to complete discovery.
The scheduling order may also include:
(b)(4) modifications of the times for disclosures under Rules 26(a) and 26(e)(1) and of the extent of discovery to be permitted;
(b)(8) any other matters appropriate in the circumstances of the case.
(d) Sanctions. If a party or a party's attorney fails to obey a scheduling or pretrial order, if no appearance is made on behalf of a party at a scheduling or pretrial conference, if a party or a party's attorney is substantially unprepared to participate in the conference, or if a party or a party's attorney fails to participate
4 in good faith, the court, upon motion or its own initiative, may take any action authorized by Rule 37(b)(2).
Utah R. Civ. P. 26:
(a) Required disclosures; Discovery methods.
(a)(3) Disclosure of expert testimony.
(a)(3)(A) A party shall disclose to other parties the identity of any person who may be used at trial to present evidence under Rules 702, 703, or 705 of the Utah Rules of Evidence.
(a)(3)(B) Unless otherwise stipulated by the parties or ordered by the court, this disclosure shall, with respect to a witness who is retained or specially employed to provide expert testimony in the case or whose duties as an employee of the party regularly involve giving expert testimony, be accompanied by a written report prepared and signed by the witness or party. The report shall contain the subject matter on which the expert is expected to testify; the substance of the facts and opinions to which the expert is expected to testify; a summary of the grounds for each opinion; the qualifications of the witness, including a list of all publications authored by the witness within the preceding ten years; the compensation to be paid for the study and testimony; and a listing of any other cases in which the witness has testified as an expert at trial or by deposition within the preceding four years.
Utah R. Civ. P. 37:
(b) Failure to comply with order.
(b)(2) Sanctions by court in which action is pending. If a party fails to obey an order entered under Rule 16(b) or if a party or an officer, director, or managing agent of a party or a person designated under Rule 30(b)(6) or 31(a) to testify on behalf of a party fails to obey an order to provide or permit discovery, including an order made under Subdivision (a) of this rule or Rule 35, unless the court finds that the failure was substantially justified, the court in which the action is pending may take such action in regard to the failure as are just, including the following:
5 (b)(2)(A) deem the matter or any other designated facts to be established for the purposes of the action in accordance with the claim of the party obtaining the order;
(b)(2)(B) prohibit the disobedient party from supporting or opposing designated claims or defenses or from introducing designated matters in evidence;
(b)(2)(C) strike pleadings or parts thereof, stay further proceedings until the order is obeyed, dismiss the action or proceeding or any part thereof, or render judgment by default against the disobedient party [.]
(f) Failure to disclose. If a party fails to disclose a witness, document or other material as required by Rule 26(a) or Rule 26(e)(1), or to amend a prior response to discovery as required by Rule 26(e)(2), that party shall not be permitted to use the witness, document or other material at any hearing unless the failure to disclose is harmless or the party shows good cause for the failure to disclose. In addition to or in lieu of this sanction, the court may take any action authorized by subdivision (6)(2).
18 U.S.C.A. § 1030(g) (2003) Computer Fraud and Abuse Act
A civil action for a violation of this section may be brought only if the conduct involves 1 of the factors set forth in clause (i), (ii), (iii), (iv), or (v) of subsection (a)(5)(B).
18 U.S.C.A. § 1030(a)(5)(b) (2003)
(i) loss to 1 or more persons during any 1-year period . . . aggregating at least $5,000 in value; (ii) the modification or impairment, or potential modification or impairment, of the medical examination, diagnosis, treatment, or care of 1 or more individuals; (iii) physical injury to any person; (iv) a threat to public health or safety; or (v) damage affecting a computer system used by or for a government entity in furtherance of the administration of justice, national defense, or national security[.]
6 STATEMENT OF THE CASE
I. Nature of the case
This appeal principally involves Plaintiffs repeated failure over nearly three years of litigation to substantiate damages for any of its seven claims against the Eagle Gate
Parties and specifically in opposition to the Eagle Gate Parties' Motion for Summary
Judgment (re: Claims Against Eagle Gate College, Provo College and Jana Miller) ("First
Motion for Summary Judgment"), which failure lead to grant of summary judgment dismissing Plaintiffs claims for damages.4 (Mem. Decision, Jan. 30, 2008, Addendum
Ex. A, R. 3564-3569; Order Granting Summ. J., Mar. 10, 2008, Addendum Ex. B, R.
3670-3682.) In particular, the trial court found that Plaintiff had failed to provide the type of evidence that it claimed was necessary to show damages, i.e., expert testimony, and, therefore, the trial court properly entered summary judgment dismissing Plaintiffs
claims for damages. (Mem. Decision 2-3, Addendum Ex. A, R. 3565-3566.)
Plaintiffs claims arise in large part from an event that occurred in 2004, when Eagle
Gate hired two of Plaintiff s former employees, Wallace Rogers and Todd Knecht. (Compl.
6-7, R. 6-7.) Not long after being hired, these individuals accessed Plaintiffs database
4 Although there were multiple motions for summary judgment filed in the matter below, only the trial court's rulings regarding the Eagle Gate Parties' 2007 Motion for Summary Judgment (re: Claims Against Eagle Gate College, Provo College and Jana Miller), which the trial court granted as to claims for damages (Mem. Decision, Jan. 30, 2008, Addendum Ex. A, R. 3564-3569; Order Granting Summ. J, Mar. 10, 2008, Addendum Ex. B, R. 3670-3682), and the Eagle Gate Parties' 2009 Motion for Summary Judgment (re: Equitable claims against Eagle Gate College, Provo College and Jana Miller), which the trial court granted in part (Mem. Decision, Aug. 31, 2009, Addendum Ex. C, R. 4364-4370) are relevant for purposes of this appeal.
7 online and downloaded a list of Plaintiffs potential students. (Aff. of Wallace Rogers
("Rogers Aff.") ffl[ 5-7, R. 358-365.) Very shortly after Eagle Gate learned of these inappropriate actions, Eagle Gate terminated Messrs. Rogers and Knecht and the lead list was incontrovertibly destroyed. (Id. lfl[ 8 & 24, R. 358-365; Dep. of Jana Lee Miller
("Miller Dep.'5), 67:23-68:20, Jan. 12, 2005, Ex. A to Mem. in Opp'n to PL's Mot. for
Partial Summ. J., R. 4295.) Eagle Gate also instructed its remaining employees in writing on June 11, 2004, that such conduct would not be tolerated, in accordance with Eagle
Gate's long-standing policy that employees must "perform their work with ... the highest standards of law and ethics." (Mem. to Eagle Gate Admissions Dept, Ex. O to
Mem. in Opp'n to PL's Mot. for Partial Summ. J., R. 4295.) Over four months later, in
October 2004, Plaintiff forged ahead with its claims against the Eagle Gate Parties, asserting that the lead list had been used by the Eagle Gate Parties, and that Eagle Gate had improperly hired its former employees. (Compl. 5-7, R. 5-7.) Plaintiff further asserted that it had computed damages in excess of $10,250,000. (Id. at 25-30, R. 25-30.)
This appeal also involves the trial court's subsequent grant of summary judgment on Plaintiffs equitable claim under the CFAA (Mem. Decision 3, Aug. 31, 2009,
Addendum Ex. C, R. 4366), and two evidentiary rulings made following the initial grant of summary judgment. Specifically, the trial court granted a motion in limine precluding
Plaintiff from presenting evidence of damages (id. at 6, R. 4369) and granted a motion to strike Plaintiffs belated expert report (Minute Entry, May 30, 2008, Addendum Ex. D, R.
3994-3996). Contrary to Plaintiffs framing of these issues, these rulings were not simply
"based upon the summary judgment ruling," on the First Motion for Summary Judgment
8 (Appellant Br. 12). Indeed, two of these rulings, the striking of Plaintiff s untimely expert report and the exclusion of evidence of damages, are evidentiary rulings that the Court must consider under the abuse of discretion standard, rather than simply viewing them through the lens of the ruling on the First Motion for Summary Judgment.
II. Course of Proceedings & Statement of Facts
A. Plaintiffs Complaint
Plaintiff initiated this action on October 16, 2004, filing a Complaint against the
Eagle Gate Parties, among others, asserting claims for Breach of Contract,5 Violation of the Uniform Trade Secrets Act, Interference with Contractual Relations, Interference with
Prospective Economic Relations, Violation of the CFAA, Statutory Unfair Competition, and Civil Conspiracy. (Compl., R. 1-30.) Plaintiff claimed that it had incurred, and was therefore entitled to, damages in amounts "not less than" $10,250,000. {Id. at 25-30
(emphasis added), R. 25-30.) Despite the averments in its Complaint of a minimum damage amount of not less than $10,250,000, on November 15, 2004, Plaintiff represented in its
Initial Disclosures that it had "not yet computed the damages it has suffered" as alleged in the Complaint. (PL's Rule 26(a) Initial Disclosures 7, Ex. A to Aff. of Nathan B. Wilcox,
R. 3170.) Even more remarkable, when challenged in discovery for the factual basis for its purported damages, Plaintiff represented that it could not provide the factual basis for its minimum $10,250,000 damage claim because its evidence of damages would have to come in the future from its yet to be disclosed experts and expert reports. {See PL's Resp. to
5 The Breach of Contract Claim was only asserted against Ms. Miller. (Compl. 16-17, R. 16-17.)
9 Jana Miller's First Set of Interrogs. ("Resp. to Miller Interrogs."), Nos. 1, 2, 4, 5, and 6,
Ex. E to Mem. in Supp. of Mot. for Summ. J., Addendum Ex. E, R. 3266-3277); (PL's
Resp. to Eagle Gate College and Provo College's First Set of Interrogs. ("Resp. to Eagle
Gate Interrogs."), Nos. 1, 2, 7, 8, 9, 10, and 12, Ex. E to Mem. in Supp. of Mot. for
Summ. J., Addendum Ex. F, R. 3279-3298.)
Plaintiff also makes the conclusory allegation in its Complaint and brief that Eagle
Gate improperly hired Plaintiffs employees and that several of these employees used
Plaintiffs 'lead list" to recruit students, thereby causing harm to Plaintiff. (CompL 5-7,
R. 5-7.) There is no dispute, however, that Eagle Gate terminated the two employees who admitted downloading the lead list immediately thereafter (Rogers Aff. Tffi 18 & 24,
R. 360-364; Dep. of Steven Todd Knecht, 71:8-74:4, June 12, 2007, Ex. H to Mem. in
Opp'n to PL's Mot. for Partial Summ. J., R. 4295); that the lead list was destroyed (Miller
Dep. 67:23-68:20, Ex. A to Mem. in Opp'n to PL's Mot. for Partial Summ. J., R. 4295.); that Eagle Gate instructed its remaining employees that such conduct would not be tolerated, consistent with its ethical standards (Mem. to Eagle Gate Admissions Dept,
Ex. O to Mem. in Opp. to PL's Mot. for Partial Summ. J., R. 4295); that Eagle Gate did not hire any of Plaintiff s employees associated with Plaintiffs program for Polynesian students; and that Eagle Gate never started its own Polynesian program (Dep. of Jonathan
W. Bullen, 19:3-18, Mar. 4. 2005, Ex. L to Mem. in Opp'n to PL's Mot. for Partial
Summ. J., R. 4295). Nor is there any dispute that of the only two students identified by
Plaintiff as being improperly recruited by Eagle Gate, both approached Eagle Gate about attending there, not the other way around. (Aff. of Jeana Morris, Feb. 8, 2005, ffi[ 2-5,
10 Ex. F to Reply Mem. in Supp. of Mot. for Summ. J., R. 4317; Aff. of Brian George
Shelley ("Shelley Aff."), 1fl[ 3-7, Feb. 8, 2005, Ex. G to Reply Mem. in Supp. of Mot. for
Summ. J., R. 4317.)
B. Scheduling Orders and Plaintiffs Motion to Compel
On December 30, 2005, the trial court entered the first of four scheduling orders.
(Rule 26(f) Att'ys Planning Meeting Report and Scheduling Order, R. 1174-1182.) In
August 2006, and again in November 2006, the parties agreed to extend the discovery cutoff date in this matter and the court appropriately entered an Amended Scheduling
Order on August 29, 2006, and a Second Amended Scheduling Order on November 16,
2006. (Am. Scheduling Order, R. 1236-1245; Second Am. Scheduling Order, R. 1253-
1255.)
On March 7, 2007, Plaintiff alone filed a motion to extend the discovery cutoff
("First Motion to Extend") (PL's Mot. to Extend Disc. Period, R. 1307-1310), representing to the trial court that the only remaining discovery it needed to conduct was the deposition of Mr. Knecht6 and a review of Ms. Miller's Eagle Gate hard drive.
(Reply Mem. in Supp. of PL's Mot. to Extend Disc. Period 3-4, 1644-1645.) Absent from the First Motion to Extend, limited in scope as it was, is any allegation by Plaintiff that it needed any discovery beyond Ms. Millers' hard drive in order to complete its expert report on damages. {Id., R. 1642-1647.) Thereafter, on May 10, 2007, the trial court entered an order extending the discovery cutoff in this matter to June 18, 2007, and the
6 Ironically, Plaintiff had already deposed Mr. Knecht in another matter thereby belying Plaintiffs claim that it had been unable to locate Mr. Knecht. {See Supp. Mem. in Opp'n to PL's Mot. to Extend Disc, R. 1653.)
11 deadline for expert disclosures to June 28, 2007. (Order Granting PL's Mot. to Extend
Disc. Period, R. 2288-2290.)
On June 6, 2007, Plaintiff filed a Motion to Compel Defendant's Discovery
Responses, seeking an order compelling the Eagle Gate Parties to produce contact information for former employees of Plaintiff who had subsequently worked for either
Eagle Gate College or Provo College and "a copy of Eagle Gate College's database in its original format." (Mem. in Supp. of PL's Mot. to Compel Defs.' Disc. Resp., R. 2464-
2472.) The Motion to Compel was based, in relevant part, on Plaintiffs document requests seeking "[c]opies of each lead list prepared, accessed, modified, or otherwise used in carrying out his or her responsibilities to Eagle Gate College by Jana Miller, Todd
Knecht and Wallace Rogers" and "[d]ocuments sufficient to ascertain each and every change or alteration to any lead list owned, possessed, or otherwise controlled by Eagle
Gate College that were made by Jana Miller, Todd Knecht, and Wallace Rogers." (Id. at
4-5, R. 2467-2468.)
Eagle Gate and Provo College opposed the Motion to Compel, noting that the document requests Plaintiff relied, as set forth above, did not request the production of the entirety of Eagle Gate's database. (Eagle Gate and Provo College's Mem. in Opp'n to PL's Mot. to Compel Disc. 4-5, R. 2904-2905.) On July 26, 2007, the trial court
7 Although Plaintiff does not challenge the trial court's ruling on its Motion to Compel, it implies in its Statement of the Case that the fact its Motion to Compel was pending when Plaintiff filed its Second Motion to Extend, discussed below, the court- ordered deadlines, somehow impacted its ability to file a timely expert report. (Appellant Br. 9.) A brief description of the proceedings relative to Plaintiffs Motion to Compel is included to address that allegation.
12 entered a Minute Entry ruling that, because Plaintiff had not requested the database in discovery, the court could not compel its production. (Minute Entry 2, July 26, 2007,
Addendum Ex. G, R. 2995.) The trial court also noted, based on the pleadings submitted, that Eagle Gate College and Provo College had appropriately responded to the requests by compiling a list of 37,000 names of potential students and their contact information and providing a spreadsheet identifying changes made to the database by Jana Miller.
(Id.) Accordingly, there was no outstanding discovery to the Eagle Gate Parties.
On June 26, 2007, two days before the expert witness deadline, Plaintiff filed a
Motion to Extend the Dates Set Forth in the Order Granting Plaintiffs Motion to Extend
Discovery Period ("Second Motion to Extend"), seeking to extend all deadlines, including the deadline for fact discovery, which had already passed, and expert witness disclosure, for an additional sixty days. (PL's Mot. to Extend the Dates Set Forth in the
Order Granting PL's Mot. to Extend Disc. Period, R. 2915-2927.) Plaintiff alleged that it required the requested extension so that it could review Eagle Gate College's electronic
Q database in "native format" and to depose individuals who formerly worked for Plaintiff and subsequently worked for Eagle Gate or Provo College—which Plaintiff had not previously mentioned as a reason for extending discovery. (Id.) Plaintiffs Second
Motion to Extend, while not directly ruled on by the trial court, was essentially denied when the trial court granted the First Motion for Summary Judgment. In its 8 Significantly, due to the trial court's ruling on Plaintiffs Motion to Compel, Plaintiff ultimately did not need additional time to review Eagle Gate College's electronic database because the court refused to compel its production. (Minute Entry, July 26, 2007, Addendum Ex. G, R. 2994-3001.)
13 Memorandum Decision granting the First Motion for Summary Judgment, discussed herein, the trial court stated that although it had not issued a ruling on the Second Motion to Extend, Plaintiff "effectively had nearly six months (rather than the 60 days sought) to have its experts complete their expert reports on damages" (Mem. Decision 3, Jan.
30, 2008 (emphasis added), Addendum Ex. A, R. 3566.)
C. The First Motion for Summary Judgment
On October 9, 2007, the Eagle Gate Parties filed their First Motion for Summary
Judgment on all of Plaintiff s claims against them. (Def.'s Mot. for Summ. J. (re: Claims
Against Eagle Gate, Provo College and Jana Miller), R. 3136-3138.) In support of their
First Motion for Summary Judgment, the Eagle Gate Parties presented evidence that (a)
Plaintiff had failed to provide a basis for, and a computation of, its damages, (b) Plaintiff had failed to provide any expert reports substantiating its damages as it claimed was
necessary, and (c) the time for expert reports, expert discovery, and fact discovery had
long passed. (Mem. in Supp. of Mot. for Summ. J. (re: Claims Against Eagle Gate,
Provo College and Jana Miller), R. 3139-3156.)
The Eagle Gate Parties also presented evidence that Plaintiff had repeatedly
represented that it could only provide evidence of its purported damages or any
computation thereof through expert testimony. (Id., R. 3146-3149.) For example, on or
about January 17, 2007, Jana Miller served her First Set of Interrogatories on Plaintiff.
(See Decl. of Jennifer R. Eshelman, f 6, R. 3127.) Regarding each claim Plaintiff
asserted against her, Ms. Miller requested that Plaintiff identify "[a]ll damages that
[Plaintiff] claim[s] to have [or purportedly] suffered as a result of [the alleged acts of Ms.
14 Miller], including a detailed statement of the method of the calculation of any such damages and any facts [Plaintiff] relied upon in computing any alleged damages." {See
Resp. to Miller Interrogs., Nos. 1, 2, 4, 5, and 6, Addendum. Ex. E, R. 3269-3276.)
Plaintiff responded to this portion of each such request stating that "Plaintiffs experts will provide information and analysis concerning the damages suffered"" {See id.
(emphasis added).) Notably absent from Plaintiffs responses regarding damages was any reference to the alleged fact witnesses and their deposition testimony that it now relies on to substantiate its damages.
In addition, on or about January 17, 2007, Eagle Gate and Provo College served interrogatories on Plaintiff requesting that Plaintiff identify "[a]ll damages that [Plaintiff] purportedly suffered as a result of [the various alleged acts of Eagle Gate or Provo
College], including a detailed statement of the method of the calculation of any alleged damages and any facts [Plaintiff] relied upon in computing any alleged damages." {See
Resp. to Eagle Gate Interrogs., Nos. 1, 2, 7, 8, 9, 10, and 12, Addendum Ex. F, R. 3281-
3296.) Plaintiff again responded to this portion of the interrogatory by stating that
"Plaintiffs experts will provide information and analysis concerning the damages suffered"' {See id. (emphasis added).) As before, Plaintiff notably failed to reference the alleged fact witnesses and their deposition testimony that it now relies upon.
Consistent with its prior position, Plaintiff opposed the First Motion for Summary
Judgment by asserting (i) that it had identified its damages, (ii) that it needed an expert
witness to provide a calculation of its purported minimum of $10,250,000 damages set forth in its Complaint filed in October 2004, and (iii) that it had been unable to provide
15 an expert report during the preceding three years because the Eagle Gate Parties had failed to produce documents necessary to the calculation. (Mem. in Opp'n to Defs.' Mot. for Summ. J., R. 3311-3340.) Plaintiff relied upon the same deposition testimony that it relies on in making this appeal as proof of its damages. {Id. at R. 3336.)
The trial court heard oral argument on the Eagle Gate Parties' Motion for
Summary Judgment on January 22, 2008. (Mot. Hr'g Tr., Jan. 22, 2008, Addendum Ex.
H, R. 3574.) During that hearing, Plaintiffs counsel admitted that Plaintiff had not determined the cause of its alleged $10,250,000 damages. {Id. at 32:14-33:14.)
Specifically, Plaintiffs counsel claimed Plaintiff needed additional information before it could do a comparison of the parties' lead lists "to make that causation determination."
(Mat 33:10-14.)
Having considered all of the parties' submissions, the trial court issued a
Memorandum Decision on January 30, 2008, ruling that Plaintiff had "failed entirely to substantiate its damages claim," and granting summary judgment against Plaintiff on its claims against the Eagle Gate Parties. (Mem. Decision 4, Jan. 30, 2008, Addendum Ex.
A, R. 3567.) The trial court noted in its Memorandum Decision that the "parties agree that expert testimony is needed in order to establish damages in this case" that during the four years of litigation Plaintiff had ample time in which to provide a damages report, and that the deadline for doing so had passed. {Id. at 2, R. 3565.) The trial court further noted that "the information which would substantiate such damages is, at least in part,
16 in the Plaintiffs own possession"? that it was not persuaded by Plaintiffs suggestion at the hearing that it could not calculate damages until causation could be assessed] and, further, that Plaintiff had "apparently made a tactical decision" not to provide an expert report. {Id. at 2-4 (emphasis added), R. 3565-67.)
D. Plaintiffs Motion for Relief From or For Reconsideration of the Court's Order Granting Summary Judgment
On March 25, 2008, Plaintiff filed a Motion for Relief From or for
Reconsideration of the Court's Order Granting Summary Judgment ("Motion for
Reconsideration"). (R. 3686-3689.) Plaintiff asserted in support of that motion that it had substantiated its damages through the testimony of its representatives, and also submitted the untimely Expert Report of Brad Townsend. (PL's Mem. in Supp. of Mot. for Relief from or Recons. of the Court's Order on Summ. J., R. 3693-3721.) Plaintiff also contended that it was entitled to proceed to trial on its claims for injunctive relief.
(id.)
The trial court denied Plaintiffs motion as it pertained to Plaintiffs claims for damages, stating that Plaintiff was simply rearguing its earlier opposition. (Minute Entry
9 The trial court's conclusion on this point is substantiated by Plaintiffs Opening Brief in which Plaintiff states that it suffered many different types of damages including: "(i) the lost productivity of the experienced employees . . .; (ii) the costs of hiring and training less experienced and less productive employees; (iii) the costs associated with ineffective advertising and marketing . . . ;(iv) the effects of reduced morale on various campuses; and (v) the lost tuition payments from students who would have otherwise attended Stevens-Henager." (Appellant Br. 11.) Information necessary to establish these categories of damages is partially, if not entirely, within Plaintiffs control—not the Eagle Gate Parties'. The Eagle Gate Parties have no information pertaining to, or documents evidencing, the lost productivity of Plaintiff s employees, the costs of hiring and training replacement employees, the costs of advertising and marketing, the effects of loss of morale, or the loss in tuition dollars.
17 1-2, May 12, 2008, Addendum Ex. I, R. 3987-88.) Regarding the untimely expert report, the trial court noted that Plaintiff could have submitted a timely expert report had it chosen to do so, as evidenced by its ability to provide a report after the court entered summary judgment without further discovery. (Id.) The trial court, however, granted
Plaintiffs motion as it pertained to Plaintiffs equitable claims. (Id.)
E. The Eagle Gate Parties' Motion to Strike the Preliminary Expert Report of Brad Townsend
In response to Plaintiffs belated filing of the Preliminary Expert Report of Brad
Townsend, the Eagle Gate Parties filed a Motion to Strike both the Expert Report and the
Affidavit of Mr. Townsend that Plaintiff filed in support of its Motion for
Reconsideration. (R. 3909-3909B.) The Eagle Gate Parties called attention to the patent fact that the Expert Report, dated March 21, 2008, was filed approximately nine months after the deadline for expert reports. (Mem. in Supp. of Mot. to Strike Prelim. Expert
Report of Brad Townsend & the Aff. of Brad Townsend, R. 3910-3917.) In opposition,
Plaintiff curiously asserted that the Expert Report was properly filed because Plaintiff had a motion to extend discovery pending before the court, and because the Expert Report established Plaintiffs damages, and therefore constituted "new evidence." (PL's Mem. in
Opp'n to Defs.' Mot. to Strike Prelim. Expert Report of Brad Townsend & the Aff. of
Brad Townsend , R. 3950-3956.)
In their Reply, the Eagle Gate Parties explained that the Export Report was undeniably untimely, that there was no need for the trial court to rule on Plaintiffs
Motion to Extend once it had entered summary judgment, and that the Expert Report did
18 not constitute new evidence. (Reply Mem. in Supp. of Mot. to Strike Prelim. Expert
Report of Brad Townsend & Aff. of Brad Townsend, R. 3957-3965.) On May 30, 2008, the trial court granted the Motion to Strike based on the court's recent ruling on
Plaintiffs Motion for Reconsideration and the grounds articulated by the Eagle Gate
Parties in their Motion. (Minute Entry, May 30, 2008, Addendum. Ex. D, R. 3994-3996).
Thereafter, on June 2, 2008, Plaintiff filed a Petition for Interlocutory Appeal, which was denied on June 30, 2008. (Order (den. pet.), R. 4018-4019.) Almost seven months later on January 13, 2009, the trial court issued a Notice of Order to Show Cause.
(R. 4020-4022.) The matter was subsequently set for trial solely on Plaintiffs equitable claims and the trial court invited additional motion practice prior to trial.
F. The Eagle Gate Parties' Second Motion for Summary Judgment
The Eagle Gate Parties thereafter filed their Second Motion for Summary
Judgment to dismiss Plaintiffs equitable claims. (R. 4079-4082.) The trial court partially granted the Second Motion for Summary Judgment dismissing Plaintiffs claims under the CFAA and the Unfair Competition Act. (Mem. Decision 3, Aug. 31, 2009,
Addendum Ex. C, R. 4366.) Significantly, on Plaintiffs CFAA claim the trial court ruled that in light of its prior ruling, Plaintiff could not substantiate damages aggregating of at least $5,000 and, therefore, could not meet the statutory threshold for bringing a civil action under the CFAA. (Id.) Also significantly, the trial court gave due consideration to the testimony of Plaintiff s representative, Ms. Dewsnup, on this point. (Id.)
19 G. The Eagle Gate Parties' Motion in Limine
The Eagle Gate Parties also filed a Motion in Limine (R. 4051-4053) to preclude
Plaintiff from presenting any evidence of damages at trial on the grounds that (1) to find otherwise would be contrary to the law of the case; (2) monetary damages are not relevant to the issues to be decided at trial; i.e., the request for injunctive relief; and (3) introduction of evidence of Plaintiffs alleged monetary damages would be more prejudicial than probative. (Eagle Gate College, Provo College and Jana Miller's Mem. in Supp. of Mot. in
Limine to Exclude Evidence of Monetary Damages, R. 4054-4078.) Plaintiff opposed the
Motion in Limine, contending that it was entitled to present evidence of its losses up to
$5,000 in order to meet the requirements of the CFAA. (Mem. in Opp'n to Defs.' Mots, in
Limine, R. 4293.) On August 31, 2009, the trial court granted the Motion in Limine, ruling that the issue of damages is irrelevant to the remaining claims. (Mem. Decision 6, Aug. 31,
2009, Addendum Ex. C, R. 4369.)
SUMMARY OF ARGUMENT
The trial court correctly ruled that Plaintiff failed to substantiate its damages, a necessary element for each of its claims. Plaintiff itself repeatedly set the bar for providing evidence of its damages—expert testimony. Having set that bar, however,
Plaintiff then made the tactical decision to not file an expert report prior to the Court- ordered deadline or even in opposition to the First Motion for Summary Judgment.
Plaintiff made this decision despite the fact that it was undeniably able to prepare an expert report based on information within its control.
20 In addition, the Court may reject Plaintiffs contention that it presented evidence
that the actions of the Eagle Gate Parties were the proximate cause of Plaintiffs
damages, or, in other words, of the fact of damage. Rather, the evidence, vague
deposition testimony from Plaintiffs representatives, is nothing more than bald
speculation. Even when given the best spin possible in Plaintiffs brief, the evidence
presented by Plaintiff is not such that a jury could make a reasonably approximation of
damages. Furthermore, Plaintiff admitted at the hearing on the First Motion for
Summary Judgment that it had not yet determined causation.
The Court may also reject Plaintiffs superficial argument that this Court should
also vacate three later rulings as based "in part"10 on the trial court's grant of summary judgment. With no application of law to fact beyond stating the obvious—that these
rulings were subsequent to the earlier ruling on summary judgment—Plaintiff insists that
the following rulings should be vacated: (1) the order striking Plaintiffs extremely tardy
expert report; (2) the order precluding Plaintiff from presenting evidence of damages at
trial; and (3) the granting of summary judgment for the Eagle Gate Parties on Plaintiffs
equitable claim under the CFAA. These rulings, however, are not dependent on the
earlier ruling.
The trial court ordered Plaintiffs expert report to be stricken because it was filed
268 days after the deadline established by the operative scheduling order. Presumably
10 By stating that the subsequent rulings were based uin part" on the earlier ruling on summary judgment, Plaintiff admits that the rulings were at the very least based "in part" on something entirely separate from the court's earlier ruling. This admission alone defeats Plaintiffs position.
21 based at least in part on the ruling striking Plaintiffs expert report, the trial court then granted the Eagle Gate Parties' Motion in Limine precluding Plaintiff from presenting evidence of damages at trial. Finally, the trial court's holding that Plaintiff failed to present evidence of at least $5,000 in damages, thereby precluding its CFAA claim, is not dependent on the court's earlier decision on summary judgment. Although both decisions stem from Plaintiffs failure to present evidence of damages, that does not require the vacation of this decision. Even if the Court were to reverse the earlier ruling,
Plaintiff has not presented any evidence showing $5,000 worth of damages and now cannot due to the trial court's striking of its expert report.
ARGUMENT
I. The Trial Court Properly Granted the First Motion for Summary Judgment.
Throughout this case, in hearings, papers and every response to written discovery,
Plaintiff has repeatedly and adamantly represented that expert testimony was required to establish its purported minimum of $10,250,000 in damages in this matter. Further,
Plaintiff never identified the individuals it now relies on as witnesses who would establish Plaintiffs damages. Plaintiffs counsel repeated the expert testimony mantra at the hearing before Judge Faust on the Eagle Gate Parties' First Motion for Summary
Judgment, stating "this is the type of case, Judge, where damages are going to be difficult to determine. And this is exactly the kind of case contemplated by Rule 702 of the Utah Rule of Evidence, where an expert is necessary." (Mot. Hr'g Tr. 12:22-25,
Jan. 22, 2008 (emphasis added), Addendum Ex. H, R. 3574.) Despite this admitted burden of proof, Plaintiff failed to file an expert report in accordance with the deadline
22 established by the trial court's scheduling order. Even more remarkable, two months after the trial court enter summary judgment against Plaintiff for failing to present evidence of damages, Plaintiff was able to file an expert report without any additional information. (Minute Entry 1-2, May 12, 2008, Addendum Ex. I, R. 3987-3988.)
Plaintiff was clearly capable of providing an expert report as it had claimed was necessary to establish its damages, but apparently intentionally chose not to do so.
Summary judgment was properly granted on that basis alone.
In addition, even if an expert report were not necessary to establish damages, as
Plaintiff now asserts in stark contrast to its repeated responses to written discovery requests, it also failed to establish the fact of damages, i.e., causation. Accordingly, the trial court properly entered summary judgment on Plaintiffs damages claims.
A. Plaintiff Failed to Substantiate Its Damages Through Timely Expert Testimony.
Despite its oft-repeated mantra that "Plaintiffs experts will provide information and analysis concerning the damages suffered," Plaintiff failed to submit a timely expert report on damages. The trial court, finding that the time for doing so had passed, properly granted the Eagle Gate Parties' First Motion for Summary Judgment. (Mem.
Decision 4, Jan. 30, 2008, Addendum Ex. A, R. 3567.) Plaintiffs failure to submit a timely expert report was not due to lack of documents or other information, nor was it due to the lack of a ruling on Plaintiffs motion to extend discovery deadlines a fourth time.11 Rather, as the trial court recognized, Plaintiff made a "tactical decision" not to
11 Indeed, as discussed in the Course of Proceedings & Statement of Facts, the
23 file its expert report despite having sufficient information with which to compile an expert report. (Id.) This conclusion was based on comments made by Plaintiffs counsel at the hearing on the Motion for Summary Judgment that even though Plaintiff had the information it needed to file an expert report, even if preliminarily, "rather than piecemeal [the expert report], we wanted to give a complete and accurate damage calculation so it wouldn't be used against us at a later date." (Mot. Hr'g Tr. 35:15-17,
Addendum Ex. H, R. 3574) Plaintiff knew its expert report was due; it simply intentionally chose not to provide it for tactical reasons, or even to identify its expert. As stated by Judge Faust, "[i]t was simple inaction and lack of diligence on the part of the
Plaintiff that led to the Court's ultimate decision to grant summary judgment." (Minute
Entry 2, May 12, 2008, Addendum Ex. I, R. 3988.) A court's role is not to relieve a party of the consequences of its lack of diligence or ill-advised tactical decisions. See Schmitz v. Yukon-Koyukuk School Dist, 147 P.3d 720, 727 (Alaska 2006) (affirming denial of motion for reconsideration where trial court found "new evidence" to be untimely because it could have been submitted in opposition to motion for summary judgment but was withheld for "tactical reasons").
A similar decision was recently upheld by this Court in Posner v. Equity Title Ins.
Agency, Inc., 2009 UT App 347, f 23, 222 P.3d 775. In Posner, a seller of real property
Eagle Gate Parties did not owe Plaintiff any discovery when their First Motion for Summary Judgment was filed. Further, as evidenced by Plaintiffs first solo motion to extend discovery deadlines, it only needed to review Ms. Miller's hard drive and depose Todd Knecht.
24 sued his real estate broker for breach of fiduciary duty. 2009 UT App 347, ^| 4. The broker moved for and was granted summary judgment on the grounds that expert testimony was required to prove it had breached a fiduciary duty to the plaintiff and the testimony of the expert and his report had been excluded. Id. at ^[ 7. On appeal, the plaintiff asserted (i) that the court had erred in finding expert testimony was necessary to prove his claim, and (ii) that the exclusion of his expert was an "egregious sanction" warranting reversal. Id. at fflf20 , 23.
This Court agreed that the plaintiff needed expert testimony to prove his breach of fiduciary duty claim and, further, found no error by the trial court in excluding the plaintiffs sole expert. Id. at f 25. In reaching that decision, the Court noted that the record showed the plaintiff had failed to designate his expert during the nearly three and one-half years the case had been pending, and did not designate his expert until two weeks after the deadline when the defendant moved for summary judgment. Id. Thus, this Court concluded in Posner that the trial court had acted within its discretion in finding Posner had failed to show good cause and in excluding the expert report. Id.
Although Plaintiff now tries to disavow its prior representations otherwise,
Plaintiff repeatedly represented that it needed expert testimony to prove its claims. (Mem. in Opp'n to Def.'s Mot. for Summ. J. 27-28, R. 3337-3338.) Specifically, in opposition to the Eagle Gate Parties' Motion for Summary Judgment, Plaintiff stated that:
Plaintiffs claims require among other things, a determination of the value of Plaintiffs Lead List, which is a trade secret; the diminution in value
The plaintiff in Posner also sued his escrow agent and brought additional claims that are not relevant here.
25 caused by Defendants' illegal and unauthorized access of that trade secret; an analysis of the impact of Defendants' breach of employment contracts on [Plaintiffs] enrollment rates and the value of Plaintiff; and an analysis of the increased costs and decreased productivity caused by Defendants' poaching of Plaintiff s employees. A calculation of these types of damages requires "scientific, technical, or other specialized knowledge."
(Id at28,R.3338).13
Although Plaintiff now attempts to couch its need for an expert as merely to provide a "calculation" of its damages, it is clear from the above statement that what
Plaintiff needed from an expert was much more than a mathematical analysis. Indeed, rather than provide evidence of its purported damages, Plaintiff repeatedly represented that it needed an expert to substantiate its damages; i.e., to testify as to effect of the
alleged acts of the Eagle Gate Parties. As in Posner, expert testimony was necessary for
Plaintiff to prove its claims and Plaintiff is estopped from now claiming otherwise.14
Plaintiff failed to provide expert testimony to substantiate its damages and the trial court properly granted summary judgment against it.
B. Plaintiff Failed to Present Evidence of the Fact of Damages Through Non-Expert Testimony.
Plaintiff relies on several cases for the rather unremarkable proposition that once a
finding of proximate cause of damages has been made, the plaintiff need not "precisely
identify the extent of Plaintiff s damages." (Appellant Br. 15 (citing Sohm v. Dixie Eye
Notably, this portion of Plaintiffs argument highlights that it did not present evidence of the "fact of damages" at the time it opposed the Eagle Gate Parties' motion. Indeed, Plaintiff admits here that it had not performed any analysis of the effects, if any, of the Eagle Gate Parties' alleged actions. The fact that Plaintiff did not present evidence establishing the fact of damages is discussed in further detail in section B below. 14 The exclusion of Plaintiffs expert report is also supported by the decision in Posner as discussed in section II below.
26 Ctr., 2007 UT App 235, % 17, 166 P.3d 614).) However, as discussed below, none of the testimony Plaintiff cites demonstrates the fact of damages or, in other words, that the actions of the Eagle Gate Parties were the proximate cause of any alleged injury, much less the purported minimum of $10,250,000 it claims it suffered. Plaintiff admitted as much in the hearing for the First Motion for Summary Judgment when its counsel claimed an inability to provide a timely expert report because Plaintiff had been unable to
"make that causation determination" (Mot. Hr'g Tr. 32:3-33:14, Addendum Ex. H, R.
3574.) The vast difference between the evidence presented in the cases Plaintiff cites and the evidence it presented at the trial court is evidenced by a careful review of the cases first and then the testimony Plaintiff relies on below.
Plaintiff first cites to this Court's decision in Sohm, (Appellant Br. 15.) In Sohm, the trial court granted summary judgment to the defendants in a medical malpractice action, finding that the plaintiffs expert had failed to "identify or establish what damage was caused by [defendants' alleged negligence." 2007 UT App 235, Tf 11, 166 P.3d 614.
This Court noted, however, that the trial court also found sufficient testimony by the
expert to establish proximate cause. Id. This Court in Sohm held that "a finding of proximate cause necessarily includes a finding of identifiable injury." Id. at ^f 17. Thus, the issue in Sohm, unlike here, was whether "in light of [the finding of proximate cause], the trial court was entitled to rule, as a matter of law, that Plaintiff failed to present
evidence sufficient to defeat a motion for summary judgment because her expert did not precisely identify the extent of Plaintiff s damages." Id, This Court decided that issue in the negative and held that evidence presented by the expert that the defendants' conduct
27 "was responsible for the damage to Plaintiffs eyes and the significant loss of vision she sustained in her right eye" was sufficient evidence of the fact of damages to avoid summary judgment. Id. atffif 19-20.
Unlike the facts in Sohrn, Plaintiff has not shown, nor did Judge Faust find, that the Eagle Gate Parties' actions had proximately caused Plaintiffs purported damages.
Indeed, Plaintiff admittedly had not made a "causation determination." (Mot. Hr'g Tr.,
32:3-33:14, Addendum Ex. H, R. 3574.) Thus, this Court's analysis in Sohm is inapposite because Plaintiff has not presented evidence establishing that the alleged acts of the Eagle Gate Parties were the proximate cause of any purported "damages."
Plaintiff next cites to Renegade Oil, Inc. v. Progressive Cas. Ins. Co., as providing confirmation that demonstrating the fact of damages, without quantification of damages, is sufficient to avoid summary judgment. (Appellant Br. 15-16 (citing Renegade Oil,
2004 UT App 356, ^ 13, 101 P.3d 383).) In Renegade Oil, the plaintiff sued its insurance agent for negligence for failing to notify the insurer of the plaintiffs newly acquired vehicle, which failure resulted in a denial of coverage when the new vehicle was involved in an accident. Renegade Oil, 2004 UT App 356, %3. As a result, the plaintiff had to defend against a personal injury lawsuit itself. Id. at 1fl[ 3-4. The defendant moved for a directed verdict on the grounds that the plaintiff "failed to present any direct evidence of damages at trial," although the plaintiff had presented evidence of the underlying personal injury lawsuit. Id. at ^| 11. The trial court denied defendant's motion, noting that evidence of the underlying personal injury lawsuit provided "more than sufficient evidence of either real or anticipated damage to be suffered ...." Id.
2g This Court agreed with the trial court, explaining that "there exists a 'reasonable probability that [plaintiff] suffered damage as a result of [its agent's] breach' and that the amount of damages would equal the costs related to the [underlying] lawsuit that otherwise would have been covered by the Policy." Id. at ^f 13 (quoting Atkin Wright &
Miles v. Mountain States Tel & Tel Co., 709 P.2d 330, 336 (Utah 1985)). Thus, in
Renegade Oil, the plaintiff had established not only the fact of damages, i.e., proximate cause, but it was also clear how the amount of damages would be calculated, even though the exact amount of damages from the ongoing litigation had not been presented. Id. at ^|
13.
The Supreme Court's decision in Renegade Oil, therefore, supports the unremarkable proposition that "c[t]he amount of damages may be based upon approximations, if the fact of damage is established, and the approximations are based upon reasonable assumptions or projections?" Id. at ^f 12 {quoting Atkin Wright &
Miles, 709 P.2d at 336 (emphasis added)). Unlike the plaintiff in Renegade Oil, Plaintiff wholly failed to establish the fact of damages or to present any evidence from which reasonable assumptions or projections could be made. Indeed, its Interrogatory Answers confirmed that in the absence of an expert report, it had no evidence of damages period.
Thus, the holding of Renegade Oil is not akin to Plaintiffs situation here.
Plaintiff finally points to Anderson Development Co. v. Tobias as further confirming that summary judgment is inappropriate where a plaintiff provides evidence of the fact of damages, but not the amount of damages. (Appellant Br. 16 (citing
Anderson Dev. Co. v. Tobias, 2005 UT 36, 116 P.3d 323).) In Anderson Development, a
29 third party testified that he raised the purchase price for the real property he sold to the plaintiff due to the alleged misrepresentations of the defendants. 2005 UT 36, f 33. The
Supreme Court in Anderson Development ruled that this third-party testimony created a reasonable inference that the defendants' alleged misrepresentations had caused the plaintiff to pay more for the real property and that this evidence, although "thin," was
sufficient to withstand summary judgment on the element of damages. Id. Notably, as
evidenced by the below discussed deposition testimony, Plaintiff supplied no such
equivalent third party testimony. For example, Plaintiff offered no testimony from a
potential student who did not attend Plaintiffs school due to the Eagle Gate Parties5
purported actions. Rather, Plaintiff chose to rely upon the inadmissible speculation of its
captured employees. The absence of even "thin" evidence here makes the analysis of
Anderson Development inapplicable to Plaintiffs situation.
Turning now to the deposition testimony Plaintiff relied on, it is evident not only
how different in nature it is from the evidence in the cases discussed above, but also that
Judge Faust was correct when he found that Appellant "failed entirely to substantiate its
damages claim." (Mem. Decision 4, Jan. 30, 2008, Addendum Ex. A, R. 3567.)
Carol Gastiger's Testimony
The first thing the Court should note with regard to Plaintiffs rendition of Carol
Gastiger's testimony is how demonstrably inaccurate it is with regard to Ms. Gastiger's
"calculation" of "damages." (Appellant Br. 17-18.) Plaintiff states in its Statement of
Facts that Ms. Gastiger testified in her deposition that there was "reduced productivity
from the loss of Stevens-Henager's 'Admission Consultant,' where the lost consultant
30 had averaged 8 student recruits per month but her replacement at Stevens-Henager averaged only 5 students per month, which resulted in lost tuition dollars. (R. 3332-33)."
(Appellant Br. 7.)15 From this, the Court would understandably have the impression that
Plaintiff actually hired a replacement admissions consultant who averaged less recruits per month than the lost employee. That impression, however, would not be supported by the actual record. The portion of the record Plaintiff cites reveals that Ms. Gastiger was simply speculating in a hypothetical, not testifying about actual facts within her knowledge:
Q. I want you to tell me what facts you're aware of that would support an allegation Eagle Gate College or Provo College caused damage to Stevens-Henager. A. . . . / believe that when you lose a very competent Admissions Consultant you lose production for a period of time. That results in— let's say that I replace Tecia and the other person starts five people a month. Tecia is averaging eight. That's a total of nine people in a given three-month period of time, if this other person ever gets as good as Tecia. You multiply that time[s] tuition. That's money—real money, in my opinion, that's been lost. Those are real dollars, I think.
(Mem. in Opp'n to Def.'s Mot. for Summ. J. 22-23 (emphasis added), Addendum Ex. J,
R. 3332.) Ms. Gastiger did not testify that she replaced Tecia with anyone or that the replacement actually did start five people a month, or ten or twenty. Instead, Ms.
Gastiger speculated about how she thought Plaintiff could—but ironically did not—
15 Plaintiff makes a similar statement in its Argument section: "Ms. Gastiger testified that when you take the number of fewer students recruited by the replacement employee—3 per month—and 'multiply that times tuition,' then that is 'real money, in my opinion' that's been lost. (R. 3332-33.)" (Appellant Br. 17.)
31 prove damages}6 No matter how Plaintiff spins it, Ms. Gastiger's hypothetical damage
"calculations" are not evidence of damages.
Equally problematic for Appellant is Ms. Gastiger's testimony concerning the
"loss of the Tongan population" and the money spent recruiting "that population." (Id. at
22.) Also in response to the above quoted question concerning facts that support a claim of damages Ms. Gastiger responded: "I think the loss of the Tongan population. I think the money we extended on it. I mean in very real dollars. And in very non-real dollars,
in time and in effort. That are not in specific dollars." (Id.) Even if Ms. Dewsnup's unsubstantiated opinions, conjecture and speculation surrounding the "loss of the Tongan population" could create an issue of material fact concerning damages, which they
cannot,17 there is absolutely no evidence that the alleged "loss of the Tongan population" was an injury proximately caused by the Eagle Gate Parties that caused damages to
Plaintiff. In fact, Plaintiffs brief demonstrates the opposite.
Plaintiffs brief makes clear that even it does not contend that Eagle Gate
proximately caused the "loss of the Tongan population." Rather, Plaintiff contends that
Eagle Gate simply "attempted" to steal its program and tried to hire its recruiters.
Plaintiff states:
In addition, Eagle Gate also attempted to steal Stevens-Henager's Polynesian Program by trying to hire Mosese Iongi and Trevor Smith, who
16 Ms. Gastiger's testimony further highlights that Plaintiff knew how to compute and provide evidence of its purported damages, but despite that knowledge, chose for tactical reasons not to do so. 17 See Brown v. Jorgensen, 136 P.3d 1252, 1258 (Utah Ct. App. 2006) (affidavits in opposition to motion for summary judgment may not be considered if "largely based on unsubstantiated opinions, conjecture, and beliefs").
32 recruited Tongan students for Stevens-Henager. After Stevens-Henager had spent more than $200,000 on recruiting efforts in the Tongan community, Eagle Gate attempted to recruit these employees to enroll the very students they previously had been recruiting for Stevens-Henager.
(Appellant Br. 5 (emphasis added) (citing R. 7-8).) There is, however, no cause of action for attempted interference and, accordingly, allegations of such attempted interference do not prove the fact of damages. Moreover, it is undisputed that (1) Eagle Gate never offered Messrs. Iongi and Smith a position with Eagle Gate, and (2) that Eagle Gate never started a "Polynesian program" or recruited the "Tongan population." (Dep. of
Jonathan W. Bullen, 19:3-18, Mar. 4, 2005, Ex. L to Mem. in Opp'n to PL's Mot. for
Partial Summ. J., R. 4295.) Thus, Eagle Gate did not even "attempt" to hire Messrs.
Iongi and Smith or to recruit students from the Tongan community. Plaintiff, therefore, failed to substantiate its damages on this basis as well.
Vicki Dewsnup's Testimony
Ms. Dewsnup's testimony also fails to create an issue of material fact surrounding damages. In total, Plaintiff presented the following deposition testimony of Ms.
Dewsnup as evidence of damages:
• "There's extensive costs incurred in advertising and marketing. We
continue to use any leads that come into the college from time to time, and
with the loss of adequate phone numbers due to admissions by Mr. Rogers,
it became difficult, if not impossible, to use our own leads."
• "There was economic damage, certainly, and also damage to morale at the
campuses effected."
33 • "There was loss of employees."
(Mem. in Opp'n to Def.'s Mot. for Summ. J. 23-24, Addendum Ex. J, R. 3333-
3334.) Ms. Dewsnup's statements of her opinions could hardly be more speculative.
Moreover, Ms. Dewsnup's bald reference to "extensive costs incurred in advertising and marketing" only highlights the lack of evidence of damages. Crucially, there is no evidence in the record that Plaintiff actually spent money on advertising. Even if there were, there is also no evidence in the record of how much of this hypothetical advertising money was directed at students who were allegedly recruited away by Eagle Gate
College—a necessary number to establish damages. Not only is there absolutely no evidence in the record below as to any "costs incurred in advertising and marketing," but
Plaintiff attempts to now interpret Ms. Dewsnup's opinion to be that the advertising and marketing were rendered "ineffective" when Eagle Gate allegedly misappropriated the student leads purportedly generated by the advertising and marketing. (Appellant Br. 7.)
This interpretation stretches Ms. Dewsnup's vague testimony to its limits. Furthermore,
Plaintiff presented no proof that its advertising was rendered ineffective. Plaintiff would have to have presented evidence that it lost students to Eagle Gate, which it did not do.
In addition, under Utah law, Plaintiff is not entitled to compensation for costs of advertising allegedly rendered ineffective on a claim for interference with contractual and economic relations in any event. Rather, Plaintiff is entitled to "(a) the pecuniary loss of the benefits of the contract or the prospective relation; (b) consequential losses for which the interference is a legal cause; and (c) emotional distress or actual harm to reputation if they are reasonably to be expected to result from the interference." See Truegreen Co.,
34 L.L.C. v. Mower Bros.} Inc., 2008 UT 81, ^ 22, 199 P.3d 929 (citing Restatement
(Second) of Torts § 774(A) (1979)) (holding that the correct measure of damages for interference with contractual and economic relations is lost profits). Because the advertising and marketing in question were sunk costs, i.e., monies already spent prior to any alleged tortious conduct by the Eagle Gate Parties, the Eagle Gate Parties' alleged acts were not and could not have been the proximate cause or the legal cause of that so- called "tremendous," but unquantifiable damage. Furthermore, Plaintiff presented no proof that its advertising was rendered ineffective. Plaintiff would have to have presented evidence that it lost students to Eagle Gate, which it did not do.
Next, Ms. Dewsnup's testimony concerning Plaintiffs inability to use its leads and its alleged "economic damage" as a result of the Eagle Gate Parties' actions is rank speculation. Moreover, to establish damages for lost profits stemming from the alleged losses associated with its lead list, Plaintiff must present sufficient evidence to enable the fact finder to "make a reasonable approximation." See Kilpatrick v. Wiley, Rein &
Fielding, 2001 UT 107, ^ 76, 37 P.3d 1130 (citation omitted). Or, in other words, "fljost profits must be established with reasonable certainty." Id. (citation omitted) (emphasis added). Ms. Dewsnup's bald statements as to "economic damage" provide no evidence from which a fact finder could make any approximation of damages, let alone a reasonable approximation, and do not create an issue of material fact.
Likewise, the mere fact that Eagle Gate hired Plaintiffs former employees does not establish the fact of damages. Plaintiff presented no evidence below that the employees in question were even replaced, the cost of that replacement, or whether the
35 replacements performed at a lower or higher level. Indeed, Ms. Gastiger's hypothetical replacement employee discussed above could have just as easily gone the other way and brought in twice as many starts as the employee who left. The fact is that there is no
evidence from which a fact finder could determine that the hiring of Plaintiffs former
employees was the proximate cause of any damages whatsoever.
Carl Barney's Testimony
Finally, as with Ms. Gastiger, Mr. Barney's unsubstantiated opinions, conjecture
and speculation that Plaintiff suffered damages due to the acts of the Eagle Gate Parties,
do not suffice to create an issue of material fact concerning damages. See Brown v.
Jorgensen, 136 P.3d 1252, 1258 (Utah Ct. App. 2006) (affidavits in opposition to motion
for summary judgment may not be considered if "largely based on unsubstantiated
opinions, conjecture, and beliefs"). Indeed, all of Mr. Barney's testimony on which
Plaintiff relies is admittedly just his opinion:
Q: Do you have an opinion as to what the damages are suffered by Stevens- Henager as a result of the alleged conduct of the defendants in this case?
A: Many million of dollars.
Q. When did you form that opinion?
A. At the time that all of this was revealed, the bad acts of Eagle Gate and Provo College were revealed to me, and connecting with the loss of the starts, that's when I formed that opinion. R. Many millions of dollars? A. Correct. Q. Are we talking more than $10 million? A. It could be. Q. In forming that opinion, what factors or facts did you consider? A. The damage to at least two of the campuses, Provo and Ogden. Q. In damage, you mean the decline in the number of starts?
36 A. The decline of starts. The decline of morale. The struggle. The losses. The economic losses. The effort. The cost of rebuilding. Q. What were the economic losses? A. The loss of starts, which then would result into an income stream over three or four years. The cost of hiring and training new people. The efforts to rebuild the admissions department. Where we would be today had this not—this impact not
occurred.
(Mem. in Opp'n to Def.'s Mot. for Summ. J. 24-25 (emphasis added), Addendum Ex. J,
R. 3334-3335.) As discussed above, to establish damages for lost profits associated with the decline in starts, Appellant must do more than simply speculate that its damages
"could be" more than $10 million. Mr. Barney's speculation as to what his company's damages possibly could be does not present a fact finder with sufficient evidence to enable the fact finder to "make a reasonable approximation" or, more importantly, create an issue of fact precluding summary judgment. Kilpatrick, 2001 UT 107, ^f 76.
Moreover, nothing in Mr. Barney's testimony provides evidence that ties Plaintiffs alleged damages to the actions of the Eagle Gate Parties. Thus, Mr. Barney's testimony does not establish the Eagle Gate Parties' alleged actions were the proximate cause of any damages to Plaintiff, period, let alone damages that possibly "could" exceed $10 million.
Contrary to Appellant's contention, this testimony is not remotely akin to the situation where an expert testifies that a doctor's negligence caused damage to a patient's eyes as in Sohm, or a plaintiff shows it is being sued and forced to defend it at its own cost due to a denial of insurance coverage as in Renegade, or even where a third party has testified that she took a different action due to the actions of the defendants as in
Anderson Development. Rather, this deposition testimony is a prime example of rank
37 speculation and opinion with hypothetical thrown in for good measure, from which a fact finder could not possibly find the fact of damage.
In addition, as with Ms. Dewsnup's testimony, Mr. Barney's testimony provides nothing from which a fact finder could make a reasonable approximation of damages.
Mr. Barney's self-serving and wholly speculative testimony that Plaintiffs damages are
"many millions of dollars" and that its damages "could be" more than $10 million, is patently insufficient. As Ms. Gastiger's hypothetical also falls short of the mark, Plaintiff presented no evidence below that would allow a jury to approximate any amount of damages with reasonable certainty, let alone a minimum of $10,250,000.
The deposition testimony Plaintiff presented does not substantiate its damages or
establish the fact of damages and the trial court properly granted summary judgment
against it on its claims for damages.
II. The Court Correctly Ordered Plaintiffs Belated Expert Report to be Stricken and Was Well Within Its Discretion to Refuse to Allow It.
Plaintiff asks the Court, without discussion of the merits or analysis of the
arguments made below, to summarily reverse the trial court's ruling striking the belated
expert report because it was based "in part" on the earlier ruling on summary judgment.
There can be no good faith dispute, however, that Plaintiff served its Expert Report 268
days after the deadline established by the operative scheduling order. Thus, there also
can be no dispute that it was properly excluded by Judge Faust and that he was well
within his broad discretion in doing so. In addition, contrary to Plaintiffs attempt to
38 frame the court's decision to strike its untimely expert report as flowing from its earlier ruling on summary judgment, it is entirely distinct from that earlier ruling.
"As a general rule, '[t]rial courts have broad discretion in managing the cases assigned to their courts.'" Posner, 2009 UT App 347, Tf 23 (quoting Preston & Chambers,
P.C. v. Roller, 943 P.2d 260, 262 (Utah Ct. App. 1997)). This broad discretion includes establishing scheduling orders governing discovery deadlines and imposing sanctions as authorized by Utah Rule of Civil Procedure 37(b)(2) in the event that a party fails to obey a scheduling order. Id. f 23 (citing Utah R. Civ. P. 16(b)(3) and (d)).
Relevant to the trial court's decision to strike Plaintiffs belated expert report, Rule
37(b)(2) provides in part that "[i]f a party fails to obey an order entered under Rule 16(b)
. . . the court . . . may . . . prohibit the disobedient party from supporting or opposing designated claims or defenses or from introducing designated matters in evidence; . . .
[and] strike pleadings or parts thereof. . . ." Utah R. Civ. P. 37(b)(2)(B) and (C). In addition, Rule 37(f) mandates an additional sanction for a failure to disclose a witness, document or other material as required by Rule 26(a). Utah R. Civ. P. 37(f); Posner, 2009
UT App 347, If 23 (citing Utah R. Civ. P. 37(f)). Specifically, Rule 37(f) states that the
"party shall not be permitted to use the witness, document or other material at any hearing unless the failure to disclose is harmless or the party shows good cause for the failure to disclose" Utah R. Civ. P. 37(f) (emphasis added).
This Court recently addressed exactly the same issue presented here in Posner.
There, the trial court set a deadline for designating expert witnesses of December 12,
2006. Posner, 2009 UT App 347, f 24. The plaintiff, however, did not disclose his expert
39 witness until December 26, 2006—a mere fourteen days late. Id. The trial court excluded the expert report, finding the plaintiff had missed the deadline, that no agreement to extend the deadline existed, and that the plaintiff had failed to show good cause for the untimely filing. Id. at ffl[ 24-25. This Court found no error in the trial court excluding the report. The Court noted that the record showed that the plaintiff had failed to designate his expert during the nearly three and one-half years the case had been pending, and did not designate his expert until the defendant moved for summary judgment, two weeks
after the deadline for designation. Id. at % 25. Accordingly, the Court in Posner,
concluded that the trial court had acted within its discretion in finding the plaintiff had
failed to show good cause and, therefore, excluding the expert report. Id.
Plaintiffs conduct here is even more egregious than the plaintiffs in Posner.
Plaintiffs expert report was filed 268 days late as opposed to the mere fourteen days late
in Posner. In addition, Plaintiff, like the plaintiff in Posner, had years to designate an
expert and failed to do so until after the deadline and the Eagle Gate Parties, like the
defendant in Posner, filed a motion for summary judgment. But unlike the plaintiff in
Posner, who at least designated his expert in response to the defendant's motion for
summary judgment, Plaintiff chose instead to wait and file it two months after the trial
court's decision granting the Eagle Gate Parties' First Motion for Summary Judgment.
This delay is made more significant considering the fact Plaintiff controlled the
information necessary for its expert report. (Mem. Decision 4, Jan. 30, 2008, Addendum
Ex. A, R. 3567.)
40 Plaintiff never asserted that good cause existed for its belated filing, but instead chose to assert that its expert report was miraculously timely because Plaintiff had filed a motion to extend18 two days before the expert report deadline and its untimely expert report constituted "new evidence."19 (PL's Mem. in Opp'n to Defs.' Mot. to Strike
Prelim. Expert Report of Brad Townsend and the Aff. of Brad Townsend 2-6, R. 3950-
3955.) The trial court acted well within its discretion when it refused to allow this incredibly tardy filing and ordered Plaintiffs expert report stricken.
Finally, as noted above, Plaintiff asserts this decision should be summarily vacated if the Court reverses the order granting summary judgment because it was based "at least in part" on the district court's grant of summary judgment. (Appellant Br. 2.) Plaintiffs argument fails on two levels. First, the cases cited by Plaintiff do not require the reversal of subsequent orders based "in part" on an earlier erroneous ruling. Rather, they stand for the proposition that orders made subsequent to an erroneous ruling should be reversed only if the later orders would not have been made but for the erroneous ruling, which is not the situation here.
Plaintiff purported in its Second Motion to Extend that it needed additional time to review Eagle Gate College's electronic database in native format and to depose individuals who formerly worked for Plaintiff and subsequently worked for Eagle Gate. But that is belied by the reason it provided for extending the case in its First Motion to Extend a few months before. There it stated it needed time only to depose Todd Knecht and Review Ms. Miller's hard drive. Had Plaintiff truly needed the database and to depose any other witnesses it would have and should have included that information in the First Motion to Extend. It did not, thereby showing that either Plaintiff either did not need this evidence or was simply not diligent in its discovery.! 19 The only "new" evidence created by the untimely expert report was new evidence that Plaintiffs tactical decision not to timely file an expert report was not because Plaintiff lacked the ability to file an expert report.
41 For example, Plaintiff cites to McKee v. Williams, in which the trial court erroneously entered summary judgment declaring the plaintiff to still be a shareholder in a closely held corporation. 741 P.2d 978, 980-82 (Utah Ct. App. 1987) (cited in
Appellant Br. 19). Following that erroneous ruling, the trial court held additional proceedings and issued orders and judgments solely because of its erroneous ruling. Id.
Specifically, the court entered a judgment of contempt and a penalty against the plaintiff for failing to provide corporate information to the defendant pursuant to Utah Code section 16-10-47(c). Id. at 980. In addition, the trial court awarded the plaintiff damages and attorney's fees. Id. Similarly, Plaintiff cites to Loporto v. Hoegemann, in which the trial court erroneously entered a default judgment against the wife in a divorce action.
1999 UT App 175, U 14, 982 P.2d 586. Based on that erroneous ruling, the trial court awarded the husband the relief sought in his complaint, as well as attorney's fees and his entire retirement fund. Id. at <[[ 4. Thus, when this Court reversed the entry of default against the wife, it also reversed the subsequent rulings. Id. at ^f 15.
Although the trial court generally referenced its "prior rulings" as forming part of the bases of its decision to strike Plaintiffs expert report, and specifically referenced its ruling on Plaintiffs Motion for Reconsideration, it also based its decision on the
"grounds articulated in [the Eagle Gate Parties'] Motion to Strike" (Minute Entry 1, May
30, 2008, Addendum Ex. D, R. 3994), which remain valid regardless of the court's prior rulings. Thus, unlike the subsequent rulings after the erroneous rulings in McKee and
Loporto, the trial court's decision to strike Plaintiffs untimely expert report stands on its own. Even if the trial court had denied the Eagle Gate Parties' First Motion for
42 Summary Judgment, the Motion to Strike would have been well taken. Plaintiffs expert report was incredibly late and, regardless of the trial court's determination on the Motion
for Summary Judgment, it was well within the bounds of its broad discretion to strike
Plaintiffs untimely expert report.
III. Regardless of Its Decision on Summary Judgment, the Trial Court Correctly Excluded Evidence of Damages.
As noted above, while the trial court's decision granting the Eagle Gate Parties'
Motion in Limine on evidence of damages, was related "in part" to its earlier ruling on
summary judgment, this issue is also distinct from the earlier ruling on summary judgment insofar as it relates to expert testimony. Regardless of the trial court's earlier
ruling on the Motion for Summary Judgment, Plaintiffs expert report was properly
excluded. Therefore, expert testimony as to damages was properly excluded by the trial
court's ruling on the Motion in Limine. Accordingly, the ruling was proper and should
not be reversed at least as it pertains to expert testimony.
IV. The Court Properly Granted the Second Motion for Summary Judgment on Plaintiffs CFAA Claim.
The CFAA requires that Plaintiff evidence "loss to 1 or more persons during any
1-year period . . . aggregating at least $5,000" as a prerequisite to bringing a CFAA claim.
18 U.S.C.A. § 1030(a)(5)(b) and (g) (2003). Plaintiff does not dispute that the absence of
such evidence is fatal to its CFAA claim. Yet, Plaintiff seeks to have the Court, as with
the rulings on the Motion to Strike and Motion in Limine, summarily reverse the trial
court's decision granting summary judgment on Plaintiffs CFAA claim because Plaintiff
purports it was based uin part" on the earlier ruling on the First Motion for Summary
43 Judgment. (Appellant Br. 20.) Plaintiff, however, fails to even attempt to explain how this decision is based on or inextricably tied to the earlier decision. This is likely because it is not.
In making its ruling, the trial court stated in relevant part as follows:
In light of the Court's prior rulings, the Plaintiff cannot substantiate damages aggregating at least $5,000 in value and therefore cannot meet the statutory threshold for bring a civil action under the CFAA. Further, consistent with the Court's prior observations, Ms. Dewsnup's general testimony concerning damages is not sufficient in this regard.
(Mem. Decision 3, Aug. 31, 2009, Addendum Ex. C, R. 4366.) Although the trial court did not specify which of its prior rulings it is referring to, the most reasonable inference is that it was referring to its ruling striking the expert report on damages, which would in large part preclude Plaintiff from establishing $5,000 in damages. In addition, the trial court found the only evidence Plaintiff cited in opposition to the Eagle Gate Parties'
Motion for Summary Judgment on the CFAA - deposition testimony of Ms. Dewsnup - to be insufficient to establish the requisite amount of damages. (Id.) Interestingly,
Plaintiff does not challenge that conclusion either.
Rather, Plaintiff asks this Court, without any analysis of the underlying decision, the evidence presented, or the relevant controlling statute, to reverse a grant of summary judgment merely because of its chronological proximity to another decision. Thus, it
says, because the First Motion for Summary Judgment preceded the Second, if the former
is reversed, so too must be the latter. This "analysis" that court decisions are like sticks
in a Jenga game is not supported by authority or common sense.
44 CONCLUSION
Judge Faust diligently reviewed the extensive record in this case and held that
Plaintiff had failed to substantiate its damages, that the time for doing so had passed, and entered summary judgment accordingly. He further held that Plaintiffs equitable claim under the CFAA failed, and exercised his broad discretion to order Plaintiffs extremely late expert report to be stricken and exclude evidence of damages at the trial of this matter. Plaintiff has not presented any evidence or case law that warrants the reversal of these decisions. The Eagle Gate Parties therefore respectfully request that the Court affirm the trial court's rulings on each of these decisions.
DATED this jlAday of April, 2010.
ANDERSON & KARRENBERG
Thomas R. Kiairenberg Jennifer R. Eshelman
-and-
CLYDE SNOW & SESSIONS Nathan B. Wilcox
Attorneys for Defendants/Appellees Eagle Gate College, Provo College, and J ana Miller
45 CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the U^Ti-day of April, 2010, I did cause two true and correct copies of the foregoing BRIEF OF APPELLEES EAGLE GATE
COLLEGE, PROVO COLLEGE AND JANA MILLER to be served via first-class mail, postage prepaid, upon the following:
Robert E. Mansfield Troy L. Booher Snell & Wilmer 15 West South Temple, Suite 1200 Salt Lake City, Utah 84101 -1004 Attorneys for Plaintiff/Appellant
Mark N. Brian P.O. Box 173 Spanish Fork, Utah 84660
Wallace Rogers 4376 South 2675 West Roy, Utah 84067
46 ADDENDUM OF EXHIBITS
A. Memorandum Decision, January 30, 2008, R. 3564-3569.
B Order Granting Summary Judgment Against Plaintiff on Its Claims Against Eagle Gate College, Provo College and Jana Miller, March 10, 2008, R. 3670-3682.
C. Memorandum Decision, August 31,2009, R. 4364-4370.
D. Minute Entry, May 30, 2008, R. 3994-3996.
E. Plaintiffs Responses to Jana Miller's First Set of Interrogatories, May 7, 2007, R. 3266-3277.
F. Plaintiffs Responses to Eagle Gate College and Provo College's First Set of Interrogatories, May 7, 2007, R. 3279-3298.
G. Minute Entry, July 26, 2007, R. 2994-3001.
H. Motion Hearing Transcript, January 22, 2008, R. 3574.
I. Minute Entry, May 12, 2008, R. 3987-3990
J. Excerpts from Memorandum in Opposition to Defendant's Motion for Summary Judgment, R. 3311,3332-35
47 Tab A IN THE DISTRICT COURT OF THE THIRD JUDICIAL DISTRICT
IN AND FOR SALT LAKE COUNTY, STATE OF UTAH
STEVENS-HENAGER COLLEGE, MEMORANDUM DECISION
Plaintiff, CASE NO. 040921860
vs.
EAGLE GATE COLLEGE, PROVO COLLEGE, MOSESE IONGI, TREVOR SMITH, WALLACE ROGERS, RICHARD HORWITZ, STEVEN TODD KNECHT and JANA MILLER,
Defendants.
This matter came before the Court on January 22, 2007, in connection with Defendants Eagle Gate College, Provo College and Jana Miller's
Motion for Summary Judgment. The Court will refer to these parties herein as the "Eagle Gate Parties.7'' At the conclusion of the hearing, the Court took the matter under advisement to further consider the parties' respective legal positions, their written submissions and counsel's oral argument. The Court should note that during the hearing, a representative of Eagle Gate College was permitted to speak briefly on the issue of what was contained in documents that were produced by the
Eagle Gate Parties in November of 2007. While these statements provided helpful clarification, the Court did not rely on them in forming its decision on the pending Motion for Summary Judgment. The Court rules on that Motion as stated herein. STEVENS-HENAGER COLLEGE V. EAGLE GATE COLLEGE PAGE 2 MEMORANDUM DECISION
LEGAL ANALYSIS
The Eagle Gate Parties' Motion for Summary Judgment asserts that the
Plaintiff has failed to provide the basis for and a calculation supporting its damages claim. The Plaintiff counters that an expert opinion concerning damages has been delayed because the Eagle Gate
Parties have only recently provided information necessary to compute damages.
Notably, the parties agree that expert testimony is needed in order to establish damages in this case. Further, in reviewing the procedural history of this matter, which spans over four years, it is apparent that the Plaintiff has had ample opportunity to designate an expert on damages, to formulate the basis of its damages claim and to provide an expert report concerning the same.
During the hearing, it became clear that the information which would substantiate such damages is, at least in part, in the Plaintiff's own possession. Further, the Court is satisfied that through discovery the
Plaintiff has been able to glean the remaining information necessary for its experts to assess damages and to issue a report concerning the same.
In reaching this conclusion, the Court carefully considered, but was unpersuaded by the Plaintiff's theory that the information provided by the Eagle Gate Parties was "substantially incomplete" until the November supplementation. In this regard, the Plaintiff relies heavily on the fact that the Court previously ordered supplementation of a "lead list" STEVENS-HENAGER COLLEGE V. EAGLE GATE COLLEGE PAGE 3 MEMORANDUM DECISION and spreadsheet provided by the Eagle Gate Parties, to the extent that this information was incomplete. To be clear, the Court determines that even in the absence of such supplementation, the Plaintiff had already been provided sufficient information for its experts to calculate damages. Despite this, the Plaintiff has failed to produce any calculations or expert reports concerning damages and all relevant deadlines have now passed.
Counsel for the Plaintiff alluded to having previously sought to extend the deadlines in this case and indicated that the Court had not yet ruled on that Motion. The Plaintiff did file a Motion to Extend the
Dates Set Forth in the Order Granting Plaintiff's to Extend Discovery
Period on June 26, 2007. It appears that this Motion may have been overlooked because of the flurry of other Motions which were pending at that time. However, as the Court pointed out during the hearing, the
Plaintiff has effectively had nearly six months (rather than the 60 days sought) to have its experts complete their expert reports on damages.
Despite the passage of this extensive time period, the Plaintiff is apparently no closer to submitting an expert report than it was when the request for extension was filed.
It should also be noted that the Plaintiff has requested extensions in the past, which the Court has previously granted. However, at this juncture, there is simply no excuse or justification for the Plaintiff's delays in providing expert reports and computations of its damages. STEVENS-HENAGER COLLEGE V. EAGLE GATE COLLEGE PAGE 4 MEMORANDUM DECISION
Indeed, while the Plaintiff had sufficient information to formulate the basis for its damages claim and to provide expert reports, even if on a preliminary basis, it apparently made a tactical decision not to do so.
The Plaintiff, and not the Eagle Gate Parties, bears responsibility for having failed in this regard.
The Court is similarly unpersuaded by counsel's suggestion that until causation could be assessed, it was impossible for the Plaintiff
to calculate damages. The factual issues surrounding causation in this
case are not the subject of expert testimony and would not preclude the
Plaintiff from making the separate assessment of damages (again, even if
on a preliminary basis).
Overall, the Court determines that despite this late stage in the
litigation, the Plaintiff has failed entirely to substantiate its damages
claim. Further, the Court is simply not persuaded that the Plaintiff has been unable to do so because of a lack of information. The Court reiterates that the Plaintiff has had sufficient information to compute damages, but has failed to produce any calculations or expert reports to
substantiate its damages claim and the time for doing so has now expired.
In the absence of evidence to substantiate the damages element of the
Plaintiff's claims, the Court grants summary judgment in favor of the
Eagle Gate Parties.
Counsel for the Eagle Gate Parties is to prepare an Order consistent, but not limited to, this Memorandum Decision, indicating that STEVENS-HENAGER COLLEGE V. EAGLE GATE COLLEGE PAGE 5 MEMORANDUM DECISION their Motion for Summary Judgment is granted. Counsel should include a procedural history detailing the information provided, extensions granted and the Plaintiff's failure to produce expert reports or calculations of damages (despite repeated requests by the Eagle Gate Parties) .
Dated this of January, 2008.
ROBERT P. DISTRICT COURT
Oj^lA STEVENS-HENAGER COLLEGE V. EAGLE GATE COLLEGE PAGE 6 MEMORANDUM DECISION
MAILING CERTIFICATE
I hereby certify that I mailed a true and correct copy of the
foregoing Memorandum Decision, to the following, this Tj\ day of
January, 2008:
Robert E. Mansfield Scott M. Lilja Lisa B. Bohman Attorneys for Plaintiff 36 S. State Street, Suite 1900 Salt Lake City, Utah 84111
Thomas R. Karrenberg Nathan B. Wilcox Jennifer R. Eshelman Attorneys for Defendants Eagle Gate College, Provo College, Horwitz and Miller 50 W. Broadway, Suite 700 Salt Lake City, Utah 84101-2006
Wallace Rogers 4376 South 2675 West Roy, Utah 84067
Mark N. Brian Attorney for Defendants Iongi and Smith P.O. Box 173 Spanish Fork, Utah 84660 TabB FILES DISTRICT COURT ANDERSON & KARRENBERG Third Judicial District Thomas R. Karrenberg, #3726 Nathan B. Wilcox, #6685 MAR I o 2008 Jennifer R. Eshelman, #9155 SALr LAKE COUNTY By.jT.jy 700 Chase Tower Deputy Clerk 50 West Broadway Salt Lake City, Utah 84101-2006 Telephone: (801) 534-1700 Facsimile: (801)364-7697
Attorneys for Eagle Gate College, Provo College and Jana Millter
IN THE THIRD JUDICIAL DISTRICT COURT
SALT LAKE COUNTY, STATE OF UTAH
STEVENS-HENAGER COLLEGE, ORDER GRANTING SUMMARY JUDGMENT AGAINST PLAINTIFF ON Plaintiff, ITS CLAIMS AGAINST EAGLE GATE COLLEGE, PROVO COLLEGE AND vs. JANA MILLER (Breach Of Contract; Violation Of The Uniform Trade Secret EAGLE GATE COLLEGE, PROVO Act; Interference With Contractual COLLEGE, MOSESEIONGI, TREVOR Relations; Violation Of The Federal SMITH, WALLACE ROGERS, Computer Fraud And Abuse Act; RICHARD HORWITZ, STEVEN TODD Statutory Unfair Competition; And Civil KNECHT and JANA MILLER, Conspiracy)
Defendants. Case No. 040921860
Judge Robert Faust
Eagle Gate College, Provo College, and Jana Miller's (the "Eagle Gate Parties") Motion
for Summary Judgment (re: Claims Against Eagle Gate College, Provo College and Jana Miller)
came on for hearing before the Court on January 22, 2008. The Eagle Gate Parties were represented by Thomas R. Karrenberg, Nathan B. Wilcox and Jennifer R. Eshelman of Anderson
& Karrenberg. Plaintiff was represented by Robert E. Mansfield, Scott M. Lilja and Lisa B.
Bohman of VanCott Bagley Cornwall & McCarthy. The Court, having carefully reviewed and
considered the pleadings and papers submitted by the parties with respect to the Motion, and having rendered its Memorandum Decision on January 30, 2008, hereby enters the following
order:
IT IS HEREBY ORDERED, ADJUDGED AND DECREED:
For the reasons set forth in the Memorandum Decision dated January 30, 2008, and set
forth in further detail below, the Eagle Gate Parties' Motion for Summary Judgment is granted.
Plaintiffs claims for Breach of Contract, Violation of the Uniform Trade Secrets Act,
Interference with Contractual Relations, Interference with Prospective Economic Relations,
Violation of the Federal Computer Fraud and Abuse Act, Statutory Unfair Competition, and
Civil Conspiracy are hereby dismissed with prejudice.
Procedural History
On October 16, 2004, Plaintiff filed its Complaint against the Eagle Gate Parties, among
others, asserting claims for Breach of Contract,1 Violation of the Uniform Trade Secrets Act,
Interference with Contractual Relations, Interference with Prospective Economic Relations,
Violation of the Federal Computer Fraud and Abuse Act, Statutory Unfair Competition, and
The Breach of Contract Claim was only asserted against Ms. Miller.
2 Civil Conspiracy. (Statement of Facts ("SOF") *jfl| 1 and 2.2) For its causes of action, Plaintiff claimed over three years ago that it had incurred, and was therefore entitled to, damages in amounts
"not less than" $10,250,000.00. {See Compl. pp. 27 - 30.)3 Despite the averments in its Complaint of damages of not less than $10,250,000.00, on November 15, 2004, Plaintiff represented in its
Initial Disclosures that it had "not yet computed the damages it has suffered as alleged in the
Complaint." (SOF ^ 5.)
On November 18, 2004, counsel for the Eagle Gate Parties sent a letter to Plaintiffs counsel requesting that in light of the allegations in Plaintiffs Complaint of damages in specified minimum amounts and its admission that it had not computed any damages, Plaintiff either supplement its
Initial Disclosures or amend its Complaint. (SOF \ 6.) Counsel for Plaintiff responded that
2 The Eagle Gate Parties' Motion for Summary Judgment cited to a "Statement of Facts." Plaintiff responded to facts nos. 1, 2, 3, 10, 15, 20, 21, 23, 24, 26, 27, 28, 29, and 31, as "Undisputed" or "Undisputed and immaterial," and facts nos. 4, 5, 6, 14, 22, as "Undisputed but incomplete" and cited additional information. These facts are uncontroverted pursuant to Rule 7(c)(3)(A) of the Utah Rules of Civil Procedure and deemed admitted. 3 Specifically, Plaintiff alleges in its Complaint that it was entitled to damages against the Eagle Gate Parties in the following amounts for the following claims: "not less than the sum of $250,000" ~ breach of contract against Ms. Miller individually {see Compl. p. 27); "not less than the sum of $1,000,000" - violation of the Uniform Trade Secrets Act {see Compl. p. 28); "not less than the sum of $1,000,000" - interference with contractual relations {see id); "not less than the sum of $1,000,000" -- interference with prospective economic relations {see Compl. p. 29); "not less than the sum of $1,000,000" - violation of the Computer Fraud and Abuse Act {see id. ); "not less than the sum of $1,000,000"- statutory unfair competition {see Compl. p. 30 ; and "not less than the sum of $5,000,000" - civil conspiracy (see jd).
(SOFK3.)
3 "Plaintiff was not able to give a detailed computation of its damages at that point in the litigation."
(Plaintiffs Responses to SOF f 6.)
Thereafter, the Eagle Gate Parties' counsel contacted Plaintiffs counsel to request that
Plaintiff identify the factual basis for its claim in its Complaint that it had damages in excess of
$10,000,000.00, including the computation thereof. (SOF f 7 4) In response, Plaintiffs counsel represented that the computations were simply an estimate made by some of the members of
Plaintiffs management as to the amount of Plaintiff s damages, but that there were not any specific documents or computations on which Plaintiff based its damages allegations in its Complaint. (SOF
17.)
On December 15, 2004, the Eagle Gate Parties sent a letter to Plaintiffs counsel asking for clarification of Plaintiff s counsel's representation that "the calculation of [damages], as set forth in [the] Complaint, was simply a guess by some members of management as to the damages that [Plaintiff] may have incurred" and requesting that Plaintiff comply with its obligations under Rule 26 of the Utah Rules of Civil Procedure. (SOF ^ 8.5)
On December 2, 2004, the Eagle Gate Parties served Plaintiff with Defendants Eagle Gate
College, Provo College, Richard Horwitz and Jana Miller's First Request for Production of
Documents. (SOF ^| 9.) In their Requests for Production of Documents, the Eagle Gate Parties requested that Plaintiff produce "any and all documents that evidence, refer or relate to, or are
4 In response to SOP T| 7, Plaintiff made a statement about what it did not dispute, but failed to controvert any of the facts set forth therein. Thus, the facts set forth in SOP ^| 7 are deemed admitted.
5 In response to Statement of Fact No. 8, Plaintiff does not dispute that the letter was sent or the content of the letter.
4 sufficient to ascertain any damages Stevens-Henager claims to have suffered as a result of any of the Defendant's purported misappropriation of the iead list' or other trade secrets." The Eagle Gate
Parties further requested the production of "all documents that evidence, refer or relate to, or are
sufficient to ascertain any damages Plaintiff allegedly suffered as a result of [the alleged actions of the Defendants] including, but not limited to, any computation of such alleged damages." (SOF lio.)
On January 10, 2005, Plaintiff responded to each of the Eagle Gate Parties' Requests for
Production of Documents relating to damages with a verbatim restatement of the explanation set
forth in its Initial Disclosures: "[Plaintiff] has not yet computed the damages it has suffered .... To
the extent any of these categories of damages can be quantified, [Plaintiff] will supplement these
responses when sufficient information is available by which to make such calculations." (SOF ^[116
and Response thereto.)
On July 1, 2005, the Eagle Gate Parties filed a Motion to Compel seeking an order from the
Honorable Judge Steven Roth compelling Plaintiff to, inter alia^ (a) amend its Initial Disclosures
to provide a damage computation and (b) appropriately respond to the Eagle Gate Parties'
discovery requests regarding damages. {See Mot. to Compel and for Sanctions, July 1, 2005.)
After hearing oral argument on the matter, Judge Roth ordered Plaintiff to respond to the Eagle
Gate Parties' document requests regarding damages. {See Order Re: Mot. to Compel and for
Sanctions, December 30, 2005.) In response to Judge Roth's Order compelling Plaintiff to
6 Plaintiff purported to dispute SOF H 11, but the cited evidence does not controvert it. Thus, it is admitted.
5 produce documents that support its damage claims, in early January 2006, Plaintiff produced documents purporting to summarize the "starts" at its various campuses from 2003 to 2005 by month and quarter and Quick Books print outs titled General Ledger and Trial Balance for
Plaintiff at its various campuses. (SOF % 16.7) None of the documents produced contained any calculations of damages or explanation as to how the documents supported or evidenced
Plaintiffs claim of damages in excess of $10,000,000.00. (SOF % 19.8)
On January 12, 2006, counsel for the Eagle Gate Parties again requested in writing that
Plaintiff provide the underlying documents supporting the summaries and other documents that
Plaintiff claimed supported its damages. (SOF % 17.9) Plaintiff, however, did not respond to the request by counsel. (SOF % 17.)
On June 9, 2006, counsel for the Eagle Gate Parties sent another letter to counsel for
Plaintiff asking Plaintiff to confirm that there were no other documents relating to Plaintiffs claim of over $10,000,000.00 in damages beyond the summaries of starts and the General
Ledgers and Trial Balances. (SOF K 18.) Plaintiffs counsel did not respond. (SOF ^ 18.10)
On or about January 17, 2007, Jana Miller served her First Set of Interrogatories on
Plaintiff. (SOF ^ 20). Many of Ms. Miller's Interrogatories asked Plaintiff to identify u[a]ll
7 Although Plaintiff purports to dispute this fact, the affidavit testimony it cites to controvert it does not controvert it and it is deemed admitted under Rule 7(c)(3)(A) of the Utah Rules of Civil Procedure. 8 Although Plaintiff purports to dispute this fact, the deposition testimony it cites to controvert it does not controvert it and it is deemed admitted under Rule 7(c)(3)(A) of the Utah Rules of Civil Procedure. 9 Although Plaintiff purports to dispute this fact and labels it as immaterial, claiming that it need not respond to informal requests for documents, the affidavit testimony it cites to controvert it does not controvert it and it is deemed admitted under Rule 7(c)(3)(A) of the Utah Rules of Civil Procedure. 10 Although Plaintiff purports to dispute this fact and labels it as immaterial, claiming that it need not respond to informal requests for documents, the affidavit testimony it cites to controvert it does not controvert it and it is deemed admitted under Rule 7(c)(3)(A) of the Utah Rules of Civil Procedure.
6 damages that [Plaintiff] claim[s] to have [or purportedly] suffered as a result of [the alleged acts of Ms. Miller], including a detailed statement of the method of the calculation of any such damages and any facts [Plaintiff] relied upon in computing any alleged damages." (SOF ^ 21.)
Plaintiff repeatedly responded to the above referenced requests for information concerning the identification and calculation of damages by simply stating that "Plaintiffs experts will provide information and analysis concerning the damages suffered."(SOF 11,22.)
Similarly, on or about January 17, 2007, Eagle Gate and Provo College served their First
Set of Interrogatories on Plaintiff. (SOF ^ 23.) Eagle Gate and Provo College's Interrogatories asked Plaintiff to identify "[a]U damages that [Plaintiff] purportedly suffered as a result of [the various alleged acts of Eagle Gate or Provo College], including a detailed statement of the method of the calculation of any alleged damages and any facts [Plaintiff] relied upon in computing any alleged damages." (SOF % 24.) Plaintiff repeatedly responded to the requests for information concerning damages by stating that "Plaintiffs experts will provide information and analysis concerning the damages suffered." (SOF U 251 ].)
In November, 2006, the parties filed a Second Joint Motion to Amend Scheduling Order and the Second Amended Scheduling Order was entered by Judge Skanchy on November 16,
2006. The November 16, 2006 Order established a fact discovery deadline of February 28, 2007,
and a deadline for expert witness reports of March 9, 2007. On March 7, 2007, Plaintiff filed a
11 Although Plaintiff purports to dispute this fact, the affidavit testimony it cites to controvert it does not controvert it and it is deemed admitted under Rule 7(c)(3)(A) of the Utah Rules of Civil Procedure.
7 motion to extend the discovery cutoff in the case. The basis for its request for an extension of the discovery cutoff was specifically stated in its Reply Memorandum as follows:
In seeking an extension to conduct fact discovery,, Plaintiff seeks additional time for only two purposes. First, it seeks an extension to permit its experts to review the hard drive of Jana Miller...and to follow up on any additional discovery arising from that review. Second, it seeks an extension to conduct the out-of-state deposition of Todd Knecht, a party to this action whose whereabouts had previously been unknown.
On April 18, 2007, the Court granted Plaintiffs Motion and extended the pertinent deadlines by sixty days, establishing the new deadline for the completion of all fact discovery as June 18,
2007, and the deadline for Plaintiff to provide any expert witness reports as June 28, 2007.
Beyond conducting the deposition of Mr. Knecht on June 12, 2007, Plaintiff conducted no further discovery during the extended discovery period.
On June 6, 2007, Plaintiff filed a Motion to Compel Defendant's Discovery Responses seeking an order compelling contact information for former employees of Plaintiff who had subsequently worked for either Eagle Gate College or Provo College12 and to "produce a copy of
Eagle Gate College's database in its original format." The Motion was based, in relevant part, on its requests seeking "Copies of each lead list prepared, accessed, modified, or otherwise used in carrying out his or her responsibilities to Eagle Gate College by Jana Miller, Todd Knecht and
Wallace Rogers" and "Documents sufficient to ascertain each and every change or alteration to any lead list owned, possessed, or otherwise controlled by Eagle Gate College that were made by Jana Miller, Todd Knecht, and Wallace Rogers."
12 This information was subsequently provided.
8 Eagle Gate and Provo College opposed the Motion, asserting that neither of the document requests that Plaintiff referenced requested the production of the entirety of Eagle Gate's database. On July 26, 2007, the Court, accordingly entered a Minute Entry ruling that because
Plaintiff had not requested the database in discovery, the Court could not compel its production.
The Court also noted, based on the pleadings submitted, that Eagle Gate College and Provo
College had appropriately responded to the requests by compilipg a list of 37,000 names of potential students and their contact information and provided a spreadsheet identifying changes made to the database by Jana Miller.
On June 20, 2007, in response to interrogatories from Plaintiff, Provo College and Eagle
Gate College produced hard copies of spreadsheets identifying all of the "self-generated" leads for the individual defendants in this matter.
On June 25, 2007, Plaintiff filed another Motion to Extend the discovery period seeking to extend all of the discovery deadlines and other dates by sixty days from the entry of an order granting the Motion to Extend. Plaintiff alleged that it required the requested extension so that it could review Eagle Gate College's electronic database in "native format" (a request the Court had already declined to compel because it had not been requested in discovery), and to depose individuals who formerly worked for Plaintiff who had since worked for Eagle Gate or Provo
College—a heretofore unmentioned reason for extending discovery. Thereafter, the Plaintiff did
not do any further discovery of the Eagle Gate Parties.
On October 9, 2007, the Eagle Gate Parties filed their Motion for Summary Judgment on
all of Plaintiff s claims against them. In the summary judgment motions, the Eagle Gate Parties
9 alleged that (a) Plaintiff had failed to provide a basis for, and a calculation of, its damages claim,
(b) Plaintiff had failed to provide any expert reports substantiating its damages (which it had
claimed was necessary), and (c) the time for providing expert reports or expert discovery and fact
discovery had passed. Plaintiff opposed the motion for summary judgment alleging that it needed an expert witness to provide a calculation of its damages set forth in its Complaint filed
in October 2004, and that it had been unable to provide an expert report during the preceding three years because the Eagle Gate Parties had only recently provided the information necessary
for it to do so.
It is uncontrovertible, however, that based upon what Plaintiff alleges are the categories
of its damages, it is Plaintiff - not the Eagle Gate Parties - that possesses material information
relating to the calculation of Plaintiff s damages. It is also undisputed that the information that
Plaintiff alleges that it needs from the Eagle Gate Parties to compute its damages has been, at
least in part, in Plaintiffs possession since before Plaintiff commenced this litigation.
Specifically, in opposition to the Eagle Gate Parties' Motion, Plaintiff submitted the deposition
testimony of Plaintiffs President, Carl Barney, in which Mr. Barney testified that Plaintiffs
damages consisted of "[t]he loss of starts," "[t]he cost of hiring and training new people" and
"[tjhe efforts to rebuild the admissions department."
Plaintiffs briefing characterized its damage claim as including "an analysis of the impact
of Defendants' breach of employment contracts on Stevens-Henager enrollment rates and the
value of Plaintiff; and an analysis of the increased costs and decreased productivity caused by
Defendants' poaching of Plaintiff s employees."
10 Plaintiff, not the Eagle Gate Parties, possesses the information necessary to calculate its alleged damages the loss of employees had on its enrollment rates, the cost of hiring and training new people, and the cost of rebuilding its admissions department. Yet, it has supplied no calculation or evidence regarding these damages whatsoever supporting its damages claims.
Plaintiff indicated at the hearing that these damages were not the main damages sought by
Plaintiff. The Court finds this troubling in light of the fact that Plaintiffs Complaint seeks damages in an amount "not less than the sum of $1,000,000" against the Eagle Gate Parties for
IT interfering with its contractual relations with its employees.
Even if these damages are not the main damages sought by Plaintiff, the fact remains that it had a duty to compute them and provide them to the Eagle Gate Parties pursuant to Rule 26 and the Court's multiple scheduling orders and did not. Moreover, the Eagle Gate Parties provided Plaintiff with sufficient information for its expert(s) to calculate, even if preliminarily,14 the other damages Plaintiff claims.15
To allege damages in its Complaint in good faith as "not less than" sums, Plaintiff must have engaged in some form of computation. Indeed, Rule 11 mandates that Plaintiffs allegations must be based upon some reasonable inquiry or belief and have an evidentiary basis. See Utah R. Civ. P. 11(b)(3); see also Rhineheart v. Stauffer, 638 F. 2d 1169, 1171 (9th Cir. 1980) (before filing complaint, attorney has duty to "ascertain that the damages sought appear to bear a reasonable relation to injuries actually sustained"); Hudson v. Moore Business Forms, Inc., 836 F. 2d 1156, 1162 (9th Cir. 1987) (damages alleged in prayer for relief "must meet the Rule 11 standard of reasonableness"). Plaintiffs repeated admission that it has not computed its damages is a tacit admission that the allegations of damages in its Complaint in amounts of "not less than" $250,000.00, $1,000,000.00, and $5,000,000.00 violate Rule 11. See Simpson v. Chesapeake & Potomac Tel Co,, 522 A. 2d 880, 884 (D.C. 1987) (response to discovery request that answer will be supplied "as discovery continues'5 is "strong circumstantial evident" that plaintiff lacked basis for claims at time of filing; if plaintiffs complaint was based on any pre-filing investigation, plaintiff should have revealed that information in discovery).
14 Plaintiffs counsel indicated at the hearing of this matter that Plaintiff chose not to provide a preliminary analysis due to a concern that it would somehow be used against them at the trial of this
11 Plaintiff has failed and refused to substantiate its damages in over three years of litigation. Instead, Plaintiff has repeatedly stated the information would be provided through its expert witness report(s). The deadlines for discovery and expert witness reports have now come and gone four times with no expert report or computation of damages from Plaintiff. Because damages are an essential element of each of Plaintiff s claims against the Eagle Gate Parties, the
Eagle Gate Parties are entitled to dismissal of Plaintiff s claims against them as a matter of law.
There is no excuse or justification for Plaintiffs failure to provide expert reports and computations of its damages. Accordingly, the time for Plaintiff to have substantiated its damages having passed, Plaintiffs claims against the Eagle Gate Parties are hereby dismissed with prejudice.
DATED: March J6N, 2008
BY THE COUJ
^i *: Honorable Robert THIRD DISTRICT COURT JUDGE
matter. Plaintiffs tactical decision not to provide timely expert reports is not the responsibility of the Eagle Gate Parties and Plaintiff alone bears the responsibility for failing to do so.
15 Plaintiffs suggestion at the hearing that it needed additional information in order to demonstrate causation is also unpersuasive. The causation aspect of Plaintiffs case is not within the domain of its damages expert and would not preclude the Plaintiff from making an assessment of damages, even if only a preliminary assessment.
12 Approved as to form:
VANCOTT BAGLEY CORNWALL & MCCARTHY
Robert E. Mansfield Attorneys for Plaintiff
13 Plot* TabC IN THE DISTRICT COURT OF THE THIRD JUDICIAL DISTRICT
IN AND FOR SALT LAKE COUNTY, STATE OF UTAH
STEVENS-HENAGER COLLEGE, : MEMORANDUM DECISION
Plaintiff, : CASE NO. 040921860
vs. :
EAGLE GATE COLLEGE, PROVO COLLEGE, : MOSESE IONGI, TREVOR SMITH, WALLACE ROGERS, RICHARD HORWITZ, : STEVEN TODD KNECHT and JANA MILLER,
Defendants.
This matter came before the Court for a hearing on July 28, 2009, in connection with the following Motions: Defendants Eagle Gate College,
Provo College and Jana Miller's (the "Defendants") Motion in Limine to
Exclude Evidence of Monetary Damages, Motion in Limine to Exclude Any
Login Tracking Lists that Purport to Show Jana Miller's Alleged Access of Plaintiff's Database and Related Testimony, Motion for Summary
Judgment, Motion to Strike Portions of Plaintiff's Statement of Facts and
Motion to Strike Portions of the Declaration of Vicky Dewsnup and Related
Portions of Plaintiff's Memorandum in Opposition to Defendant's Motion for Summary Judgment. Also before the Court was the Plaintiff's Motion for Partial Summary Judgment and Motion to Strike. At the conclusion of the hearing, the Court took these various Motions under advisement for further consideration of the relevant legal authorities, the parties' STEVENS-HENAGER COLLEGE V. EAGLE GATE COLLEGE PAGE 2 MEMORANDUM DECISION written submissions and counsel's oral argument. Being now fully informed, the Court rules as stated herein.
LEGAL ANALYSIS
At the outset, the Court notes that the parties' various Motions to
Strike are denied. The Court has noted the procedural and evidentiary objections advanced in these Motions, but declines to strike the matters at issue. Rather, the Court will consider these matters for what they are worth, bearing in mind the objections made.
That brings the Court to the crux of the parties' arguments, as raised in their respective Motion for Partial Summary Judgment and Motion for Summary Judgment. These Motions pertain to the Plaintiff's request for permanent injunctive relief under the following claims: (1) Utah
Uniform Trade Secrets Act; (2) interference with current and prospective economic relationships; (3) Federal Computer Fraud and Abuse Act
("CFAA"); and (4) the Utah Unfair Competition Act.
In seeking summary judgment, the Plaintiff asserts that based on the undisputed facts, certain of the Defendants accessed its database while in the scope of their employment with Eagle Gate and Provo College and then used this information, including lead Lists, to recruit the
Plaintiff's employees and/or to solicit prospective students. The
Plaintiff maintains that injunctive relief is required in order to prevent future incidents of the Defendants illegally accessing its confidential database or using information already obtained. STEVENS-HENAGER COLLEGE V. EAGLE GATE COLLEGE PAGE 3 MEMORANDUM DECISION
The Defendants, in turn, seek summary judgment on the basis that the
Plaintiff's claim for injunctive relief fails as matter of law because there is no possible threat of ongoing or future harm. With respect to the Plaintiff's claims under the CFAA, the Defendants argue that based on the Court's prior rulings concerning damages, this claim fails as a matter of law. The Defendants further argue that injunctive relief is unavailable under the Unfair Competition Act.
After considering the parties' respective legal positions, the Court agrees with the Defendants as to the Plaintiff's claim for injunctive relief under the CFAA. In light of the Court's prior rulings, the
Plaintiff cannot substantiate damages aggregating at least $5,000 in value and therefore cannot meet the statutory threshold for bringing a civil action under the CFAA. Further, consistent with the Court's prior observations, Ms. Dewsnup's general testimony concerning damages is not sufficient in this regard.
The Court also agrees with the Defendants with respect to the Unfair
Competition Act. Reading the plain language of the Act, it does not appear that injunctive relief is provided for as a possible remedy under the Act. Accordingly, the Court grants the Defendants' Motion for
Summary Judgment as to the Plaintiff's claims for injunctive relief under the CFAA and the Unfair Competition Act.
However, with respect to the Plaintiff's remaining claims for injunctive relief, the Court is not convinced that the evidence clearly STEVENS-HENAGER COLLEGE V. EAGLE GATE COLLEGE PAGE 4 MEMORANDUM DECISION
demonstrates that these claims are moot. uThe issue of injunctive relief
is moot when the xevents make it absolutely clear the alleged wrongful
behavior could not reasonably be expected to recur.'" Modular Mining
Systems, Inc. v. Jigsaw Technologies, Inc., 2009 WL 1162893 (Ariz. App.
Div. 2) (quoting SAL Leasing, Inc. v. State ex. rel. Napolitano, 10 P.3d
1221, 1221 (Ariz. App. 2000) (internal citations omitted) (emphasis
added). The Court is not persuaded that the facts in this case make it
"absolutely clear" that there exists no threat of future harm. Instead,
the Court determines that this issue, as presented in this specific case,
is factually intensive and warrants a trial on the Plaintiff's
entitlement to injunctive relief. The record before the Court indicates
that some level of improper access did occur previously. The mere fact
that the employees who were involved in this activity were fired is not
sufficient for the Court to determine that the C5i.se has necessarily been
rendered moot, particularly where the future value of the information obtained remains in dispute.
The Plaintiff's Motion likewise presents a set of factual issues, particularly with respect to the scope of prior access, the value of the
information allegedly acquired, the extent of solicitation of prospective
students based on lead lists and the quality and value of the information obtained for future purposes. Again, these are matters that the Court
cannot determine summarily. STEVENS-HENAGER COLLEGE V. EAGLE GATE COLLEGE PAGE 5 MEMORANDUM DECISION
Notably, in their Motion for Summary Judgment, the Defendants suggest that the Plaintiff's claims fail simply because they cannot prove damages (based on the Court's prior rulings). At the same time, however, the Defendants' Motion in Limine states that where the Plaintiff is merely seeking injunctive relief, monetary damages are not relevant. In that Motion, the Defendants correctly indicate that the Plaintiff "need not show monetary damages to establish the need for an injunction - rather, it must show the opposite: that it has suffered harm that is not compensable by monetary damages or any other legal remedy."
The Court agrees that with the exception of the CFAA, which brings the amount of damages to the forefront, the issue of damages with respect to the Plaintiff's remaining claims is indeed irrelevant. Therefore, contrary to the Defendants' argument in their Motion for Summary
Judgment, the Plaintiff's inability to prove monetary damages does not provide a basis for granting summary judgment with respect to its claims for injunctive relief. Rather, if the Plaintiff can meet the standard concerning the threat of harm, for which it does not need to introduce evidence of monetary damages, it can potentially succeed in its equitable claims.
To summarize, the Court determines that there are a number of factual issues in this case which preclude the Court from determining as a matter of law whether or not injunctive relief is warranted in this case. Therefore, the Court denies the Plaintiff's Motion for Partial STEVENS-HENAGER COLLEGE V. EAGLE GATE COLLEGE PAGE 6 MEMORANDUM DECISION
Summary Judgment in the entirety. The Defendants' Motion for Summary
Judgment is granted in part and denied in part. Further, the Defendants'
Motion in Limine regarding evidence of monetary damages is granted.
Finally, as to the Defendants' remaining Motion in Limine, the Court is unwilling to entirely exclude all login tracking lists, and related evidence, that potentially show access of the Plaintiff's database by Ms.
Miller. The Court is willing to consider an adverse inference as a potential remedy for spoliation of evidence. The scope and content of this adverse inference will be addressed at the time of trial. The
Defendants' Motion in Limine to exclude the login tracking lists is denied.
This Memorandum Decision will stand as the Order of the Court. STEVENS-HENAGER COLLEGE V. EAGLE GATE COLLEGE PAGE 7 MEMORANDUM DECISION
MAILING CERTIFICATE
I hereby certify that I mailed a true and correct copy of the foregoing Memorandum Decision, to the following, this 7 ( day of
August, 2009:
Robert E. Mansfield David P. Williams Katherine Conyers Attorneys for Plaintiff 15 W. South Temple, Suite 1200 Salt Lake City, Utah 84111
Thomas R. Karrenberg Nathan B. Wilcox Jennifer R. Eshelman Attorneys for Defendants Eagle Gate College, Provo College, Horwitz and Miller 50 W. Broadway, Suite 700 Salt Lake City, Utah 84101-2006
Nathan B. Wilcox Attorney for Defendants 201 S. Main Street, Thirteenth Floor Salt Lake City, Utah 84111
Wallace Rogers 4376 South 2675 West Roy, Utah 84067
Mark N. Brian Attorney for Defendants Iongi and Smith P.O. Box 173 Spanish Fork, Utah 84660 rr TabD IN THE DISTRICT COURT OF THE THIRD JUDICIAL DISTRICT
IN AND FOR SALT LAKE COUNTY, STATfe OF UTAH
STEVENS-HENAGER COLLEGE, : MINUTE ENTRY
Plaintiff, : CASE NO. 040921860
vs. :
EAGLE GATE COLLEGE, PROVO COLLEGE, : MOSESE IONGI, TREVOR SMITH, WALLACE ROGERS, RICHARD HORWITZ, : STEVEN TODD KNECHT and JANA MILLER,
Defendants.
The Court has before it a request for decision filed by Defendants
Eagle Gate College, Provo College and Jana Miller seeking a ruling on their Motion to Strike Preliminary Expert Witness Report of Brad Townsend and the Affidavit of Brad Townsend. Based on the Court's prior rulings, including its recent ruling with respect to the Plaintiff's Motion for
Relief From or For Reconsideration of the Court's Order on Summary
Judgment, and on the grounds articulated in the Defendants' Motion to
Strike, the Court determines that this Motion is well-taken and therefore granted. STEVENS-HENAGER COLLEGE V. EAGLE GATE COLLEGE PAGE 2 MINUTE ENTRY
This Minute Entry decision will stand as the Order of the Court,
Dated this ^r^ day of May, 2008.
ROBERT P. FAU DISTRICT COURT
IMP STEVENS-HENAGER COLLEGE V. EAGLE GATE COLLEGE PAGE 3 MINUTE ENTRY
MAILING CERTIFICATE
I hereby certify that I mailed a true and correct copy of the
foregoing Minute Entry, to the following, this O^J day of May, 2008:
Robert E. Mansfield Scott M. Lilja Lisa B. Bohman Attorneys for Plaintiff 36 S. State Street, Suite 1900 Salt Lake City, Utah 84144
Thomas R. Karrenberg Nathan B. Wilcox Jennifer R. Eshelman Attorneys for Defendants Eagle Gate College, Provo College, Horwitz and Miller 50 W. Broadway, Suite 700 Salt Lake City, Utah 84101-2006
Wallace Rogers 4376 South 2675 West Roy, Utah 84067
Mark N. Brian Attorney for Defendants Iongi and Smith P.O. Box 173 Spanish Fork, Utah 84660 TabE c0p Robert E. Mansfield (6272) Scott M.Lilja (4231) Lisa B. Bohman (10733) VAN COTT BAGLEY CORNWALL & MCCARTHY 50 South Main Street, Suite 1600 Salt Lake City, Utah 84144 Telephone: (801)532-3333 Facsimile: (801) 534-0058
Attorneys for Plaintiff
IN THE THIRD JUDICIAL DISTRICT COURT OF SALT LAKE COUNTY STATE OF UTAH
STEVENS-HENAGER COLLEGE,
Plaintiff, PLAINTIFF'S RESPONSES TO JANA MILLER'S FIRST SET vs. OF INTERROGATORIES
BULLEN & WILSON, LLC, dba EAGLE GATE COLLEGE; CECELIA WILSON dba PROVO COLLEGE; MOSESE Case No. 040921860 IONGI; TREVOR SMITH; WALLACE ROGERS; RICHARD HORWITZ; Judge Faust STEVEN TODD KNECHT; JANA MILLER; and DOES 1 through 50;
Defendants.
Pursuant to Rule 33, Utah Rules of Civil Procedure, Stevens-Henager College ("SHC") responds to Jana Miller's First Set of Interrogatories to Plaintiff.
GENERAL OBJECTIONS
1. Plaintiff objects to these Interrogatories to the extent that they seek to impose any obligation upon Plaintiff beyond the obligations imposed by the Utah Rules of Civil Procedure.
2. Plaintiff objects to these Interrogatories to the extent that they seek privileged material. Plaintiff construes each Interrogatory not to seek any such objectionable information.
1 354552v2 3. Plaintiff objects to these Interrogatories to the extent that they require Plaintiff to detail all of its legal contentions and all supporting facts, on the grounds that such Interrogatories are premature at this stage of the litigation and would entail undue burden and expense for
Plaintiff while discovery progresses. Subject to this objection, Plaintiff will answer the
Interrogatories to which it is required to respond to the best of its ability, however, reserving the right to amend or supplement its answers, responses and objections after additional discovery has been conducted in this action.
4. Plaintiff objects to these Interrogatories to the extent they seek information or documents that are not relevant.
5. Plaintiff objects to these Interrogatories to the extent they are so vague, ambiguous, overly broad, unduly burdensome and/or incomprehensible so as to render it infeasible to respond in any reasonable manner or in any reasonable amount of time.
6. Plaintiff objects to these Interrogatories to the extent they seek material or information that is in Defendants' possession, or is publicly available, or is otherwise available to
Defendants.
7. Plaintiff objects to Defendants' interrogatories because they exceed the default limit provided by Rule 33 of the Utah Rules of Civil Procedure of no more than 25 questions, including discrete subparts. See Utah R. Civ. P. 33; Advisory Committee Note for Discovery
Rules Amendments for Rule 26; see also Nyfield v. Virgin Islands Telephone Corp., 200 F.R.D.
246 (D.D.I. 2001) (parties cannot evade the presumptive limitation of 25 interrogatories through the device of joining as "subparts" questions that seek information about discrete, separate subjects). In the court-approved Stipulated Discovery Plan, as modified, the parties agreed, as provided in Rule 33, that the maximum number of interrogatories by any party to the other is 25.
2 354552v.2 8. Plaintiff objects to Defendants' Interrogatories to the extent they request information that is impossible to verify or validate.
9. Subject to the foregoing objections and to the above Reservations of Rights, which are incorporated into each and every answer and response made by Plaintiff to
Defendants' discovery requests, the answers to Defendants' Interrogatories are based upon
Plaintiffs knowledge and review of the information collected during discovery to date. Plaintiff reserves the right to supplement its answers to Defendants5 Interrogatories if and when additional responsive, non-privileged information is obtained.
RESPONSES TO INTERROGATORIES
Subject to the General Objections set forth hereafter, Plaintiff hereby answers, responds and objects to the First Set of Interrogatories submitted by Defendant Jana Miller as follows:
INTERROGATORY NO. 1: If you claim in this matter that Jana Miller breached any provision of any contract between you and Mrs. Miller, identify the following:
a. Each and every contract that you allege Mrs. Miller has breached;
b. The precise provision(s) of any contract that you allege Mrs. Miller breached;
c. The precise manner in which you allege Mrs. Miller breached any contract with
you;
d. All individuals who you allege have knowledge supporting your allegation that
Mrs. Miller breached any contract with you, including a detailed and precise
statement of any such individuals knowledge regarding Mrs. Miller's alleged
breach;
e. All documents that you allege support any allegation by you that Mrs. Miller
breached any contract with you; and
3 354552v2 f. All damages that you purported suffered as a result of any alleged breach by Mrs.
Miller of any contract with you, including a detailed statement of the method of
the calculation of any alleged damages and any facts you relied upon in
computing any alleged damages.
RESPONSE: Subject to the objections stated above, which are incorporated herein, Jana
Miller ("Miller") signed an Employment Agreement with Stevens-Henager. The Employment
Agreement included confidentiality, non-solicitation and non-compete clauses. Miller subsequently terminated her employment with Stevens-Henager and began working for Eagle
Gate College in violation of her employment agreement. Plaintiff incorporates the Deposition testimony of Jana Miller, January 12, 2005, at pp. 24 - 36, in which Miller admits that she had an employment agreement, quit her job at Stevens-Henager, and began working for Eagle Gate.
Miller's Employment Agreement has previously been produced. Miller, Vicki Dewsnup, Ron
Moss, Jonathan Bullen, Larry Litchfield, Wally Rogers, and Todd Knecht have knowledge of
Miller's breachs, as well as the involvement of Eagle Gate and its employees. Plaintiffs experts will provide information and analysis concerning the damages suffered as a result of Miller's breach of her employment agreement.
INTERROGATORY NO. 2: If you claim that Mrs. Miller has misappropriated any trade secrets as defined in Utah Code Ann. § 13-24-1 et seq., then identify the following
a. Each and every trade secret you allege Mrs. Miller misappropriated;
b. The precise manner in which you allege Mrs. Miller misappropriated any alleged
trade secret;
c. All individuals who you allege have knowledge supporting your allegation that
Mrs. Miller misappropriated any alleged trade secret, including a detailed and
4 354552v.2 precise statement of any such individuals knowledge regarding any alleged trade
secret or alleged misappropriation thereof;
d. All documents that you allege support any allegation Mrs. Miller misappropriated
any purported trade secret; and
e. All damages that you purportedly suffered as a result of any misappropriation by
Mrs. Miller of any alleged trade secret, including a detailed statement of the
method of the calculation of any alleged damages and any facts you relied upon in
computing any alleged damages.
RESPONSE: Subject to the objections stated above, which are incorporated herein,
Stevens-Henager's Lead List constitutes a trade secret. Miller misappropriated trade secrets
when she accessed Stevens-Henager's Lead List without authorization while working for Eagle
Gate College and placed names from the Stevens-Henager list onto Defendants' Lead List.
Persons with knowledge of Miller's unauthorized access of Plaintiff s Lead List include Miller,
Ron Moss, Ibrahim Zulich, and Vicki Dewsnup. See generally Deposition of Ron Moss, Ibrahim
Zulich, and Vicki Dewsnup. Responsive documents, including the Login Tracking Lists showing Miller's unauthorized access of Stevens-Henager's Lead List, have previously been produced. Plaintiffs experts will provide information and analysis concerning the damages
suffered as a result of Miller's misappropriation of the Lead List.
INTERROGATORY NO. 3: Identify each and every purported secret or
confidential business method, technique, information or material, including but not limited to,
any lists, that you claim constitutes a "trade secret" and which you claim were misappropriated by Mrs. Miller.
5 354552v2 Stevens-Henager's Lead List constitutes a trade secret. Miller misappropriated trade secrets when she accessed Stevens-Henager's Lead List without authorization while working for Eagle Gate College and transferred names from the Stevens-Henager Lead List to Eagle Gate College's Lead List. INTERROGATORY NO. 4: If you claim that Mrs. Miller intentionally interfered with existing or potential contractual, business or economic relations, identify the following: a. All contractual, business or economic relationships with which you claim Mrs. Miller interfered; b. The precise manner in which you allege Mrs. Miller interfered with any contractual, business or economic relationships; c. The precise means that Mrs. Miller purported used to recruit your admissions consultants which you claim to be improper, and the reason, if any, you claim those means were improper; d. The improper purpose that you allege was the motivation for Mr. Howitz's alleged interference with your existing or potential contractual, business or economic relations; e. All individuals who have knowledge supporting your allegation that Mrs. Miller has intentionally interfered with any contractual, business or economic relations, including a detailed statement of any such individuals knowledge; f. All documents that support any allegation by you that Mrs. Miller has intentionally interfered with any contractual, business, or economic relations; 6 354552v2 loll g. All damages that you claim to have suffered as a result of any alleged interference by Mrs. Miller with any contractual, business, or economic relations, including a detailed statement of the method of the calculation of any such damages and any facts relied upon in computing any alleged damages, RESPONSE: Subject to the objections stated above, which are incorporated herein, Miller interfered with employees who had employment agreements with Stevens-Henager. Miller also interfered with prospective students who had potential contractual, business, and economic relations with Stevens-Henager. Miller recruited Wally Rogers and Todd Knecht, Stevens-Henager employees who had employment agreements, and induced them to leave their positions to work for Eagle Gate. Plaintiff incorporates the Deposition of Jason Abercrombie at p. 90 and the Deposition of James Carr at p. 97 by reference. Miller interfered with potential contracts with prospective students when she accessed the Stevens-Henager database containing its confidential lead list and transferred names from the Stevens-Henager Lead List to Defendants' Lead List as evidenced by the fact that approximately 5,000 names from the 2004 Stevens-Henager Lead List also appear on Defendants' 2004 Lead List. Miller, Vicki Dewsnup, Ron Moss, Jonathan Bullen, Larry Litchfield, Wally Rogers, Todd Knecht, and Ibrahim Zulich have knowledge of Miller's interference with potential contracts. Responsive documents, including the Employment Agreements, the Login Tracking Lists showing Miller's unauthorized access of the Stevens-Henager's database, and Stevens-Henager's Lead List have previously been produced. Plaintiffs experts will provide information and analysis concerning the damages suffered as a result of Miller's interference with contractual relations and potential contractual relations. 7 354552v2 INTERROGATORY NO. 5: If you claim that Mrs. Miller violated the Federal Computer Fraud and Abuse Act ("CFAA"), identify the following: a. Each section of the CFAA that allege Mrs. Miller violated; b. The precise manner in which you allege Mrs. Miller violated each provision of the CFAA that you allege she violated; c. Each occasion that you allege Mrs. Miller accessed your database, intentionally or otherwise, including, but not limited to, each occasion that you allege that Mrs. Miller accessed your database and altered or obliterated any contact information contained thereon, obtained any information of a value exceeding $5,000, or otherwise caused damages to you; d. Each occasion that you allege that Mrs. Miller knowingly caused the transmission of a program, information, code, or command to intentionally cause damage to your database; e. All individuals who have knowledge supporting your allegation that Mrs. Miller violated any provision of the CFAA, including a detailed statement of any such individual's knowledge; f. All documents that support any allegation by you that Mrs. Miller violated any provision of the CFAA; and g. All damages that you claim to have suffered as a result of any alleged violation by Mrs. Miller of the CFAA, including a detailed statement of the method of the calculation of any such damages and any facts relied upon in computing any alleged damages. 8 354552v 2 RESPONSE: Subject to the objections stated above, which are incorporated herein, Miller violated §1030 of the CFAA when she accessed the Stevens-Henager database containing its confidential lead list without authorization. Miller accessed the database and Lead List, which is valued in excess of $5,000.00, in a manner that was unauthorized or which exceeded her authorization on February 11, 2004; FEB 20? March 9, 2004; March 27, 2004; and April 6, 2004. Miller, Vicki Dewsnup, Ron Moss, Jonathan Bullen, Larry Litchfield, Wally Rogers, and Todd Rnecht have knowledge supporting Miller's violation of the CFAA. See Dep. of Ron Moss, Ibrahim Zulich and Vicki Dewsnup respectively. Responsive documents, including Login Tracking Lists showing Miller's unauthorized access, have previously been produced. Plaintiffs experts will provide information and analysis concerning the damages suffered as a result of Miller's violation of the CFAA. INTERROGATORY NO. 6: If you claim that Mrs. Miller violated the Utah Unfair Competition Act ("UCA"), identify the following: a. Each section of the UCA that allege Mrs. Miller violated; b. The precise manner in which you allege Mrs. Miller violated each provision of the UCA that you allege she violated; c. Each occasion that you allege Mrs. Miller participated or assisted in Eagle Gate College or Provo College's purported predatory hiring practices; d. Each occasion that you allege that Mrs. Miller engaged in cyber-terrorism as defined in the Utah Code Ann. § 13-5a-102(2), including, but not limited to, each act by Mrs. Miller that you allege constituted cyber-terrorism; 9 354552v2 e. All individuals who have knowledge supporting your allegation that Mrs. Miller violated any provision of the UCA, including a detailed statement of any such individual's knowledge; f All documents that support any allegation by you that Mrs. Miller violated any provision of the UCA; and g. All damages that you claim to have suffered as a result of any alleged violation by Mrs. Miller of the UCA, including a detailed statement of the method of the calculation of any such damages and any facts relied upon in computing any alleged damages. RESPONSE: Subject to the objections stated above, which are incorporated herein, Miller violated the Utah Unfair Competition Act by engaging in cyber-terrorism and predatory hiring practices as defined in U.C.A. § 13-5a-102 through her unauthorized access of the Stevens-Henager Lead List and her recruiting of Stevens-Henager employees Todd Knecht and Wally Rogers, who had employment agreements with Stevens-Henager. Miller participated in and assisted Eagle Gate or Provo College in their predatory hiring practices each time she contacted Stevens-Henagers employee regarding potential employment at Eagle Gate College and each time she induced or encouraged Stevens-Henager employees to leave their positions at Stevens-Henager to work at Eagle Gate. Miller engaged in acts of cyber-terrorism on February 11, 2004; March 9, 2004; March 27, 2004; and April 6, 2004 when she accessed the Stevens- Henager without authorization after she left Stevens-Henager employment and when she exceeded her authorized access. Miller, Vicki Dewsnup, Ron Moss, Jonathan Bullen, Larry Litchfield, Wally Rogers, and Todd Knecht has knowledge of Miller's violations of the Utah Unfair Competition Act. Responsive documents, including employment agreements and Login 10 354552v.2 Tracking Lists, have previously been produced. Plaintiffs experts will provide information and analysis concerning the damages suffered as a result of Miller's violation of the Utah Unfair Competition Act. INTERROGATORY NO. 7: Identify all facts supporting your allegation that Mrs. Miller at any time conspired to induce breach of any contracts, including her own, to interfere with your purported existing or prospective contractual or economic relations, or to violate the Utah Trade Secrets Act, the CFAA, or the UCA. RESPONSE: Subject to the objections stated above, which are incorporated herein, Miller breached her own employment agreement with Stevens-Henager that included a non compete clause by ending her employment with Stevens-Henager and accepting employment with Eagle Gate in violation of her employment agreement. Once employed by Eagle Gate, Miller then induced Wally Rogers, Richard Horowitz and Todd Knecht, who also had employment agreements with Stevens-Henager, to breach their employment agreements by leaving Stevens-Henager and working for Eagle Gate. Miller accessed the Stevens-Henager Lead List on February 11, 2004; March 9, 2004; March 27, 2004; and April 6, 2004 with the intent of transferring student information from the Stevens-Henager Lead List to Defendants5 Lead List, which interfered with the prospective contractual or economic relations between Stevens-Henager and prospective students and which violated the Utah Trade Secrets Act, the CFAA, and the UCA INTERROGATORY NO. 8: State with specificity each and every damage you purportedly have incurred as a result of Jana Miller's use of your alead list" or any other trade secret as alleged in paragraph 80 of your Complaint. 11 354552v2 RESPONSE: Subject to the objections stated above, which are incorporated herein, Plaintiffs experts will provide information and analysis concerning the damages suffered as a result of Miller's use of Stevens-Henager's Lead List. INTERROGATORY NO. 9: Identify the basis for your allegation that Jana Miller "disclosed or used, and will continue to disclose or use, Stevens-Henager's ulead lists" (or the information contained therein) and other trade secrets without Stevens-Henager's express or implied consent" as alleged in paragraph 79 of your Complaint. RESPONSE: Subject to the objections stated above, which are incorporated herein, Miller accessed Plaintiffs Lead List, extracted names from the Lead List, and placed the names of students on Defendants' Lead List, which names continue to reside on Defendants' Lead List. Plaintiff has never consented to such disclosure or use of its Lead List. See also Responses to Interrogatories No. 2, 4, 6 and 7 above DATED this 7th day of May, 2007. VAN COTTJBAGLEY, CORNWALL & MCCARTHY Robert"]^ Mansfield Scott M. Lilja Lisa B. Bohman Counsel for Plaintiff 12 354552v2 TabF Robert E. Mansfield (6272) COp Scott M.Lilja (4231) Lisa B.Bohman (10733) VAN COTT BAGLEY CORNWALL & MCCARTHY 50 South Main Street, Suite 1600 Salt Lake City, Utah 84144 Telephone: (801) 532-3333 Facsimile: (801) 534-0058 Attorneys for Plaintiff IN THE THIRD JUDICIAL DISTRICT COURT OF SALT LAKE COUNTY STATE OF UTAH STEVENS-HENAGER COLLEGE, Plaintiff, PLAINTIFF'S RESPONSES TO EAGLE GATE COLLEGE AND vs. PROVO COLLEGE'S FIRST SET OF INTERROGATORIES BULLEN & WILSON, LLC, dba EAGLE GATE COLLEGE; CECELIA WILSON dba PROVO COLLEGE; MOSESE IONGI; TREVOR SMITH; WALLACE ROGERS; RICHARD HORWITZ; Case No. 040921860 STEVEN TODD KNECHT; JANA MILLER, Judge Faust Defendants. Pursuant to Rule 33, Utah Rules of Civil Procedure, Stevens-Henager College ("SHC") responds to Eagle Gate College and Provo College's First Set of Interrogatories to Plaintiff. GENERAL OBJECTIONS 1. Plaintiff objects to these Interrogatories to the extent that they seek to impose any obligation upon Plaintiff beyond the obligations imposed by the Utah Rules of Civil Procedure. 2. Plaintiff objects to these Interrogatories to the extent that they seek privileged material. Plaintiff construes each Interrogatory not to seek any such objectionable information. 1 354557v 1 3. Plaintiff objects to these Interrogatories to the extent that they require Plaintiff to detail all of its legal contentions and all supporting facts, on the grounds that such Interrogatories are premature at this stage of the litigation and would entail undue burden and expense for Plaintiff while discovery progresses. Subject to this objection, Plaintiff will answer the Interrogatories to which it is required to respond to the best of its ability, however, reserving the right to amend or supplement its answers, responses and objections after additional discovery has been conducted in this action. 4. Plaintiff objects to these Interrogatories to the extent they seek information or documents that are not relevant. 5. Plaintiff objects to these Interrogatories to the extent they are so vague, ambiguous, overly broad, unduly burdensome and/or incomprehensible so as to render it infeasible to respond in any reasonable manner or in any reasonable amount of time. 6. Plaintiff objects to these Interrogatories to the extent they seek material or information that is in Defendants' possession, or is publicly available, or is otherwise available to Defendants. 7. Plaintiff objects to Defendants' interrogatories because they exceed the default limit provided by Rule 33 of the Utah Rules of Civil Procedure of no more than 25 questions, including discrete subparts. See Utah R. Civ. P. 33; Advisory Committee Note for Discovery Rules Amendments for Rule 26; see also Nyfield v. Virgin Islands Telephone Corp., 200 F.R.D. 246 (D.D.I. 2001) (parties cannot evade the presumptive limitation of 25 interrogatories through the device of joining as "subparts" questions that seek information about discrete, separate subjects). In the court-approved Stipulated Discovery Plan, as modified, the parties agreed, as provided in Rule 33, that the maximum number of interrogatories by any party to the other is 25. 2 354557v 1 8. Plaintiff objects to Defendants' Interrogatories to the extent they request information that is impossible to verify or validate. 9. Subject to the foregoing objections and to the above Reservations of Rights, which are incorporated into each and every answer and response made by Plaintiff to Defendants5 discovery requests, the answers to Defendants' Interrogatories are based upon Plaintiffs knowledge and review of the information collected during discovery to date. Plaintiff reserves the right to supplement its answers to Defendants' Interrogatories if and when additional responsive, non-privileged information is obtained. RESPONSES TO INTERROGATORIES Subject to the General Objections set forth hereafter, Plaintiff hereby answers, responds and objects to the First Set of Interrogatories submitted by Defendants Eagle Gate and Provo College as follows: INTERROGATORY NO. 1: Identify with specificity each and every fact that supports, refers or relates to, or evidences your claim that Eagle Gate College or Provo College was engaged in any predatory hiring practice and for each specific fact the following: a. each and every individual who has any knowledge about the fact including specific statement of their purposed knowledge; b. each and every document that refers or relates to or evidences the fact, including the custodian of the documents, the author, and all recipients of the document; c. the date of which you became aware of each fact ajid the precise method by which you became aware of the fact; and 3 354557v 1 d. each and every communication that relates or refers in any way to the fact and all documents that relate or refer to or evidence any such communication, and the identities of each party to the communication. e. All damages that you purportedly suffered as a result of any alleged predatory hiring practice on the part of Eagle Gate College or Provo College, including a detailed statement of the method of the calculation of any alleged damages and any facts you relied upon in computing any alleged damages. RESPONSE: Subject to the objections stated above, v/hich are incorporated herein, Plaintiffs predatory hiring claim is based on Defendants' systematic targeting and hiring of Stevens-Henager employees. The following employees, the majority of whom had employment contracts with Stevens-Henager that included non-compete clauses, left their employment with Stevens-Henager and began working for Defendants: Jana Miller, Richard Horwitz, Wally Rogers, Todd Knecht, Tecia Orton Brinkerhoff, Rebecca Thomas Starks, Moses Iongi, and Trevor Smith. Responsive documents, including the employment agreements, have been previously produced. In addition to Defendants' employees, Vicki Dewsnup, Ron Moss, and Carol Gastiger have knowledge about Defendants' predatory hiring practices. Plaintiffs experts will provide information and analysis concerning the damages suffered as a result of Defendants' predatory hiring practices. INTERROGATORY NO. 2: Identify with specificity each and every fact that supports, refers or relates to, or evidences any purported acts of cyber terrorism as defined in Utah Code Ann. § 13-5(a)-102(2) on the part of any of the Defendants in this action and for each such specific fact, identify the following: 4 354557v I *Ktt a. each and every individual who has any knowledge about the fact, including the specific statement of their purported knowledge; b. each and every document that refers or relates to or evidences the fact, including the custodian of the documents, the author, and all recipients of the document; c. the date of which you became aware of each fact and the precise method by which you became aware of the fact; and d. each and every communication that relates or refers in any way to the fact and all documents that relate or refer to or evidence any such communication, and the identities of each party to the communication. e. All damages that you purportedly suffered as a result of any alleged predatory hiring practice on the part of Eagle Gate College or Provo College, including a detailed statement of the method of the calculation of any alleged damages and any facts you relied upon in computing any alleged damages. RESPONSE: Subject to the objections stated above, which are incorporated herein, Plaintiffs claims under Utah Code Ann. § 13-5(a)-102 are based on Defendants' unauthorized access of the Stevens-Henager database, including its Lead List, as well as Defendants' alteration of Plaintiff s Lead List. Jana Miller (JAMiller) accessed the Stevens-Henager database without authorization or in a manner that exceeded her authorization on February 11, 2004; March 9, 2004; March 27, 2004; and April 6, 2004 from a computer with an IP address of 192.168.248.100. See SHC000191 - SHC000209. Wally Rogers (WRogers) accessed the Stevens-Henager database on May 26, 2004 from an Eagle Gate College computer with an IP address of 205.127.92.4. See SHC000273. 5 354557v.l Todd Knecht (TOKnecht) accessed the Stevens-Henager database on March 23 2004, March 26, 2004, April 6, 2004, April 23, 2004, May 17, 2004, May 26, 2004 without authorization from an Eagle Gate College computer with an IP address of 205.127.92.20 or 205.127 92.4. See SHC000214, 215, 219, 222, 223, 236, 259. The IP addresses for the network at Eagle Gate College are 205.127.92.1 - 254. Someone used Carol Gastiger's user name (CAGastiger) to access the database on February 26, 2004 and March 3, 2004 from a Provo College computer with an IP Address of 204.113.66.3. SeeSHC001217. Tecia Orton (TOrton) accessed the Stevens-Henager database without authorization on March 1, 2004 from a Provo College computer with an IP Address of 204.113.66.3. The IP addresses for the network at Provo College are 204.113.66.1-254. See SHC001146. In addition to their unauthorized access of Plaintiff s database containing its Lead List, Defendants also altered the student information on Plaintiffs Lead List. Miller, Rogers, Knecht, Orton, Vicki Dewsnup, Ron Moss, and Ibrahim Zulich have knowledge of Defendants' acts of cyber terrorism as defined in Utah Code Ann. § 13-5(a)- 102(2). Responsive documents have previously been identified and produced. Because of the predatory hiring practices, Stevens-Henager was forced to hire and train a large proportion of new staff, which led directly to a decrease in productivity, an increase in training costs, and a decrease in the number of entering students. Plaintiffs experts will provide information and analysis concerning the damages suffered as a result of Defendants' acts of cyber terrorism. 6 354557v I -za claim to be cyber terrorism as defined in Utah Code Ann. § 13-5(a)-I02(2) on the part Eagle Gate College. RESPONSE: Subject to the objections stated above, which are incorporated herein, Jana Miller (JAMiller) accessed the Stevens-Henager database without authorization or in a manner that exceeded her authorization on February 11, 2004; March 9, 2004; March 27, 2004; and April 6, 2004 from a computer with an IP address of 192.168.248.100. See SHC000191 - SHC000209. Wally Rogers (WRogers) accessed the Stevens-Henager database on May 26, 2004 from an Eagle Gate College computer with an IP address of 205.127.92.4. See SHC000273. Todd Knecht (TOKnecht) accessed the Stevens-Henager database on March 23 2004, March 26, 2004, April 6, 2004, April 23, 2004, May 17, 2004, May 26, 2004 without authorization from an Eagle Gate College computer with an IP address of 205.127.92.20 or 205.127.92.4. See SHC000214, 215, 219, 222, 223, 236, 259. In addition to the unauthorized access, Defendants downloaded, altered and damaged Plaintiffs Lead List. INTERROGATORY NO. 4: Identify with specificity each and every act that you claim to be cyber-terrorism as defined in Utah Code Ann. § 13-5(a)-102(2) on the part of Provo College. RESPONSE: Subject to the objections stated above, which are incorporated herein, Tecia Orton (TOrton) accessed the Stevens-Henager database without authorization on March 1, 2004 from a Provo College computer with an IP Address of 204.113.66.3. Someone from Provo College, believed to be Tecia Orton, used Carol Gastiger's user name (CAGastiger) to access the database on February 26, 2004 and March 3, 2004 from a Provo College computer with an IP 7 354557v. I Address of 204.113.66.3. See SHC001217. The IP addresses for the network at Provo College are 204.113.66.1-254. See SHC001146. INTERROGATORY NO. 5: Identify with specificity each and every act that you claim to be cyber-terrorism as defined in Utah Code Ann. § 13-5(a)-102(2) on the part of Richard Horwitz. RESPONSE: Subject to the objections stated above, which are incorporated herein, after extensive discovery, Plaintiff no longer maintains that Richard Horwitz engaged in any act of cyber-terrorism. INTERROGATORY NO. 6: Identify with specificity each and every act that you claim to be cyber-terrorism as defined in Utah Code Ann. § 13-5(a)-102(2) on the part of Jana Miller. RESPONSE: Subject to the objections stated above, which are incorporated herein, Miller accessed the Stevens-Henager database without authorization or in a manner that exceeded her authorization on February 11, 2004, March 9, 2004, March 27, 2004, and April 6, 2004. INTERROGATORY NO. 7: Identify each and every unauthorized act as to any of your computers, computer databases, networks, or electronic or magnetic storage or backups of data or information that occurred between January 1, 1998, and the present, and for each such unauthorized access, identify the following: a. the precise date on which the alleged unauthorized access occurred; b. the individual(s) who purportedly engaged in the unauthorized access, or that you suspect to have engaged in the unauthorized access, including the basis for your claim that the individual(s) engaged in the unauthorized access; 8 c. all user names, including all passwords for each such user, that you claim were used for the unauthorized access; d. if you claim that any unauthorized access was encouraged or solicited by someone other than the individual who engaged the unauthorized access, identify each and every fact that support such allegation in the individual(s) that allegedly encouraged or solicited the unauthorized access; e. each and every internet provider address used in any unauthorized access and, if you believe that the individual(s) engaged in the unauthorized access are spoofing their internet provider address, state the basis for your belief that the internet provider address is a spoof; f. each and every document the refers or relates to, evidences, or documents that had unauthorized access; and g. each and every individual who has any knowledge about the unauthorized access including specific statement of their purported knowledge. h. All damages that you purportedly suffered as a result of any alleged unauthorized access, including a detailed statement of the method of the calculation of any alleged damages and any facts you relied upon in computing any alleged damages. RESPONSE: Subject to the objections stated above, which are incorporated herein, Jana Miller (JAMiller) accessed the Stevens-Henager database without authorization or in a manner that exceeded her authorization on February 11, 2004; March 9, 2004; March 27, 2004; and April 6, 2004 from a computer with an IP address of 192.168.248.100. S^e SHC000191 - SHC000209. 9 334557v 1 Wally Rogers (WRogers) accessed the Stevens-Henager database on May 26, 2004 from an Eagle Gate College computer with an IP address of 205.127.92.4. See SHC000273. Todd Knecht (TOKnecht) accessed the Stevens-Henager database on March 23 2004, March 26, 2004, April 6, 2004, April 23, 2004, May 17, 2004, May 26, 2004 without authorization from an Eagle Gate College computer with an LP address of 205.127.92.20 or 205.127.92.4. See SHC000214, 215, 219, 222, 223, 236, 259. The IP addresses for the network at Eagle Gate College is 205.127.92.1 - 254. Someone used Carol Gastiger's user name (CAGastiger) to access the database on February 26, 2004 and March 3, 2004 from a Provo College computer with an IP Address of 204.113.66.3. SeeSHC001217. Tecia Orton (TOrton) accessed the Stevens-Henager database without authorization on March 1, 2004 from a Provo College computer with an IP Address of 204.113.66.3. The IP addresses for the network at Provo College ctre: 204.113.66.1-254. See SHC001146. In addition to their unauthorized access of Plaintiffs database containing its Lead List, Defendants also downloaded and altered the student information on the Lead List. Miller, Rogers, Knecht, Orton, Vicki Dewsnup, Ron Moss, and Ibrahim Zulich have knowledge of Defendants' acts of cyber terrorism as defined in Utah Code Ann. § 13-5(a)- 102(2). Responsive documents have previously been identified and produced. Defendants' acts of cyber terrorism have caused damage to Plaintiffs ongoing retention and recruiting of students and have damaged the value of plaintiff as a business. Plaintiffs experts will provide information and analysis concerning the damages suffered as a result of Defendants' acts of cyber terrorism. 10 354557v I Defendants' passwords were confidential. As a result, Plaintiff cannot provide the passwords for the individuals who accessed its database without authorization. INTERROGATORY NO. 8: Identify with specificity each and every fact that supports, refers or relates to, or evidences, your claim that Eagle Gate College or Provo College engaged in any action in violation of the Uniform Trade Secrets Act and for each such fact, identify the following: a. each and every individual who has any knowledge about he fact including specific statement of their purported knowledge; b. each and every document that refers or relates to or evidences the fact, including the custodian of the documents, the author, and all recipients of the document; c. the date of which you became aware of each fact and the precise method by which you became aware of the fact; and d. each and every communication that relates or refers in any way to the fact and all documents that relate or refer to or evidence any such communication, and the identifies of each party to the communication. e. All damages that you purportedly suffered as a result of any alleged violation of the Uniform Trade Secrets Act by Eagle Gate College or Provo College, including a detailed statement of the method of the calculation of any alleged damages and any facts you relied upon in co putting any alleged damages; RESPONSE: Subject to the objections stated above, which are incorporated herein, Jana Miller (JAMiller) accessed the Stevens-Henager database without authorization or in a manner that exceeded her authorization on February 11, 2004; March 9, 2004; March 27, 2004; 11 354557v 1 and April 6, 2004 from a computer with an IP address of 192.168.248.100. See SHC000191 - SHC000209. Wally Rogers (WRogers) accessed the Stevens-Henager database on May 26, 2004 from an Eagle Gate College computer with an IP address of 205.127.92.4. See SHC000273. Todd Knecht (TOKnecht) accessed the Stevens-Henager database on March 23 2004, March 26, 2004, April 6, 2004, April 23, 2004, May 17, 2004, May 26, 2004 without authorization from an Eagle Gate College computer with an IP address of 205.127.92.20 or 205.127.92.4. See SHC000214, 215, 219, 222, 223, 236, 259. The IP addresses for the network at Eagle Gate College is 205.127.92.1 - 254. Someone used Carol Gastigef s user name (CAGastiger) to access the database on February 26, 2004 and March 3, 2004 from a Provo College computer with an IP Address of 204.113.66.3. SeeSHC001217. Tecia Orton (TOrton) accessed the Stevens-Henager database without authorization on March 1, 2004 from a Provo College computer with an IP Address of 204.113.66.3. The IP addresses for the network at Provo College are: 204.113.66.1-254. See SHC001146. In addition to their unauthorized access of Plaintiffs database containing its Lead List, Defendants also downloaded and altered the student information on the Lead List. Miller, Rogers, Knecht, Orton, Vicki Dewsnup, Ron Moss, and Ibrahim Zulich have knowledge of Defendants' acts of cyber terrorism as defined in Utah Code Ann. § 13-5(a)- 102(2). Responsive documents have previously been identified and produced. Defendants' violations of the Trade Secrets Act have caused damage to Plaintiffs ongoing retention and recruiting of students and have damaged the value of plaintiff as a business. Plaintiffs experts 12 354557v 1 will provide information and analysis concerning the damages suffered as a result of Defendants5 Defendants' violations of the Trade Secrets Act INTERROGATORY NO. 9: Identify with specificity each and every fact that supports, refers or relates to, or your claim that Eagle Gate College or Provo College interfered with any reported contractual relations as alleged in your Complaint and for each specific fact, identify the following: a. each and every individual who has any knowledge about the fact including specific statement of their purported knowledge; b. each and every document that refers or relates to or evidences the fact, including the custodian of the documents, the author, and all recipients of the document; c. the date of which you became aware of each fact and the precise method by which you became aware of the fact; d. each and every communication that relates or refers in any way to the fact and all documents that relate or refer to or evidence any such communication, and the identities of each party to the communication; e. each and every act that you claim was engaged in by Eagle Gate College or Provo College that interfered with any contractual relations; f. each and every contractual relation that you claim was interfered by Eagle Gate College or Provo College; g. each and every contractual relation that you claim was breached as a result of any purported interference by Eagle Gate College or Provo College; h. with respect to each purported breach, the specific facts that you claim constituted a breach; 13 354557v.l i. each and every fact that you claim supports an allegation that Eagle Gate College or Provo College in any way caused, encouraged, or induced, the breach; and j. all damages that you purportedly suffered as a result of any alleged interference with reported contractual relations on the part of Eagle Gate College or Provo College, including a detailed statement of the method of the calculation of any alleged damages and any facts you relied upon in computing any alleged damages. RESPONSE: Subject to the objections stated above, which are incorporated herein, see Responses to Interrogatories Nos. land 8 above and 10 below. INTERROGATORY NO. 10: Identify with specificity each and every fact that supports, refers or relates, or evidences your claim that Eagle Gate College or Provo College interfered with any reported prospective economic relations as alleged in your Complaint and for each specific fact, identify the following: a. each and every individual who has any knowledge about he fact including specific statement of their purported knowledge; b* each and every document that refers or relates to or evidences the fact, including the custodian of the documents, the author, and all recipients of the document; c. the date of which you became aware of each fact and the precise method by which you became aware of the fact; d. each and every communication that relates or refers in any way to the fact and all documents that relate or refer to or evidence any such communication, and the identities of each party to the communication; 14 354557v 1 ^XML e. each and every act that you claim was engaged in by Eagle Gate College or Provo College that interfered with any prospective economic relations; f. each and every prospective economic relations that you claim was interfered by Eagle Gate College or Provo College; g. each and every prospective economic relations that you claim was beached as a result of any purported interference by Eagle Gate College or Provo College; h. with respect to each purported breach, the specific facts that you claim constituted a breach; i. each and every fact that you claim supports an allegation that Eagle Gate College or Provo College in any way caused, encouraged, or induced, the breach; and j. all damages that you purportedly suffered as a result of any alleged interference with reported prospective contractual relations on the part of Eagle Gate College or Provo College, including a detailed statement of the method of the calculation of any alleged damages and any facts you relied upon in computing any alleged damages. RESPONSE: Subject to the objections stated above, which are incorporated herein, Defendants altered student contact information on Plaintiffs Lead List, making it difficult or impossible to contact potential students. Defendants transferred names and information from Plaintiffs Lead List to Defendants' Lead List, resulting in the duplication of over 5,000 student names. Defendants also interfered with Stevens-Henager's ability to lease downtown space and with Plaintiffs creation of a Polynesian program by usurping those opportunities. Plaintiffs experts will provide information and analysis concerning the damages suffered as a result of 15 354557v.l Defendants5 interference with reported prospective contractual relations on the part of Defendants. INTERROGATORY NO. 11: Identify with specificity each and every fact that supports, refers or relates to, or evidences your claim that Eagle Gate College or Provo College engaged in any action in violation of the Federal Computer Fraud and Abuse Act (18 U.S.C. § 1030), and for each such fact, identify the following: a. each and every individual who has any knowledge about the fact including specific statement of their purported knowledge; b. each and every document that refers or relates to or evidences the fact, including the custodian of the documents, the author, and all recipients of the document; c. the date of which you became aware of each fact and the precise method by which you became aware of the fact; and d. each and every communication that relates or refers in any way to the fact and all documents that relate or refer to or evidence any such communication, and the identities of each party to the communication; e. each and every fact that supports your allegation in your Complaint that any of the Defendants in this matter accessed your database with the intent to defraud; f. each and every fact that supports your allegation that Miller, Eagle Gate College, or Provo College obtained any information of value exceeding $5,000; and g. each and every fact that supports your allegation that Miller, Eagle Gate College, or Provo College not only caused a transmission that intentionally caused damage to your database m an amount in excess of $5,000. 16 354557v I one RESPONSE: Subject to the objections stated above, which are incorporated herein, see Responses to Interrogatories Nos. 2-8 above. INTERROGATORY NO. 12: Identify with specificity each and every fact that supports, refers or relates to, or evidences your claim that Eagle Gate College or Provo College engaged in a civil conspiracy to drive you out of business or cripple your business, and for each such fact, identify the following: a. each and every individual who has any knowledge about the fact including specific statement of their purported knowledge; b. each and every document that refers or relates to or evidences the fact, including the custodian of the documents, the author, and all recipients of the document; c. the date of which you became aware of each fact and the precise method by which you became aware of the fact; and d. each and every communication that relates or refers in any way to the fact and all documents that relate or refer to or evidence any such communication, and the identities of each party to the communication. e. all damages that you purportedly suffered as a result of any alleged engagement in a civil conspiracy on the part of Eagle Gate College or Provo College, including a detailed statement of the method of the calculation of any alleged damages and any facts you relied upon in computing any alleged damages. RESPONSE: Subject to the objections stated above, which are incorporated herein, Defendants conspired to damage Plaintiff through the following: by targeting its employees and inducing them to leave Stevens-Henager; by accessing Plaintiffs Lead List and transferring names to Defendants5 Lead List; by altering and damaging Plaintiffs Lead List; and by ensuring 17 354557v.I that Plaintiffs could not occupy leased space. Defendants stated their intent to put Plaintiff out of business. The Deposition of James Carr at p. 101 - 103 and the deposition of Jason Abercrombie at p. 30 are incorporated by reference. Defendants, Ron Moss, Vicki Dewsnup, Carol Gastiger, Carl Barney, Jason Abercrombie, and Jason Carr have knowledge of Defendants' conspiracy. Plaintiffs experts will provide information and analysis concerning the damages suffered as a result of Defendants' civil conspiracy. INTERROGATORY NO. 13: Identify and state the factual basis for your allegation in paragraph 40 of your Complaint that Iongi and Smith both began working at Eagle Gate College and began efforts to recruit away from Stevens-Henager the very prospects that Stevens-Henager had paid them to pursue. RESPONSE: Subject to the objections stated above, which are incorporated herein, Statements made to Ron Moss by Pakineti Ngatuvai and Tonga Tuha, which statements are contained in documents previously produced to Defendants. In addition, Plaintiff incorporates the deposition testimony of Jonathan Bullen by reference in which he states that "they were soliciting students in our behalf, in our name . . ." Deposition of Jonathan Bullen, March 4, 2005, at p. 19,1. 12-18. INTERROGATORY NO. 14: State with specificity each and every damage you purportedly have incurred as a result of Eagle Gate College's use of your "lead list" or any other trade secret as alleged in paragraph 80 of your Complaint. RESPONSE: Subject to the objections stated above, which are incorporated herein, Plaintiffs experts will provide information and analysis concerning the damages suffered as a result of Eagle Gate College's use of Plaintiff s Lead List. 18 354557v.l INTERROGATORY NO. 15: State with specificity each and every damage you purportedly have incurred as a result of Provo College's use of your "lead list" or any other trade secret as alleged in paragraph 80 of your Complaint. RESPONSE: Subject to the objections stated above, which are incorporated herein, . Plaintiffs experts will provide information and analysis concerning the damages suffered as a result of Provo College's use of Plaintiff s Lead List. INTERROGATORY NO. 16: Identify the basis for your allegation that Provo College has "disclosed or used, and will continue to disclose or use, Stevens-Henager's 'lead lists' (or the information contained therein) and other trade secrets without Steven-Henager's express or implied consent" as alleged in paragraph 79 of your Complaint. RESPONSE: Subject to the objections stated above, which are incorporated herein, see Responses to Interrogatories No. 2-8 above. In addition, Defendants copied names from Stevens-Henager's Lead List to Defendants' Lead List as evidenced by the fact that Defendants' 2004 Lead List contains 5,000 names that are on Plaintiffs 2004 Lead List that were used to contact prospective students. INTERROGATORY NO. 17: Identify the basis for your allegation that Eagle Gate College has "disclosed or used, and will continue to disclose or use, Stevens-Henager's "lead lists" (or the information contained therein) and other trade secrets without Steven-Henager's express or implied consent" as alleged in paragraph 79 of your Complaint. 19 354557v I RESPONSE: Subject to the objections stated above, which are incorporated herein, see Response to Interrogatory No. 16 above. DATED this J_ day of May, 2007. 20 354557v 1 'Znfi rab& IN THE DISTRICT COURT OF THE THIRD JUDICIAL DISTRICT IN AND FOR SALT LAKE COUNTY, STATE OF UTAH STEVENS-HENAGER COLLEGE, : MINUTE ENTRY Plaintiff, : CASE NO. 040921860 vs. : EAGLE GATE COLLEGE, PROVO COLLEGE, : MOSESE IONGI, TREVOR SMITH, WALLACE ROGERS, RICHARD HORWITZ, : STEVEN TODD KNECHT and JANA MILLER, Defendants. The Court has before it several requests for decision in connection with the following Motions: Plaintiff's Motion to Compel Defendants' Discovery Responses; Defendants' Motion for Partial Summary Judgment that Provo College, Eagle Gate College and Jana Miller did not Engage in Predatory Hiring Practices in Violation of the Unfair Competition Act and Defendant Richard Horwitz's Motion for Summary Judgment on Plaintiff's Claim Against Richard Horwitz. The Court notes that a request for hearing has been made with respect to these Motions. However, the Court is satisfied that the parties' written submissions adequately apprise the Court of their respective legal positions and that a hearing on these Motions is not necessary. Therefore, having reviewed the moving and responding memoranda concerning each of these Motions, the Court rules as stated herein. STEVENS-HENAGER COLLEGE V. EAGLE GATE COLLEGE PAGE 2 MINUTE ENTRY Plaintiff's Motion to Compel: In its Motion to Compel, the Plaintiff is seeking access to the Defendants' database for the purpose of assessing modifications that may have been made to the Defendants' "lead list." In Request Nos. 33 and 34 of the Plaintiff's Second Set of Requests for Production of Documents to Eagle Gate College ("Eagle Gate"), the Plaintiff requested copies of Eagle Gate's lead list and any documentation concerning modifications to the lead list. The Defendants correctly observe that these Requests did not specifically seek the production of the entirety of Eagle Gate's and Provo College's databases. Since the Plaintiff did not request the database (s) in discovery, the Court cannot compel the Defendants to produce a copy of such database(s) as part of a Motion to Compel. However, it does appear that while the Defendants do not maintain a document known as a "lead list," they responded to Request Nos. 33 and 34 by compiling a list of 37,000 names of potential students and their contact information. The Defendants also provided a spreadsheet which apparently identified the changes to the database by Defendant Jana Miller. To the extent that this information is incomplete, as discussed in the Plaintiff's Reply Memorandum, the Court directs counsel for the Defendants to supplement the "lead list" and the spreadsheet previously provided. For instance, it appears that the spreadsheet pertaining to STEVENS-HENAGER COLLEGE V. EAGLE GATE COLLEGE PAGE 3 MINUTE ENTRY Ms. Miller does not clearly identify the connection between Ms. Miller and potential leads. Accordingly, the Court denies the Plaintiff's Motion to Compel, but directs the Defendants to supplement the information they have already provided in a manner that addresses the Plaintiff's concerns, as outlined in its Reply Memorandum. It may be prudent for counsel to meet and to confer regarding this supplementation. In doing so, the Plaintiff should be cognizant of the fact that the Defendants were not required to create the list and spreadsheet discussed above. It appears that these documents were compiled in an effort to be cooperative. It should be in that spirit that the Plaintiff requests further supplementation of these documents. The Court further rules the Motion to Strike Defendants' Reply on the Motion to Compel Discovery is moot+ Defendant Horwitz's Motion for Summary Judgment Without restating the parties' contentions, the Court rules that Defendant Horwitz's Motion is well-taken and therefore granted. Specifically, with respect to the Plaintiff's breach of contract claim against Defendant Horwitz, the Court determines that the Plaintiff has failed to provide any evidence of damages relative to Defendant Horwitz's conduct. Indeed, while the Plaintiff contends that it suffered damage from the loss of staff at its Ogden campus, tnere are no facts before this Court which would connect Defendant Horwitz: to this loss or STEVENS-HENAGER COLLEGE V. EAGLE GATE COLLEGE PAGE 4 MINUTE ENTRY otherwise substantiate that Defendant Horwitz's alleged breach caused the Plaintiff any harm. Further, the Court is satisfied that the Plaintiff has failed to present any evidence which would support a civil conspiracy claim against Defendant Horwitz. The mere fact that Defendant Horwitz was fired is not sufficient evidence of his alleged participation in a conspiracy. As Defendant Horwitz's Motion points out, there is no evidence that he did anything other than accept a job at Eagle Gate College after being fired by the Plaintiff. Further, Defendant Horwitz's mere association with the remaining Defendants, who allegedly conspired to drive the Plaintiff out of business, without more, is not enough to establish that he actually had a meeting of the minds with these other individuals as to a common purpose or objective. Finally, the Court notes that the Plaintiff has acknowledged that Defendant Horwitz is entitled to summary judgment as to its sixth, seventh and eighth causes of action. Therefore, in light of this acknowledgment and based on the Court's ruling herein, Defendant Horwitz is entitled to summary judgment as a matter of law. Defendants' Motion for Partial Summary Judgment as to Predatory Hiring Practices The Defendants' Motion raises the issue of what is meant by the term "predatory hiring practices," as used in the Utah Unfair Competition Act ("the Act"), Utah Code Ann., §§ 13-5a-102 et. seg. Specifically, the STEVENS-HENAGER COLLEGE V. EAGLE GATE COLLEGE PAGE 5 MINUTE ENTRY Plaintiff contends that the Defendants have engaged in "predatory hiring practices" under the Act by hiring its trained, experienced employees to perform the same or similar tasks at Eagle Gate and Provo Colleges. According to the Plaintiff, this upoaching" of its employees qualifies as a "predatory hiring practice." The Defendants disagree with this interpretation and contend the term "predatory hiring practices" does not include hiring a competitor's employees and then utilizing them in the marketplace. The Court determines that the term "predatory hiring practices" is a term of art which can be construed by looking both to interpretive case law and legislative history. In this regard, the Court has carefully considered the legislative history of the term by reviewing the exchange between Representatives Hogue and Urquhart (as discussed in the Defendants' memoranda) . In addition, while it does not appear that Utah courts have interpreted the term "predatory hiring practices," there are a number of federal cases which discuss the term in the context of the Sherman Act. Based on the Court's independent legal research, it appears that the interpretation of the term "predatory hiring practices" begins with the acknowledgment that both under the Act and under the federal case law, the hiring of one employee is insufficient to establish such practices. Rather, consistent with the Plaintiff's interpretation, it appears that the "predator" must be engaged in a pattern of hiring "en masse." STEVENS-HENAGER COLLEGE V. EAGLE GATE COLLEGE PAGE 6 MINUTE ENTRY At this point, the federal case law diverges from the Plaintiff's position as to what constitutes predatory hiring practices. Under the cases examined by the Court, talented employees are lured away not for the purpose of using their talent, but rather for the purpose of denying that talent to the competitor. Indeed, this is the hallmark of predatory hiring: The competitor is harmed, without truly helping the upredator." Recalling that the Plaintiff's allegations are centered on the Defendants hiring its trained, experienced employees to perform the same or similar tasks at Eagle Gate and Provo Colleges, it would appear that these practices would not constitute predatory hiring practices, as that term is defined under the federal case law. This conclusion seems to compel summary judgment in favor of the Defendants. However, before the Court reaches a definitive decision on this point, the Court would like to give both parties an opportunity to further advise the Court about whether it ought to utilize the federal interpretation of the term "predatory hiring practices,'' as established in the context of the Sherman Act. As the Plaintiff points out, the Sherman Act has a distinct statutory scheme which may make its interpretation of this term inapplicable. Further, the Court would like counsel to conduct further research into case law interpreting statutory schemes more closely aligned to the Act and the use of the term "predatory hiring practices" in that context. STEVENS-HENAGER COLLEGE V. EAGLE GATE COLLEGE PAGE 7 MINUTE ENTRY Counsel should submit supplemental briefs to the attention of the Court's attorney law clerk, Alexandra Doctorman, within 10 days of this Minute Entry decision. The Court will then render a final ruling on the Defendants' Motion for Partial Summary Judgment as to predatory hiring practices. This Minute Entry decision will stand as the Order of the Court, denying the Plaintiff's Motion to Compel and granting Defendant Horwitz's Motion for Summary Judgment. Dated this day of July, 2007. ROBERT P. FAUST DISTRICT COURT JUDGE * STEVENS-HENAGER COLLEGE V. EAGLE GATE COLLEGE PAGE 8 MINUTE ENTRY MAILING CERTIFICATE I hereby certify that I mailed a true and correct copy of the foregoing Minute Entry, to the following, this jday of July, 2007: Robert E. Mansfield Scott M. Lilja Lisa B. Bohman Attorneys for Plaintiff 50 S. Main Street, Suite 1600 Salt Lake City, Utah 84144 Thomas R. Karrenberg Nathan B. Wilcox Jennifer R. Eshelman Attorneys for Defendants Eagle Gate College, Provo College, Horwitz and Miller 50 W. Broadway, Suite 700 Salt Lake City, Utah 84101-2006 Catherine S. Conklin Attorney for Defendant Rogers 205 26th Street, Suite 32 Ogden, Utah 844 01 Mark N. Brian Attorney for Defendants Iongi and Smith P.O. Box 173 Spanish Fork, Utah 84660 \(\4 ^Snsui^ <2rv T IN THE THIRD JUDICIAL DISTRICT COURT IN AND FOR SALT LAKE COUNTY, STATE OF UTAH STEVENS HENAGER COLLEGE, Plaintiff, vs. Case No. 040921860 Ml EAGLE GATE COLLEGE et al., Defendant. MOTION HEARING FILED DISTRICT COURT Third Judicial District FEB 1 1 2008 SALT LAKE COUNTY BV-U&L January 22, 2008 Deputy Clerk BEFORE THE HONORABLE ROBERT FAUST District Court Judge jeri Kearbey Certified Court Transcriber \z^o Gaylene Circle Sandy, Utah 84094 (801) f66 4^40 2fcl4 APPEARANCES: For the Plaintiff: Robert E. Mansfield Scott M. Lilja VANCOTT 36 South State, Suite 1900 Salt Lake City, Utah 84111 For the Defendnats: Thomas Karrenberg Nathan B. Wilcox Jennifer R. Eshelman ANDERSON & KARRENBERG 50 West Broadway, Suite 700 Salt Lake City, Utah 84101 2 SALT LAKE CITY, UTAH; TUESDAY, JANUARY 22, 2008, 10:04 A.M. -oooOooo- THE COURT: ... Thank you. MR. KARRENBERG: Thomas Karrenberg, Nathan Wilcox and Jennifer Eshelman for the defendants, Your Honor. THE COURT: Thank you. Just a comment. Do we need to argue that motion involving Ms. Miller? I guess if you didn't oppose it, I'm - MR. KARRENBERG: Well, Counsel was kind enough to send us a letter that said "We will stipulate that Stevens Henager is not bringing a claim against Ms. Miller solely based on the acceptance of the employment with Eagle Gate College, and, accordingly, no further briefing on defendant's partial motion for summary judgment," et cetera, is necessary. So I think we can grant that motion, Judge. MR. MANSFIELD: Yeah. And I guess our point, Judge, is we didn't assert a claim for that, so that's why we didn't oppose it. THE COURT: That's fine. All right. I'll go ahead and grant that motion then. And just help the court clerks out next time. If you would just drop us a note you're not opposing a motion. MR. MANSFIELD: Oh, certainly, Judge. THE COURT: Here's why, is when we get the notices 3 to submit, they start looking for the memos, the replies and responses, and we're skipping something and so we don't know if we missed it and not filed it — MR. MANSFIELD: Absolutely, Judge. THE COURT: - and we've got it, or if we never received it. So that would help us on our end. All right. Thank you. All right, Mr. Karrenberg, I guess that leaves us with your motion on summary judgment on the claims. MR. KARRENBERG: Yes, sir. Thank you, Your Honor. Judge, we're now into the fourth year of this litigation. The case was filed in October of 2004, and we still don't have the most rudimentary idea of what are the amount of damages the plaintiff is claiming to have suffered, even though, in the complaint, the plaintiff alleges damages of over $10 million, enough where, obviously, it's time to take this kind of a case seriously. The complaint, as I indicated, was filed in October of 2004. Since then, we have done everything possible to obtain this damage information. In the initial disclosures, the plaintiff said they had not yet computed damages. And, Judge, that's despite the requirement that the plaintiff must have done some form of computation to allege damages in the complaint. If you'll notice in our memo at footnote 1 on page 4 2, we cited the cases that says that could even be a Rule 11 violation, or at least evidence of a Rule 11 violation. Now, we haven't moved for any Rule 11, but it's clear that, with Rule 26, you're supposed to do some sort of calculation beforehand. In fact, because of that, after we got the Rule 26 disclosures, which were dated November 15th, 2004, we immediately sent a letter asking — dated November 18th, 2004, asking the plaintiff to either supplement those disclosures or amend the complaint. And that began a long history of trying to ascertain what are the damages the plaintiff claims? Now, we've set forth in detail in the Statement of Facts all the discovery, the interrogatories, the document requests, the 3 0(b)(6) letters and even the motions we've gone through to try and find out what is the number that plaintiff is claiming in connection With the various causes of action. In fact, all of it's been done without success. Now, after the motion to compel, the only documents we received, Judge — these are attorneys eyes only — were two pages of charts like this showing the supposed number of starts at their various campuses, which is — there's a second page of that, which doesn't tell me anything as far as damages. And we did get from the various campuses a general ledger. It looks like a QuickBooks. THE COURT: What is shown on the general ledger? 5 Just what type of information, so I'm aware of it. MR. KARRENBERG: Judge, a bill payment or a check, general journal check amounts, total cash in the bank accounts, school deposits, bank transfers. It's — THE COURT: General ledger. MR. KARRENBERG: Judge, it almost looks like my checkbook, except there's a lot more money there. But it doesn't give us any damage calculation whatsoever. And we asked in another letter, and counsel says they don't have to respond to letters, and that's, you know, technically, that's true. But we've all been doing this business for a long time and, rather than making a lot of motions, it's usually a lot easier to try and resolve situations and write to people. So we asked in a letter to confirm that these are the only documents they had in damages. That letter was not responded to. And, as I've indicated, notably, these documents, no matter what the information is on them, does not have any calculation of damages. Thereafter, we served the interrogatories and specifically asked for the — the information concerning damages. And in a response, we were told we'd be referred to experts. The problem is, Judge, the deadline in this case 6 for filing experts' reports was June 2 8th, 2007, and we received nothing. Now, they claim we didn't file anything. But, Judge, opposition expert reports were due on July 20th, and since we didn't have anything, we don't have an opposition because we don't even know what to do. The time has past, Judge, and so we move the summary judgment motion. And the summary judgment motion is based on their inadequacies of their documents and their deposition testimony, where they cannot calculate the damages with any degree of specificity. That's competent evidence and it's unrebutted. There is no Rule 56(f) motion satisfying the requirements of Rule 56(f) saying that we need further discovery before this could be done. There is no affidavit from an expert saying, because I'm missing this kind of information and, therefore, I can't do a calculation of damages," there's not even an affidavit from a non-expert contesting the facts. All we have, even though this is a Rule 56(f) motion, all we have is argument from the counsel, and that's not how Rule 56(f) is supposed to work. Now, they claim they don't have — THE COURT: Well, we have the testimony of their client in a deposition as well. MR. KARRENBERG: I'm going to get to that, Your Honor. I plan to do that in about two seconds here. They claim they don't have information from us. 7 1 Well, Judge, to be perfectly honest, that's nonsense. They 2 said they need the original databases for the lead list. We 3 provided them — and they have this; the database and the 4 lead list. The only thing different, we maintain it on a 5 program called CampusView, which they could not manipulate. 6 And as the affidavit we've submitted of Rachel Johnson 7 shows, the only thing that happened was she transported it, 8 the entire database to an Excel spreadsheet for the simple 9 reason that would allow plaintiffs to search it and also 10 manipulate it. 11 If we put it in the original database, it would 12 just be a picture. And the only way they'd be doing it is 13 by hand. This allowed them to do it. But the information 14 is exactly the same, it's just been transported from 15 basically a proprietary system that they don't have access 16 to to a normal Excel spreadsheet so they can look at it. 17 That's uncontroverted. If we hadn't done that, we'd be here 18 hearing how we gave them the information but they can't do 19 anything with it and they're forced to sit down late at 20 night with their green visors on and pencils comparing 21 names. 22 THE COURT: Did you advise them that you were 23 changing the format of the information so they could find 24 it, that was being shipped over to them? 25 MR. KARRENBERG: I don't believe so, Judge. But 8 it's — but it's the complete information. And there's no affidavit from anybody saying, "I can't use this." None. Now, raising about the — the testimony of Mr. Barney — and I think that's important because it's actually in page 2 of the reply memo - the response memorandum. Carl Barney, owner of Stevens Henager, placed the damages incurred by Stevens Henager at approximately $10 million, based on his experience. Plaintiff's decline in enrollment, cost of hiring and training new employees, cost of building plaintiffs' admission department. And then they even write, the last sentence of that paragraph: "A more definitive calculation will be provided by plaintiffs' experts." Well, Judge, let's go through it. Decline in enrollment. That's all within their knowledge, Judge. They know what their decline in enrollment is. I don't. And there's no information I have or my client has that's going to shed any light on the decline — their decline in enrollment. The cost in hiring and training new employees. That's the second item. There's no information my client has that's going to allow them to figure out their costs for training and hiring new employees. The last category, the cost of rebuilding plaintiffs' admission department. The same thing, Your 9 Honor. We will not have and do not have any information that can do that. Yet, that's what they're relying on. Now, how do you make the leap that they didn't have time in the three years — almost three years when the case was started to hire an expert or an accountant or even an internal bookkeeper to make those calculations? The reports were due in June of '07. The case was filed in October of 2004. The decline in enrollment? They can tell me what it is and how much they think is our fault. Two, cost of hiring new employees? I didn't pay for it. I don't have anything to do with that. Same thing with building their new admissions department. There's no way you logically can jump from that category of damages to saying, "I need an expert." And, again, Your Honor, there is no affidavit from anybody, or a Rule 56 motion, saying that they cannot calculate those categories of Mr. Barney identified without some additional information. Nothing. We just have statements in a memorandum. Now, Judge, as I indicated, the case originally started with a $10 million claim. Excess of ten million. That's a serious amount to be asking for in any business. More importantly, Your Honor, that's a serious amount for a company to really have lost, if it's true. I don't know of too many companies in this community that could withstand a 10 $10 million hit and still be in business four years later. I guess Citibank, with the way they've been writing off and stuff lately, can afford a lot more. But that's not what we're dealing with here. So what does that tell me? Obviously, this case has been designed as some sort of competitive tool, Judge. And it's been extended on the basis of some sort of competitive tool. Except litigation is not intended to be a competitive tool. We come in here in good faith, if we think our client's rights have been breached, and prove up our damages. They've had enough time. The scheduling order is clear. They haven't come up with any damages. It's a Rule 56 motion which requires them to dispute the facts with evidence. There is none in the case. Your Honor, I submit that this motion should be granted. Thank you, sir. THE COURT: Thank you very much. MR. MANSFIELD: Morning, Judge. THE COURT: Morning. MR. MANSFIELD: Please the Court and counsel. Your Honor, as Mr. Karrenberg mentioned, one motion — or as Your Honor has noted, the one matter, motion for summary judgment, has been taken care of; we're now talking about the motion for summary judgment on damages. 11 Defendants have asserted that summary judgment should be granted in their favor on all causes of action set forth in plaintiff's complaint inasmuch as Stevens Henager has not established it's damages. And defendants attempt to make a big deal out of the fact, Judge, that we alleged our damages in our complaint but can't come up with a specific calculation. As Mr. Karrenberg pointed out, they requested it first in November, just a couple of months, a month after the complaint was filed. This is a typical practice, Judge. You allege what you, in good faith, believe your damages are. We did that. We alleged that in our complaint. And this is not a new issue they're bringing before the Court. Previously, defendants filed a motion to compel on our initial disclosures before Your Honor was assigned the case, with Judge Roth, making the exact same arguments. Our initial disclosures didn't set forth the specified amount of damages. We made these allegations in the complaint, and we shouldn't be compelled to amend our initial disclosures. Judge Roth rejected that argument and denied that motion. And that was in June of 2 005, Judge. Now, this is the type of case, Judge, where damages are going to be difficult to determine. And this is exactly the kind of case contemplated by Rule 702 of the Utah Rules of Evidence, where an expert is necessary. 12 There's a great deal of economic analysis that needs to go on, such as the — you know, one of our big issues is the decline in enrollment. The damages relate — you know, in order to get damages, you have to show causation, Judge. And a lot of the documents that they have that we've been seeking, this lead list and the spreadsheet regarding the lead list, are absolutely instrumental in determining the decline of enrollment and the causation between what we're calling our decline and the damages associated with that. And we have my affidavit that we've attached to our opposition to their motion for summary judgment stating that. Now, they didn't just voluntarily produce these documents, as Mr. Karrenberg said. We had to file a motion to compel to get those documents. They opposed the motion to compel. It was granted by this court on July 26th. We didn't get the documents until after we filed our opposition to this memorandum. That wasn't until November, just a few months ago, Judge. That's when we first got the documents we were requesting. And that's what's necessary in order to complete our damage calculation. It's grossly unfair for defendants to set up a situation where we can only fail because they're holding back documents that we need for this damage calculation, and then jump and say, "Oh, well, you didn't get us your expert 13 report so, therefore, summary judgment should be granted." Now, we've continuously told defendants throughout this litigation what the basis of our claims for damages are. They know what those are. They've asked them in depositions, in the depositions of Mr. Barney, Ms. Gastigar, Mr. Moss, of Ms. Dewsnup. Those three are campus presidents; Mr. Barney's the owner of Stevens Henager College. We've responded to it in interrogatories. We've produced every document we have. They have everything — every accounting document down to the most rudimentary of the accounting documents that they need and on which our experts will rely. This has been a hard-fought case, Judge. A lot of money's at stake here, as Mr. Karrenberg said. Even as late as two days ago, we get an email from counsel for defendants responding to our request for a supplementation on their financial records, saying they'll get it to us in the next couple of weeks. We're still getting documents produced to us, Judge. That's still ongoing in this case. We've also — when we filed prior — as Mr. Karrenberg pointed out — the discovery order required that expert reports be filed by June 28th. On June 26th, two days before then, when defendants wouldn't stipulate, we filed a motion with this court to extend the dates and to 14 enter a new scheduling order. That motion has been fully briefed and has been noticed — has been submitted for decision before this Court, and we would like a ruling on that. That notice to submit, I believe, was filed in July of this year. And we need that scheduling order so we can complete this case, Judge. This case does need to get over. This is not a case that's being used — litigation is not being used as a competitive advantage and tactic, as Mr. Karrenberg noted; we're here legitimately seeking damages. We needed documents; we now have those documents. We got them, like I said, in November. We also — part of our — our motion for extension of time was based on the fact that we need to depose some of our former employees who are working for defendants and who are represented by defendants, pursuant to a letter from Mr. Wilcox that they are representing some of those individuals. We didn't get those addresses until August 20th, several months after discovery had — fact discovery had completed. We needed those addresses to depose these people and we were denied access to them. We need to do that. And that was part of our — the reason for our motion to amend the scheduling order. Your Honor, we'd ask that the scheduling order be amended to allow the completion of fact discovery simply for 15 the purpose of deposing these individuals — and they're listed in Mr. Wilcox's letter. I think that's all that's left on the fact discovery. And then an additional amount of time - 3 0 days after that, in order to complete and get our expert reports to the — to the defendants, and let them then file their rebuttal reports. THE COURT: Have you retained an expert? MR. MANSFIELD: We have, Judge. And they're working. But we need some final information, Judge. We got it, we're working on it, but we need these depositions. We'd like to get this case to trial as well, Judge. This has gone on a long time. It has been a hard- fought case — looked like you were going to say something, Judge. THE COURT: I'm thinking. MR. MANSFIELD: Okay. It's been a hard-fought case, Judge. We think, out of fairness and substantial justice, defendants should not be permitted to deny us access to legitimate information as requested, this Court ordered them to produce, that they very tardily produced, and then step forward and say, "Well, sorry, you're too late. You can't — you didn't file your expert report, so summary judgment should be granted in our favor." It just violates all notions of fair play and substantial justice, Judge. And we'd ask that their motion for summary judgment 16 be denied and that a new scheduling order be put in place so that each party has a full and fair opportunity to present their respective cases and so we can get this case to trial, Judge. Thank you. THE COURT: Thank you. MR. KARRENBERG: Your Honor/ let me address in order, I think, the arguments that I heard. First one was that it's a typical practice to not make some calculation of Rule 26 damage. Judge, I happen to have been on the Rules of Civil Procedure committee when we rewrote all those rules, which means it makes people mad at me. And I happened to be on the subcommittee that actually rewrote it. We did the actual work. And the idea was, if you're going to file a lawsuit, you do a calculation of damages. And I will tell you this, Your Honor, it is not typical in my firm that we do not. We hire experts, if need be, before to get a preliminary damage analysis, or we get it from our clients, or we do it ourselves. It is not typical and it is contrary to what exactly was intended by the rules. We don't do it. Now, he said the motion was denied when we moved to amend that. We also made a motion to compel. And Judge Roth did deny our motion to — to have them amend their disclosures. But he granted our motion to compel and told 17 them to give us their documents on damages. This is what we received. Two sheets on starts and the general ledger. We have that from a motion to compel. The lead list they say they donft have, they have it, Your Honor. It is there. And they said they had to make a motion to compel, but Counsel misrepresents what the motion is. And if you'd like, Your Honor, I'll bring you the minute entry. THE COURT: When did they get the lead list? They actually didn't get it till February — or November? MR. KARRENBERG: When did they get it, Ms. Eshelman? Well, Judge, we gave it in response to this motion, and here's — I have this minute entry, Your Honor, where you may want to follow along. THE COURT: Yeah. I was looking for my minute entry. Is this the one in July? MR. KARRENBERG: Yes, sir. THE COURT: Thank you. I was just looking for that. MR. KARRENBERG: Judge, that is the one from July of 2007. And, as the Court noted in the motion to compel, it said in the — well, on page 2: "Plaintiff is seeking access to defendant's 18 1 database for the purpose of assessing 2 modifications that may have been made to 3 defendants' lead list." 4 The second paragraph readsf: 5 "Defendants correctly observed that these requests 6 did not specifically seek the production of the 7 entity — of Eagle Gate and Provo College's 8 database. Since the plaintiff did not request a 9 database in discovery, the Court cannot compel." 10 And if you look at the page — the first full 11 paragraph on page 3: 12 "Accordingly, the Court denies the plaintiff's 13 motion to compel but directs the defendants to 14 supplement the information they had already 15 provided in a manner that addresses plaintiff's 16 concern as outlined in its reply memorandum." 17 They have that, Judge. 18 Do you know exactly when you gave them that Excel 19 spreadsheet? 20 MS. ESHELMAN: Well, the second one was when we 21 produced another one in June of 2007, and I'm trying to find 22 the date of when I produced the initial disk. And I'll 23 determine that — 24 MR. KARRENBERG: They had that, Your Honor. Okay. 25 Now, Judge, Counsel also says they're just getting 19 information. What Counsel didn't tell you is, during the holiday season, Christmastime, parents in town, we get a request to supplement and give them the last two years of the financials. Ms. Eshelman and I go check and see if they've even asked for those. They haven't. And, Judge, got no problem with it, look at it and say, you know, "Rather than get into a fight, even though I don't think they're entitled to it because they haven't asked for it in discovery, just give it to them." So we're getting it. You want to talk about the no good deed shall be unpunished, you know, I don't want to get in a fight and it gets thrown back at me. I guess I should learn my lesson. But it wasn't asked for and we only asked for it, got it during Christmastime. If they want supplements that they think they didn't have, where have they been since the discovery cutoff? Well, we're going to give them those financial statements. There's no problem with doing it. Okay. Now, the motion to extend, Judge, here's what's interesting. For experts, I just read you Mr. Barney's. What is the — why do you need an expert and information from us for their decline in enrollment? Either they know or they don't know it. And they knew it from day one. Why do they need anything from us, no matter what, to tell me what's their cost of hiring new people? You know. Judge, 20 this is illogical. Spock would be turning over in his grave. You know, his ears would be pointed downward. Why do they need for me to tell them what's their costs of rebuilding their admissions department? That's illogical. It makes no sense. And, Judge, even more importantly, while you probably haven!t looked at it, you'll see what we briefed when they file their motion to extend the discovery, expert report. In March of f07, they filed a motion to extend the discovery period. They said they needed a couple of things. Two things only. Jana Miller's hard drive and an out-of- state deposition of Todd Knecht. That was the only reason, in March of '07, the only other discovery they claim they needed to extend the discovery cutoff. And you granted it to them for those two reasons. Now, afterwards, they want more? They didn't know about this in March of '07, when these deadlines are approaching for June to have the discovery cutoff and for having experts? Judge, this is all looking for excuses after the fact. Now, even these additional witnesses, these are people that used to work for them. Did anybody notice up their depositions? No. No. Even if they didn't have the addresses, some of these were working for us. Notice them up, send me a letter saying, "Are you going to produce them? 21 If not, I'll submit them." Addresses? They used to work for them. And you want to know where* Mr. Wilcox got the affidavits? You can look in the memos. He went to the phone book. And I think four or five of the six are correct, Judge. That's where he got the names and addresses for these people. And the other one was somebody that we knew had even applied for a job there, and we assumed they had the addresses. These are all pretextual. There's no reason that this couldn't have been done. And, clearly, they don't need any — they didn't need any expert information to finish up on these categories of documents that Mr. — damages that Mr. Barney did. Judge, I don't — I have no idea if this has been caused by... Mr. Wilcox just points out to me a letter from Mr. Lilja that we had a letter on April 19th, 2007 saying that — that we had provided electronic version of the data. So they've had this data for some time. Okay? Judge, where's the Rule 56(f) motion? I don't know why this didn't get done, if the client doesn't want to get it done or something else wasn't tracked. But why, when we're into the fourth year of litigation and we have complied with the rules, we've compLied with the Court's orders, why should my client have to suffer? Why should we 22 1 be dragging this out? 2 Having a $10 million claim over a business in this 3 community is a large claim. Judge, it's motion time, 4 there's been no evidence stating what the damages are. 5 Every claim requires proof of damages; they don't have any. 6 We think the motion should be granted. 7 Thank you, Your Honor. 8 MR. MANSFIELD: Judge, may I very briefly address 9 the letter from Mr. Lilja that he just raised regarding the 10 documents? That letter was sent in April saying we got the 11 database. But what it also — and subsequent to that, we 12 couldn't access it. That's why they produced more of this 13 information in June. We still couldn't get into it. That's 14 why we filed our motion to compel; Your Honor ordered they'd 15 be given — substantial additional information be given, and 16 that was provided in November, as I mentioned earlier, 17 Judge. 18 MR. KARRENBERG: Gee, Judge, they can't get into 19 it? Let me read you the second paragraph of this letter. 20 "In our review of the documents produced, there's 21 a discrepancy between the hard copies of documents 22 and the electronic data provided." 23 Now, how do you know that if you don't get into 24 it? I mean... 25 THE COURT: Thank you. 23 MR. KARREMBERG: Thank you, sir. MR. LILJA: Your Honor, as the person who wrote the letter, could I just say what the point of that letter was? The information they have provided us on that electronic version was incomplete. We asked for a complete version. They produced another version in June of 2007. That was also incomplete. They would not give us the information until we filed a motion. Your Honor ordered them to produce the additional data, which they produced to us finally, which appears to be complete, based on both the hard copy version and now the electronic version. So that's where we are. THE COURT: Thank you. Give me just a few moments, I'll be (inaudible). MR. KARRENBERG: Yes, sir. MR. MANSFIELD: Thank you, Judge. (Pause in proceedings, 10:38 to 10:53 a.m.) THE COURT: A couple of questions. And we're trying to get some clarification, if I can. The first question I wanted to make sure that I understood is that, you're indicating that the requests for extending the dates in the scheduling order was in fact never ruled on. Is that - MR. MANSFIELD: That's correct, Judge. That was 24 filed, submitted for decision in July and it's never been ruled on. THE COURT: Do you have any information to the contrary on that, Mr. Karrenberg? MR. KARRENBERG: No, sir. No, sir. That - I mean, I don't think it was submitted for decision in July. I think it was filed in July. MR. MANSFIELD: It was. July 3 0th or 31st. THE COURT: All right. And I think we're trying to find some of that. And then you indicated you're asking for all the additional deadlines to be extended 60 days, right? MR. MANSFIELD: Well - THE COURT: And so - MR. MANSFIELD: — obviously, we're way beyond that now, Judge. THE COURT: And that was my point. If we're looking at the 60 days — and, essentially, we've had six months — in a way, we've kind of had a de facto six-month extension, in a way. MR. MANSFIELD: In a way. But we've been waiting for a lot of these documents that we just got, we believe, the first week in November, Judge. THE COURT: That's my next question. Can you tell me what is different about the documents that you received 25 in November that are different from the information that you had received earlier in the spring — MR. MANSFIELD: Yeah. As Mr. Lilja explained, the — what we received in April and then in June were incomplete versions of what we received in November. November was the complete document that was — was viewable. We then had what we needed, complete information in November. It was substantially incomplete prior to that, Judge. THE COURT: Okay. What about the nature of the content of the information? Do we have any difference in the nature of the content that — MR. MANSFIELD: Well - THE COURT: - that would prohibit you from starting to talk with an expert in regards to the type of information to be able to form — relate an opinion? MR. MANSFIELD: Certainly, Judge. I mean, the nature wasn't really different in the sense of what it was. I mean, there was lead lists and information regarding changes to lead lists, and that was incomplete. What we're — one of our big claims here, Judge, is drop in enrollment, which we're claiming is the result of the defendants' tortious acts. I mean, we have — that's their trade secrets claim, we have the intentional interference claim, we have the contract claim. A 26 1 significant amount of that has to do with what was their 2 enrollment — their lead list. Our claim is they stole our 3 lead list, if you remember, by hacking — our former 4 employees hack — who were then employees of the defendants, 5 broke into our system, hacked into our system, stole this 6 information, downloaded it and used it. We needed to make 7 that comparison of their lead list to our lead list to see 8 what it showed to help pin down our causation for damages. 9 And until we have that causation, we can't really do our 10 damage calculation. I mean, our experts have been working, 11 but they've been stalled because, if they do the work, you 12 know, one way without that information and it bears out 13 different information, you know, the work is going to have 14 to be completely redone because it changes the entire nature 15 of the claim. 16 MR. WILCOX: Your Honor, can I respond to a couple 17 of things? The access to the database question, there is no 18 allegation there's been any access to the database that 19 would result in any information being taken from the 20 database since, I believe, May of 2004, which was before 21 this — before this lawsuit was commenced. There's no 22 evidence of any access after that date, there's no 23 allegation of any access. So we're talking about lead lists 24 that would have existed before 2004. That information was 25 given to them beforehand. 27 What was given in November — in November of last year was a supplementation of it to carry it through — as I understand it, through the date — supplement, you know, carrying it forward. But you're taLking - their allegation is that we accessed lead lists that existed before May of 2004 not after May of 2004. THE COURT: But the nature of the information is the same, it just may have covered two different time periods, is what you're indicating? MR. WILCOX: Your Honor, what you're talking about, you're talking about names. They're saying that we have names on our list that would be on their list and, therefore, the allegation is the only way they could get on our list is if we — if we somehow accessed the computer and stole that information or obtained it in some other type of nefarious or — or tortious manner. The names on the list, however, they've already been able to search that. They've gone through and identified already, I think it's 5,000 names, Rob, that you say — that appear on your list and eippear on our list? MR. LILJA: It's more than that based on the November list. MR. WILCOX: Okay. More than 5,000 names. But - MR. LILJA: But that's the - MR. MANSFIELD: Okay, hold on a minute. 28 MR . WILCOX: But the point is they'v e been able to identify these names. If they got the names and they've had the names since way back, they can access the information, they can use the informat ion. It's a matter of, if they've got a damage calculation ]base d upon that, why don't we have it, if they know? That's the (zoncert^. MR. MANSFIELD: And, Judge — MR. KARRENBERG: Judge, let me point out one thing. MR. MANSFIELD: Wait. I'm being double-teamed here, Judge. This is a little unfair. MR. KARRENBERG: Well, sir, wait. You've asked Mr. Lilja to get up, sir. Let me point out one thing. THE COURT: How - hold on. MR. KARRENBERG: Just one comment. THE COURT: No. No. MR. KARRENBERG: Yes, sir. I understand no. It's not a hard word. MR. MANSFIELD: Judge - THE COURT: Let me direct the traffic, if we might, since I'm the one asking the questions. MR. KARRENBERG: Like I sai£, it's not a hard word, Your Honor. MR. MANSFIELD: No, it's not. Judge - 29 THE COURT: One at a time. MR. MANSFIELD: Certainly. Substantial additional information, including additional columns of information was added to what we got in November. One of the issues — THE COURT: Okay. Try and give me detail of substantive nature of information. What I'm trying to weigh in my mind — and I understand it was supplemental information, but was it of a completely different distinct type and nature — MR. MANSFIELD: Yes. THE COURT: - or was it of a type that was just additional to and of the same type that you!d already received before? Because here's why I'm struggling. If you had the information before and this was merely to complete the information, to supplement it, why couldn't an expert have been starting to have been used and running the calculations based upon the information that you did have? And if you would have additional people, granted you would have additional numbers that you could add in to the calculations, because now you have this supplemental. Just like revising your medical bills. You've been in the hospital longer than what you had before, you add the dollar figures and top it. I don't — you know, we're not seeing anything that 30 1 happened with that initial information that was provided 2 to - 3 MR. MANSFIELD: It's a little more sophisticated 4 than that, Judge. First of all, there was additional 5 information. One of the claims we have, obviously, is you 6 have a great deal of duplication on the names. Part of 7 our — our assertion, you know, there's going to be a certain 8 amount of duplication because you're going to have, you 9 know, some students are going to be applying and submitting 10 inquiries to all of these similar types of schools. We 11 think the incidence of duplication is much, much greater 12 than what that would — what would be found ordinarily. 13 That, we could not determine until we got the complete list. 14 Also, additional information was added and — 15 THE COURT: Such as what type? 16 MR. MANSFIELD: In the sense of who - who added? 17 Who made the changes to the lead list? Because, that's very 18 important in determining causation, Judge. Because if it's 19 one of our former employees that we can tie it to, that's 20 going to — that's going to directly impact our causation 21 argument. 22 THE COURT: They just want to know who had the 23 finger in the pie. 24 MR. KARRENBERG: They have a lot of the - what 25 Stevens Henager called admissions consultants. And I don't 31 know what Eagle Gate calls them. Who had their finger in the pie is very critical, Judge. THE COURT: Now, I have - as long as you're there, my other questions and concern, Mr. Karrenberg seems to be very persuasive with respect to the three issues on damages. That type of information really would have been in your hand all the way along and the information that they would have provided you on that is really nothing that they have or should have given you. Now they1re going back with you on this, such as decline in the enrollment numbers. Do you agree that nothing they could have given to you helps you make a calculation for enrollment numbers or past number on one date, X number on another date? MR. MANSFIELD: Okay. Yes, thatfs correct in one sense, Judge. There's no doubt we know what our numbers are. On "X date, they're this number; on "Y date, they're a different number. No doubt. But what it comes down to, Judge, is causation. What is the reason those numbers decline from "X date to "Y date? Their argument is going to be it's simple market forces and — and it's not our fault. What we're — what our — our theory — THE COURT: How do you prove your theory - MR. MANSFIELD: Yeah. Our theory - THE COURT: — with that information you say you 32 needed and didn't get until November^? MR. MANSFIELD: Our theory of the case, Judge, is the reason our enrollment numbers dropped is because our admissions consultants were hired away by Eagle Gate College, they then improperly gained access to our confidential database of lead lists, they downloaded those names, they used those names to our disadvantage to recruit, that they changed information in our lead list, they — you know, they used them for their own purposes. We need to know, one, what their lead list was, what it looked like, so we can do the comparison to make that causation determination and also, then, determine who made those changes. And thatf s integral in proving our — our damage figures with drop of enrollment. THE COURT: All right. Now, you say, if I understood correctly from co-counsel, that you had approximately 5,000 names or leads. MR. MANSFIELD: At one - THE COURT: And at — in the spring of this year. MR. MANSFIELD: That's correct. THE COURT: And then there was some supplemental information given in November — MR. MANSFIELD: Some in June and then also some in November. THE COURT: - that - that changed that. Do we 33 know how much those numbers changed by? Hundreds? Dozens? Thousands? I mean, what are we really talking about? MR. MANSFIELD: My understanding, Judge - MR. LILJA: About 3,000 additional. The critical point is (inaudible). Before, we had no idea who put those 5,000 names on there; now we do. That's the — that's the information we're going to (inaudible). THE COURT: You do know who - MR. LILJA: And that — there's an additional problem — THE COURT: — for the ones prior to March or — MR. MANSFIELD: No. From November. From the November information, we now know. We've found that out. MR. LILJA: That's the additional column that they added was — would add it. THE COURT: You recognize, then, you've — MR. MANSFIELD: I know. THE COURT: - double tag teamed these guys. MR. MANSFIELD: Yes. THE COURT: So it works out even. MR. MANSFIELD: (Inaudible). THE COURT: All right. What about the response to the other information — MR. MANSFIELD: Now, such as information about what it cost to retrain — 34 1 THE COURT: There you go. 2 MR, MANSFIELD: — an admissions consultant, I 3 agree, Judge, that that information's within our control. 4 But the substantial portion of our damages deal with the 5 decline in enrollment and the damages that flow from there. 6 I mean, thatfs the substantial element of damages in this 7 case, Judge. Not the value to reach — you know, the cost to 8 retrain the admissions consultant, you know, and marketing 9 costs. Those — 10 THE COURT: Okay. And my — don't we have an 11 expert on that? And those figures being calculated, then, 12 in order to determine (inaudible). 13 MR. MANSFIELD: Well, Judge, I think that's part 14 and parcel of our entire damage numbers and our expert 15 report, and rather than piecemeal it, we wanted to give a 16 complete and accurate damage calculation so it wouldn't be 17 used against us at a later date, you know, at the time of 18 trial, jury trial, saying, "Well, at one point, we said 19 it's — you know, they came back and said it's this. And 20 then we later supplemented and added to it, Judge. I think 21 it's better to have a complete final report, provided it 22 gives an accurate assessment of what our damages are rather 23 than do it piecemeal. And we've timely — we moved prior to 24 the cutoff date to amend and to continue the — the date 25 for — for disclosing expert reports, you know, two days 35 1 prior to the due date, but we did timely move for that, 2 asking Your Honor to — to change those dates. 3 THE COURT: Thank you. 4 MR. MANSFIELD: Thank you. 5 THE COURT: Mr. Karrenberg. 6 MR. KARRENBERG: Yes. 7 THE COURT: It's now yes. 8 MR. KARRENBERG: And I never said yes as well. 9 First of all, Your Honor, the fact that there's a 10 lot of names on this list, I got to tell you, the only thing 11 that surprised me is the names are 99 percent the same. 12 These people are marketing to the same group, using the same 13 advertising in this community. They get lead lists from 14 high schools — not hard to get. The — if you pick up City 15 Weekly, you'll see their ads on the same page next to each 16 other. The TV are at the same time late at night. In fact, 17 unless these students are really silly, they should be 18 calling not only these two schools but every school just to 19 find out. 20 So the fact that names are the same are going to 21 be there. Okay? So, Judge, the information they have 22 received additionally had just been updated information. 23 There's been no new information. 24 THE COURT: Articulate for me what percentage that 25 additional - if any information was given in November - this 36 is of what had been given in June and before. MR. KARRENBERG: We added one column showing who was the admissions representative. But they can't put the information into the computer. THE COURT: Okay. MR. KARRENBERG: Because they do not change or put the information in. The affidavit of Rachel Johnson tells you who puts the information in. But, Judge, one other thing: Causation is a fact question. THE COURT: Let's make sure I'm on the same page. So what they've indicated is that they now have a name or an admissions persons associated with the enrollment people. What you're saying, really, is nothing of substance because they weren't the ones that had anything to do with it at all anyway. MR. KARRENBERG: In entering it. THE COURT: So they add the additional names, but it doesn't cause — cause a connection that they're thinking it's going to do that. Is that what you're telling me? MR. KARRENBERG: Exactly, Your Honor. But even more importantly, discovery was cut off before they made this motion. Causation is a fact question, it is not an expert question. And, you know, Judge, if you want me to walk back to my office, I'll come back with the cases across 37 the board. THE COURT: No. I don't have a problem with it. I The question is, though, whether or not you have provided sufficient factual information to allow them to perform those calculations. Which I hear the argument on their side, and they're saying they weren't able to attempt to do that until November. MR. KARRENBERG: Well, Judge, one, I disagree with that. Okay? Two is, even the motion to compel that they said you granted says it's not granted because they didn't ask for this information. They didn't ask for this information, and you asked us to just supplement any additional information. In March, when we're alreaidy facing a cutoff date, they're asking for extensions, and for two reasons. You know, this is — what's the name of that kids' story, The Neverending Story? I mean, you know, what, are we back here next week on another one? These names of these people they wanted addresses to to depose, they have nothing to do with damages. THE COURT: Yeah. No. I'm not so concerned as much about those as I am in trying to get an understanding, really, of the additional information or supplemental information — MR. KARRENBERG: But, Judge - 38 1 THE COURT: — from November to the current time. 2 MR. KARRENBERG: If they needed additional 3 information, other than supplemental information, where were 4 they getting it in the first place? They didn't ask for a 5 lead list. They didn't ask for our entire database. They 6 asked for a lead list, and they got it. 7 You know, Judge, I don't have to do their job. 8 That's what they asked for, that's what they got, that's why 9 you denied the motion. And you said, "See if you can get 10 together and supplement with them to see what they need." 11 So we do it, Judge. Your Honor, this is three- 12 plus years into the litigation. By this time, they've had 13 this information; at the last minute, they're going to come 14 in and say, "Oh, we didn't ask correctly and, Judge, can you 15 help us out?" And so we do. I mean — and these — and the 16 declining enrollment? They either knew it or they didn't 17 know it. The other items, they either knew it or they 18 didn't know it. 19 In causation, it's not their experts. No expert's 20 going to get up there and say, "You caused these damages." 21 They're just going to say, "Based on this causation that 22 they proved" or didn't prove, whatever, "I calculate the 23 damages to be that." But that's a factual determination. 24 So there is no reason not to have the expert 25 report. If it's their decline in enrollment, well, if they 39 1 I think it's because of something that we did, you know, they 2 need to get that proved, but their experts are going to come 3 up with the numbers long before we are. 4 Thank you, sir. 5 THE COURT: Even though it's your motion, I'm 6 going to give him a brief opportunity to respond, if you 7 don!t mind. 8 MR. MANSFIELD: One last bit, Judge. 9 As Mr. Karrenberg pointed out, these schools 10 advertise in some of the — in some of the same publications. 11 They also have different publications. They go to high 12 schools, they try and seek some of the same population of 13 students. And there's obviously going to be some crossover 14 and some natural duplication between them. 15 And that's why this other column was so critical, 16 Judge, because it helps prove our causation. Without 17 causation, we can't get the damages. Now, Mr. Karrenberg 18 gave a good example of his closing argument, saying it's not 19 important and it's irrelevant. These are factual decisions 20 for the jury, Judge. That's what he's trying to argue to 21 you now. We think they're important, he thinks they're — 22 they aren't important. That's the argument he should be 23 making, Judge. But we feel they are and we feel they're 24 necessary. We have an obligation. It's our burden to prove 25 causation. This is needed. We can't get to our damage 40 1 until we can sufficiently get our arms around the causation. 2 We now have what we need. We didn't get it until 3 November. We'd ask for a brief period of time to complete 4 the depositions that we requested an<3 then expert reports. 5 THE COURT: Help me understand - before I let you 6 go, help me understand, with this additional name in this 7 single category that was additionally provided, the names of 8 (inaudible). 9 MR. MANSFIELD: They're what they call - what we 10 call admissions consultants. And I don't know their title. 11 MR. KARRENBERG: Your Honor, if I may have leave, 12 we have with us one of the officers of the company here, who 13 could explain it exactly. Would you like to hear from him? 14 THE COURT: What I'm trying to figure out is 15 whether or not the names that — they're saying that they now 16 have what they need, and I'm trying to figure out — 17 MR. KARRENBERG: Well, Judge, I - 18 THE COURT: - if that - no. If the information or 19 if that name is going to allow them to try to make this 20 causation claim that they're saying they can make. But 21 you're telling me no because they're not allowed to do 22 anything with the computer (inaudibld). 23 MR. KARRENBERG: That's my understanding, Your 24 Honor. 25 THE COURT: Give me an understanding of who - 41 1 MR. KARRENBERG: We can have it from the horse's 2 mouth rather than from me on what it is. 3 THE COURT: Okay. 4 MR. MANSFIELD: Well, Your Honor, I'm going to 5 object to this. I mean, we don't have anyone here to rebut 6 this. I mean, it's — 7 THE COURT: Well, here's the problem. You're 8 saying, "I was not given information. I asked for it, I was 9 delayed. I didn't get it till November. I don't have 10 anything I can do with any experts, and now I've finally 11 gotten my information." You know, that's pretty generic. I 12 want to see what information you were given additionally, 13 besides quantity, 5,000 to 8,000 - 14 MR. MANSFIELD: That's the duplication, not just 15 the total names. That's the duplication, Judge. That's 16 just a duplication. 17 THE COURT: All right. And so now I'm trying to 18 figure out, well, is this supplemental information or are we 19 providing new information? Now, new because they're new 20 names. But is it really new or is it just another category 21 that is worthless? 22 MR. MANSFIELD: It's new because of that 23 additional category of who added it. 24 THE COURT: That's what I want - that's your 25 representation of what it is. So, please, tell me what — 42 1 tell me what this is. 2 MR. SHELLY: I'm Brian Shelly. I'm vice 3 president, growth and development of Eagle Gate and Provo 4 College. And this additional column is just we've — they 5 call them admission consultants, we call them admission 6 reps. The additional column is just who was assigned the 7 lead for that. So if we have Student A, it's assigned to 8 admission Rack A. We have Student B, they're assigned to — 9 you know, admission Rack B. 10 So the additional column is just who the 11 representative is who's going to work that lead to enroll 12 them to school. 13 THE COURT: And so it's the information that 14 they've — if you know — received prior, in June and in March 15 and previously to this time period, did have those 16 connections of who the admission person was? 17 MR. KARRENBERG: No, sir. But there is - thank 18 you, Brian. 19 Here's one thing we ought to make sure. As Brian 20 just said to you, it's who'll decide. It doesn't say who 21 got the lead. Okay? It's not there. 22 THE COURT: It doesn't say who contacted the 23 person? 24 MR. KARRENBERG: How the lead came in, it doesn't 25 say that. So there's no information there that's going to 43 *.*.*.~*i**-^*~xr 2 other words, if you called up and said to Eagle Gate, "I 3 want to take a class," you call the front desk. They1re 4 going to enter you into the lead list; that I know, and one 5 of the few people who can. And then the column just says 6 who that person is assigned to. It doesn't — when they - 7 you get that additional column, it doesn't do it. And if 8 there's any additional names that are added, they already 9 had everything through June of 2007 the last time we updated 10 it and before we had everything up to the same date. 11 THE COURT: Well, that's what I'm hearing them 12 saying, no, they didn't. 13 MR. KARRENBERG: Well, Judge, that's not true, and 14 we got affidavits saying it. They had them the first time, 15 then in June, we gave more information which had up through 16 June. That's when we — we fixed it so that they could 17 manipulate it. 18 THE COURT: Okay. 19 MR. KARRENBERG: Thank you. 20 MR. MANSFIELD: Okay. Well, then, I'm hearing 2\ something different now than what I've heard before. We 22 were told, and what was represented to us — and so maybe we 23 don't have the information we need -- is these are the reps 24 who got these numbers and who added them. So maybe we don't 25 have now what we need, Judge. It is our representation that 44 Jftr^^-At^-^Jg^-Sfa.tw -*~ *<***•** . 1 was what it was. 2 MR. KARRENBERG: Wasn't told by us. It's contrary 3 to the — 4 MR. MANSFIELD: Well, that's what I asked for 5 specifically, and that was what was given to us, as a 6 representation that "this fulfills what we're required to 7 give you." 8 THE COURT: I'm going to take this one under 9 advisement and give you a written decision. That way, we'll 10 keep a paper record for benefit of all. 11 MR. MANSFIELD: Thank you, Judge. Appreciate it. 12 MR. KARRENBERG: Thank you, sir. 13 MR. WILCOX: Thank you, Judge. 14 MR. LILJA: Thank you, Your Honor. 15 (Whereupon, at 11:16 a.m., 16 the hearing was concluded|.) 17 I -oooOooo- 18 19 20 21 22 23 24 25 45 C E RTI FI GATE STATE OF UTAH ] ] ss. COUNTY OF SALT LAKE ] I, JERI KEARBEY, Certified Court Transcriber in and for the State of Utah, do hereby certify that the foregoing electronically- recorded proceedings were transcribed by me from an audio /video CD furnished by the Third Judicial District Court in and for Salt Lake County, State of Utah; That pages 1 through 45, both inclusive, represent a full, true and correct transcript of the proceedings held on January 22, 2008, and that said transcript contains all of the evidence, objections of counsel and rulings of the Court and all matters to which the same relate. DATED this 11th day of February 2008. ARBEY, ccir I hereby affirm that thQ foregoing transcript was prepared under my supervision and direction. Peggy Gr0\£&r^CSR, RPR / Notary 22 1,6,9 38 19 28 2129 5 30 18 39 21 cited 5 1 $ admission 9 10,25 43 5,5,8,9,16 basically 8 15 Citibank 11 2 $10 4 16 9 7 10 21 11 1 23 2 admissions 10 12 21 4 31 25 33 4 basis 11 714 3 CITY 3 1 36 14 35 2,8 37 3,13 41 10 bears 27 12 Civil 17 11 5 ads 36 15 because 5<5 7 5,14 9 4 13 23 20 8 claim 3 12,18 7 2,20,25 10 21 2 advantage 15 8 27 11,14 30 14,21 31 8,17,18333 13 23 2,3,5 26 24,25,25 27 2,15 '07 10 7 21 9,13,17 advertise 40 10 37 6,14 38 10 40 1,16 41 21 42 41 20 advertising 36 13 19,22 claiming 4 14 5 16 26 22 1 advise 8 22 before 7 13 12 13,15 14 24 15 3 claims 4 95 11 14 3 26 21 31 5 14 25 advisement 45 9 17 18 27 20,21,24 28 5 30 13,15, clarification 24 20 10:04 3 1 affidavit 7 14,16 8 6 9 2 10 15 13 23 34 5 37 1,22 40 3 41 5 44 10, class 44 3 10:38 24 18 10 37 7 21 clear 5 3 11 13 10:53 24 18 affidavits 22 4 44 14 beforehand 5 5 27 25 clearly 22 11 11 5 1,2,3 afford 11 3 began 5 9 clerks 3 22 11:1645 15 after 5 5,18 12 8 13 17 15 19 16 4 believe 8 25 12 11 15 4 25 22 27 client 7 22 9 18,21 22 21,25 15th 5 6 21 20 27 22 28 6 20 client's 11 10 18th 5 7 afterwards 21 16 benefit 45 10 clients 17 19 19th 22 17 again 10 15 besides 42 13 closing 40 18 against 3 12 35 17 better 35 21 co-counsel 33 16 ago 13 19 14 16 between 13 8 23 2140 14 College 3 14 14 8 335434 agree 32 11 35 3 beyond 25 15 College's 19 7 25 1 95 1824 ahead 3 21 big 12 5 13 2 26 21 column 34 14 37 2 40 15 43 4,6, 2004 4 12,19 5 6,8 10 8 27 20,24 allegation 27 18,23 28 4,13 bill 6 2 10 44 5,7 28 6,6 allegations 12 18 bills 30 22 columns 30 3 2005 12 21 allege 4 24 12 10 bit 40 8 come 11 9,13 12 6 37 25 39 13 2007 7 1 18 23 19 2122 17 24 7 alleged 12 5,12 board 38 1 40 2 44 9 alleges 4 16 book 22 5 comes 32 18 2008 3 1 allow 8 9 9 22 15 25 38 4 41 19 bookkeeper 10 6 commenced 27 21 20th 7 3 15 18 allowed 8 13 41 21 both 24 11 comment 3 7 29 16 22 3 1 almost 6 6 10 4 breached 11 10 committee 17 11 26 5 4,6 17 10 along 18 16 32 7 Brian 43 2,18,19 community 10 25 23 3 36 13 26th 13 16 14 23 already 19 14 28 17,19 30 12 38 brief 40 6 41 3 companies 10 25 28th 7 1 14 23 14 44 8 briefed 15 2 21:7 company 10 2441 12 amend 5 9 12 19 15 22 17 23,24 briefing 3 14 comparing 8 20 35 24 briefly 23 8 comparison 27 7 33 11 compel 5 18 12 14 13 15,16 17 3 1911 amended 15 25 bring 18 8 23,25 18 4,7,23 19 9,13 23 14 38 3,000 34 4 amount 4 14 10 22,23 12 17 16 3 bringing 3 12 12 13 compelled 12 19 30 16 4 27 1 31 8 broke 27 5 competent 7 10 30(b)(6 5 14 amounts 6 3 building 9 10 10 12 competitive 11 6,8,9 15 8 30th 25 8 analysis 13 1 17 18 burden 40 24 complaint 4 15,18,24 5 9 12 3,6, 31st 25 8 another 6 9 19 21 24 7 32 13 38 business 6 12 10 22 11 1 23 2 18 42 20 9,12,18 anybody 9 2 10 15 21 22 complete 9 1 13 21 15 6 16 4 24 anyone 42 5 5,11 26 6,7 30 15 31 13 35 16,21 calculate 7 9 10 16 39 22 5,000 28 19,23 33 17 34 6 42 13 anything 5 23 7 2,4 8 19 10 11 41 3 calculated 35 11 56 10 16 11 14 20 24 30 25 37 15 41 22 42 10 completed 15 20 calculation 5 4 6 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EAGLE GATE Page 18,25 42:3,7,17,24 43:13,22 44:11. dispute 11:14 eyes 5:19 Igroup 36:12 18 45:8 distinct 30:8 growth 43:3 Court's 22:24 document 5:13 14:10.11 26:6 guess 3:8.17 4:8 11:2 20:12 covered 28:8 documents 5:19 6:16.18 7:8 13:5, facing 38:14 guys 34:18 critical 32:2 34:4 40:15 14,15,17,19,24 14:12,19 15:11.11 crossover 40:13 18:1 22:13 23:10,20,21 25:22,25 fact 5:5,17 12:5 15:13,19.25 16:3 current 39:1 does 6:19 11:5 15:6 21:20 24:23 36:9,16,20 37:9,23 H cut 37:22 doesn't 5:22 6:8 22:21 37:19 43: 44:1 hack 27:4 cutoff 20:16 21:14,18 35:24 38:14 facto 25:19 hacked 27:5 20,22,24 44:6,7 Facts 5:13 7:17 11:14 hacking 27:3 doing 6:11 8:1220:18 factual 38:4 39:23 40:19 hadn't 8:17 dollar 30:23 fail 13:23 done 4:19,23 5:17 7:13 8:17 22: hand 8:13 32:6 damage 4:20 6:8 13:21,24 17:10. fair 16:24 17:2 happen 17:10 18 27:10 29:5 33:14 35:14,16 40: 11,21,22 double 34:18 fairness 16:17 happened 8:7 17:13 31:1 25 faith 11:9 12:11 hard 16:12 21:11 23:21 24:12 S damages 4:14,16,22,24 5:10,23 6: double-teamed 29:10 doubt 32:15,17 far 5:23 19,23 36:14 16,20,23 7:10,16 9:7 10:14 11:11, fault 10:9 32:21 hard-fought 14:14 16:16 13,25 12:4,6,11,18,23 13:3,4,9 14: down 8:19 14:11 27:8 32:18 downloaded 27:6 33:6 favor 12:2 16:23 having 21:19 23:2 3 15:10 17:16 18:122:13 23:4,5 February 18:11 hear 38:5 41:13 27:8 32:5 35:4,5,6,22 38:20 39:20, downward 21:2 Dozens 34:1 feel 40:23,23 heard 17:8 44:21 23 40:17 few 13:18 24:14 44:5 hearing 8:18 44:11,20 45:16 data 22:18,19 23:22 24:10 dragging 23:1 drive 21:11 fight 20:7,11 help 3:21 4:6 27:8 39:15 41:5,€ database 8:2,3,8,11 19:1,8,9 23: figure 9:22 41:14,16 42:18 helps 32:12 40:16 11 27:17,18,20 33:6 39:5 drop 3:22 26:22 33:14 dropped 33:3 figures 30:24 33:14 35:11 Henager 3:12 9:6,7 12:3 14:7 C date 19:22 27:22 28:3 32:13,13, fife 7:2 13:14 16:6,22 17:15 21:8 25 16,16,19,20 35:17,24,24 36:1 38: due 7:3 10:7 36:1 duplication 31:6,8,11 40:14 42: filed 4:3,12,18 10:7 12:9,14 13:17 here 7:24 8:17 11:4,9 14:15 15 14 44:10 14:21,23,25 15:4 21:9 23:14 24:9 26:21 29:1138:17 41:12 42:5 dated 5:6,7 14,15,16 25:1,7 during 20:1,14 Here's 3:25 18:15 20:19 30:14 dates 14:25 24:22 36:2 filing 7:1 7 43:19 day 20:23 finafl6:9 35:21 high 36:14 40:11 days 14:16,24 16:4 25:11,18 35: finally 24:11 42:10 hire 10:5 17:17 25 each 17:236:15 financial 14:1820:17 hired 33:4 de 25:19 Eagle 3:13 19:7 32:1 33:4 43:3 financial; 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EAGLE GATE Pa< interrogatories 5 13 6 21 14 9 like 5 20,24 6 6 15 3,12 16 11,13 moved 5 3 17 22 35 23 23,24 16 4 17 1,8 24 23 35 12 [involving 3 8 18 8 29 23 30 22 33 11 41 13 Ms 3 8,12 14 5,6 18 13 19 20 20 4 ordered 16 20 23 14 24 9 irrelevant 40 19 Lilja 22 17 23 9 24 2 26 3 28 21, much 109 11 1831 11,11 34 1 orders 22 25 issue 12 13 24 29 13 34 4,9,14 45 14 38 22 ordinarily 31 12 issues 13 2 30 4 32 5 list 8 2,4 13 6,7 18 5,10 19 3 27 2, must 4 23 original 8 2,11 item 9 21 3,7,7 28 12,12,14,17,20,20,22 31 originally 10 20 items 39 17 13,17 33 8,10 36 10 39 5,6 44 4 N other 21 13 22 7 28 15 32 4 34 2 listed 16 2 name 37 12 38 16 41 6,19 36 16 37 9 39 3,17 40 15 44 2 lists 26 19,20 27 23 28 5 33 6 36 names 8 21 22 6 28 11,12,17,19, ought 43 19 Jana21 11 13 23 29 2,2,3 31 6 33 7,7,17 34 6 ourselves 17 19 JANUARY3 1 litigation 4 12 11 8 14 3 15 7 22 36 10,11,20 37 18 38 18 41 7,15 out 3 22 5 15 9 22 12 5,7 14 22 Jennifer 3 5 23 39 12 42 15,20 44 8 16 17 22 16 23 1 27 12 29 8,14 job 22 8 39 7 little 29 11 31 3 Nathan 3 4 34 13,20 36 19 39 15 40 9 41 14, Johnson 8 6 37 7 logically 10 13 natural 40 14 16 42 18 journal 6 3 long 5 96 12 16 12 32 3 40 3 nature 26 10,12,18 27 14 28 7 30 out-of21 11 Judge 3 16,18,24 4 4,11,22 5 19 longer 30 23 6,9 outlined 19 15 6 2,6,25 7 3,6 8 1,25 9 13,16 10 look 8 16 19 10 20 6 22 4 necessary 3 16 12 25 13 20 40 24 over 4 16 8 24 15 6 21 1 23 2 20 11 6,19 12 5,10,16,20,21,22 13 looked 16 13 21 7 3311 need 3 7 7 13 8 2 10 14 13 24 14 own 33 9 4,19 14 14,20 15 6 16 8,9,12,14, looking 4 1 18 17,20 21 19 25 18 12 15 5,6,14,21 16 9,10 17 17 20 owner 9 6 14 7 17,25 17 4,10,23 18 14,22 19 17, looks 5 24 6 6 21,24 21 3 22 11,1233 10 39 10 25 20 5,19,25 21 6,19 22 6,15,20 lost 10 24 40 2 41 2,16 44 23,25 23 3,8,17,18 24 17,25 25 16,23 26 lot67,12,1311 313514 1425 needed 15 11,20 21 10,14 26 7 page 4 25 5 22 9 5 18 24 19 10,1 9,17,2129 7,8,11,20,25 31 4,18 22 31 24 36 10 27 6 33 1 39 2 40 25 36 15 37 11 32 2,15,18 33 2 34 3 35 3,7,13,20 needs 13 1 pages 5 20 36 21 37 9,24 38 8,25 39 7,11,14 M nefarious 28 16 paper 45 10 40 8,16,20,23 41 17 42 15 44 13, mad 17 12 never 4 5 24 23 25 1 36 8 paragraph 9 12 19 4,11 23 19 25 45 11,13 made 12 18 17 23 19 2 31 17 33 Neverending 38 17 parcel 35 14 judgment 3 15 4 9 7 7,7 11 24,25 13 37 22 new 9 9,20,23 10 10,12 12 13 15 parents 20 2 12 1 13 11 14 1 16 23,25 maintain 8 4 1 17 1 20 25 36 23 42 19,19,19,20, part 15 12,22 31 6 35 13 July 7 3 13 16 15 4 18 18,22 25 1, make 10 3,6 12 5 17 10 18 7 24 22 partial 3 15 C"JO 2127632 1233 11 37 11 41 19, next 3 22 14 18 25 24 36 15 38 18 party 17 2 jump 10 13 13 25 20 43 19 night 8 20 36 16 past 7 6 32 13 June 7 1 10 7 12 21 14 23,23 19 makes 17 12 21 5 non-expert 7 16 Pause 24 18 2121 18 23 13 24 7 26 4 33 23 making 6 12 12 16 40 23 None 9 2 11 15 .pay 10 10 37 1 43 14 44 9,15,16 manipulate 8 5,10 44 17 nonsense 8:1 payment 6 2 jury 35 18 40 20 manner 19 14 28 16 normal 8 16 pencils 8 20 justice 16 18,24 MANSFIELD 3 17,24 4 4 11 19,21 notably 6 18 people 6 14 15 20 17 12 20 25 21 16 8,16 23 8 24 17,25 25 8,13,15, note 3 22 22 22 7 30 19 36 12 37 13 38 18 21 26 3,13,17 28 25 29 7,10,20,25 noted 11 23 15 9 18 23 44 5 K 30 2,10 31 3,16 32 14,24 33 2,18, nothing 7 2 10 18 32 8,11 37 14 l percent 36 11 KARRENBERG 3 4,4,10 4 8,10 6 20,23 34 3,12,17,19,21,24 35 2,13 38 19 percentage 36 24 2,67 23 8 25 11 22 127 13 14 14 36 4 40 8 41 9 42 4,14,22 44 20 notice 4 25 15 4 21 22,24 J perfectly 8 1 15.22 15 9 17 7 18 12,19,22 19 24 45 4,11 noticed 15 2 perform 38 4 23 18 24 1,16 25 4,5 29 8,12,16, many 10 25 notices 3 25 period 21 10 41 3 43 15 18.23 31 24 32 4 36 5,6,8 37 2,6, notions 16 24 [periods 28 9 17,2138 8,25 39 2 40 9,17 41 11, March 21 9,13,17 34 11 38 14 43 14 November 5 6,7 12 8 13 18 15 12 ! permitted 16 18 17,23 42 1 43 17,24 44 13,19 45 2, 18 11 23 16 25 23 26 1,5,6,8 28 1, !perso n 24 2 43 16,23 44 6 12 market 32 20 marketing 35 8 36 12 1,22 30 4 33 1,22,24 34 12,13 36 I persons 37 13 keep 45 10 25 38 7 39 1 41 3 42 9 |persuasiv e 32 5 kids'38 16 matter 6 19 11 23 20 24 29 4 may 18 16 19 2 23 8 27 20 28 5,6, now 4 11 5 3,12,18 7 2,20 9 3 10 phone 22 5 kind 3 10 4 17 7 15 12 24 25 19 841 11 3,20 11 24 12 22 13 13 14 2 15 11 pick 36 14 Knecht21 12 maybe 44 22,24 17 22 19 25 20 19 21 16,21 23 23 picture 8 12 knew 20 23 22 8 39 16,17 pie 31 23 32 2 know4 2 6 11 7 59 16 10 24 13 mean 23 24 25 6 26 17,19,23 27 24 12 25 16 30 21 32 3,9 33 15 10 34 2 35 6 38 17 39 15 42 5,6 34 6,13,24 36 7 37 12 40 17,21 piecemeal 35 15,23 2,3 14 4 19 18 20 6,11,22,23,25 pin 27 8 21 2,16 22 3,21 23 23 27 12,13 means 17 12 41 2,15 42 10,17,19 44 21,25 medical 30 22 number 5 15,21 32 13,13,16,17 [place 17 1 39 4 28 3 29 6 30 25 31 7,9,22 32 1,15 placed 9 6 33 9,10 34 1,8,13,17 35 7,8,17,19, memo 4 25 9 5 numbers 30 20 32 10,12,15,19 memorandum 9 6 10 19 13 18 33 3 34 1 35 14 40 3 44 24 plaintiff 4 14,15,21,23 5 8,11,16 25 37 24 38 16,17 39 7,17,18 40 1 ! 41 10 42 11 43 9,14 44 4 19 16 18 25 19 8 knowledge 9 16 memos 4 1 22 4 Plaintiff's 9 8 12 3 19 12,15 mentioned 11 22 23 16 .plaintiffs 8 9 object 42 5 plaintiffs'9 10,13,25 merely 30 15 obligation 40 24 might 29 22 plan 7 24 LAKE 3 1 observed 19 5 play 16 24 Miller 3 8,12 obtain 4 20 large 23 3 Miller's 21 11 Please 11 21 42 25 Iast9 11,24 20328 1 39 13408 obtained 28 15 I plus 39 12 million 4 16 9 8 10 21,21 11 1 23 obviously 4 17 11 525 15 31 5 44 9 2 point 3 17 24 3 25 17 29 1,8,14 late 8 19 14 15 16 22 36 16 40 13 '34 5 35 18 mind 30 7 40 7 October 4 12,19 10 7 lately 11 3 minute 18 9,15,17 28 25 39 13 pointed 12 7 14 22 21 2 40 9 later 11 1 35 17,20 off 11 2 37 22 points 22 16 misrepresents 18 7 office 37 25 lawsuit 17 15 27 21 missed 4 3 population 40 12 lead 8 2,4 13 6,7 18 5,10 19 3 26 officers 41 12 .portion 35 4 missing 7 14 Oh 3 24 13 25 39 14 19,20 27 2,3,7,7,23 28 5 31 17 33 modifications 19 2 possible 4 20 Okay 16 16 19 24 20 18 22 19 26 practice 12 10 17 9 6,8,10 36 13 39 5,6 43 7,11,21,24 moments 24 15 10 28 23,25 30 5 32 14 35 10 36 44 4 money 6 7 preliminary 17 18 21 37 5 38 9 42 3 43 21 44 18,20 present 17 2 leads 33 17 money's 14 15 one 11 22,23 13 2 17 9 18 18,22 leap 10 3 president 43 3 month 12 8 19 20,21 20 23 22 7 26 21 27 12 learn 20 12 months 12 8 13 19 15 19 25 19 presidents 14 7 29 8,14,16,22 30 1,4 31 5,19 32 pretextua!22 10 least 5 2 more6 79 12 10 23 11 3 21 6,16 13,14 33 10,18 35 18 37 2,9 38 8 leave 4111 23 12 28 21,23 31 3 37 22 44 15 pretty 42 11 18 40 8 41 12 43 19 44 4 45 8 Previously 12 14 43 15 leaves 4 8 Morning 11 19,20 ones 34 11 37 15 ledger 5 24,25 6 5 18 3 Moss 14 6 prior 14 21 26 8 34 11 35 23 36 1 left 16 3 most 4 13 14 11 ongoing 14 20 [43 14 legitimate 16 19 only 5 18,20 6 16 8 4,7,12 13 23 motion 3 7,15,16,21,23 4 9 5 18 20 1321 11,12,1328 13 36 10,18 probably 21 7 legitimately 15 9 7 7,7,11,18 10 16 11 14,16,23,23, ooo0ooo3 2 45 17 problem 6 25 20 6,18 34 10 38 2 lesson 20 12 25 12 14,20 13 11 14,15 14 25 15 ,42 7 44 1 let 16 5 17 7 23 19 29 8,14,21 41 1,13,22 16 25 17 22 23 24 25 18 3, opinion 26 16 Procedure 17 11 5 7,8,15,23 19 12 20 19 21 8,9 22 20 opportunity 17 2 40 6 proceedings 24 18 let's 9 13 37 11 23 3,6,14 24 9 37 23 38 9 39 9 40 oppose 3 8,19 produce 13 13 16 20 21 25 24 10 letter 3 11 5 76 9,15,16 15 16 16 opposed 13 15 produced 14 10,19 16 20 19 21, 5 opposing 3 23 2 21 25 22 16,17 23 9,10,19 24 3,3 motions 5 14 6 13 22 23 12,20 24 7,10 letters 5 14 6 10 opposition 7 3,5 13 11,17 production 19 6 mouth 42 2 order 11 12 13 4,20 14 22 15 1,5 light 9 18 move 7 6 36 1 program 8 5 STEVENS HENAGER v. EAGLE GATE Page prohibit 26:14 rights 11:10 sophisticated 31:3 27:18,21,22 31:7 32:15 34:9 3( proof 23:5 Rob 28:19 sorry 16:21 23 40:13 43:25 44:8 proprietary 8:15 Roth 12:16,20 17:24 sort 5:4 11:6,7 Thereafter 6:21 prove 11:10 32:23 39:22 40:16,24 rudimentary 4:1314:11 specific 12:6 therefore 7:15 14:1 28:13 proved 39:22 40:2 Rule 5:1,2,3,4,5 7:11,12,18,19 10: specifically 6:22 19:6 45:5 they'll 14:18 provided 8:3 9:13 19:14 22:18 23: 16 11:13 12:24 17:10 22:20 specificity 7:10 they've 11:2,12 14:4 20:522:1 16,22 24:4 31:1 32:8 35:21 38:3 ruled 24:23 25:2 specified 12:17 27:11 28:17,18 29:1,2,4 37:12 41:7 Rules 12:25 17:11,12,21 22:24 Spock21:1 12 43:14 providing 42:19 ruling 15:3 spreadsheet 8:8,16 13:6 19:19 thing 8:4,7 9:25 10:12 29:9,14 proving 33:13 running 30:17 spring 26:2 33:19 10 37:9 43:19 Provo 19:7 43:3 stake 14:15 things 21:10,1127:17 publications 40:10,11 stalled 27:11 think 3:16 9:4 10:9 11:10 16:2 purpose 16:1 19:1 said 3:11 4:21 8:2 13:14 14:15 15: start 4:1 17:8 20:7,15 22:5 23:6 25:6,7,5 purposes 33:9 12 17:22 18:6,24 21:10 29:23 35: started 10:5,21 28:19 31:11 35:13,20 40:1,21 pursuant 15:16 18,19 36:8 38:10 39:9 43:20 44:2 starting 26:15 30:17 thinking 16:15 37:19 put 8:11 17:1 34:5 37:3,6 SALT 3:1 starts 5:21 18:2 thinks 40:21 I puts 37:8 same 8:14 9:25 10:12 12:1628:8 state 21:12 Thomas 3:4 30:12 36:11,12,12,15,16,20 37:11 Statement 5:12 those 5:8 10:6,16 13:15 14:4,6 Q 40:10,12 44:10 statements 10:18 20:18 11,17,18,20 17:12 20:5,17 21:1 quantity 42:13 satisfying 7:12 stating 13:11 23:4 32:19 33:6,7,13 34:1,5 35:9,11 question 24:21 25:24 27:17 37: say 13:25 16:13,21 18:5 20:6 24:3 step 16:21 2 38:5,22 43:15 10,23,24 38:3 28:20 32:25 33:15 39:14,20,21 43: Stevens 3:11 9:6,7 12:3 14:7 31: though 4:15 7:17 20:7 38:3 40 uestions 24:19 29:22 32:4 20,22,25 25 Thousands 34:2 QtuickBooks 5:24 saying 7:12,14 9:2 10:14,16 14:18 still 4:13 11:1 14:19,20 23:13 three 10:4,4 14:6 32:5 39:11 21:25 22:17 23:10 28:11 35:18 37: stipulate 3:11 14:24 throughout 14:2 14 38:6 40:18 41:15,20 42:8 44: stole 27:2,5 28:15 thrown 20:12 story 38:16,17 tie 31:19 Rachel 8:6 37:7 12,14 says 5:1 6:10 19:25 38:10 44:5 struggling 30:14 till 18:11 42:9 Rack 43:8,9 Student 43:7,8 time 3:22 4:17 6:12 7:6 10:3 1 raised 23:9 scheduling 11:12 15:1,5,23,24 17:124:23 students 31:9 36:17 40:13 15:13 16:4,12 22:19 23:3 28:8 raising 9:3 stuff 11:3 1 35:17 36:16 39:1,12 41:3 43: rather 6:12 20:7 35:15,22 42:2 school 6:4 36:18 43:12 schools 31:10 36:14,18 40:9,12 subcommittee 17:13 44:9,14 reach 35:7 search 8:9 28:18 submit 4:1 11:16 15:4 22:1 timely 35:23 36:1 read 20:20 23:19 submitted 8:6 15:2 25:1,6 title 41:10 reads 19:4 season 20:2 second 5:22 9:21 19:4,20 23:19 submitting 31:9 Todd 21:12 really 10:24 26:18 27:9 32:6,8 34: subsequent 23:11 together 39:10 2 36:17 37:14 38:23 42:20 seconds 7:24 secrets 26:24 substance 37:14 told 6:23 14:2 17:25 44:22 45:: reason 8:9 15:22 21:12 22:10 32: substantial 16:17,24 23:15 30:2 tool 11:6,8,9 19 33:3 39:24 see 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EAGLE GATE P; V value 35:7 various 5:16,21,23 version 22:18 24:5,6,7,12,12 versions 26:5 very 11:18 16:20 23:8 31:17 32:2, 5 vice 43:2 viewable 26:6 violates 16:24 violation 5:2,2 visors 8:20 voluntarily 13:13 W Wait 29:10,12 waiting 25:21 walk 37:25 want 18:1620:10,11,1421:1622: 3,21 31:22 37:24 42:12,24 44:3 wanted 24:21 35:15 38:19 wasn't 13:18 20:13 22:22 26:18 45:2 way 8:12 10:13 11:2 25:15,19,20, 21 27:12 28:13 29:3 32:7 45:9 we'll 45:9 we're 4:2,11 11:4,24 13:8 14:19 15:9 16:10 20:9,17 22:23 24:19 25:9,15,17 26:21,22 27:23 30:25 32:2134:7 38:14 45:6 week 25:23 38:18 Weekly 36:15 weeks 14:19 weigh 30:6 Well 3:10 7:21,22 8:1 9:13 13:25 16:11,21 18:14,24 19:20 20:17 25: 13 26:13 29:12 35:13,18 36:8 38:8 39:25 41:17 42:4,7,18 44:11,13,20 45:4 what's 13:20 20:19,25 21:3 38:16 whatever 39:22 whatsoever 6:9 Where's 22:20 Whereupon 45:15 whether 38:3 41:15 who'll 43:20 who's 43:11 Wilcox 3:4 15:1622:3,1627:16 28:10,23 29:1 45:13 Wilcox's 16:2 will 3:11 9:12 10.1 14:13 17:16 within 9:15 35:3 without 5:17 10:17 27:12 40:16 withstand 10:25 witnesses 21:21 word 29:19,24 words 44:2 work 7:19 17:14 21:22 22.1 27:11, 13 43:11 working 15:15 16:9,10 21:24 27: 10 works 34:20 worthless 42:21 wouldn't 14:24 35:16 write 6:14 9:11 writing 11:2 written 45:9 wrote 24:2 Y year 411 15:5 22:23 28:2 33:19 years 10:4,4 11:1 20:3 39.12 yet 4:21 10:2 STEVENS HENAGER v. EAGLE GATE Tab I IN THE DISTRICT COURT OF THE THIRD JUDICIAL DISTRICT IN AND FOR SALT LAKE COUNTY, STATE OF UTAH STEVENS-HENAGER COLLEGE, : MINUTE ENTRY Plaintiff, : CASE NO. 040921860 vs. : EAGLE GATE COLLEGE, PROVO COLLEGE, : MOSESE IONGI, TREVOR SMITH, WALLACE ROGERS, RICHARD HORWITZ, STEVEN TODD KNECHT and JANA MILLER, • Defendants. The Court has before it the Plaintiff's Motion for Relief From or For Reconsideration of the Court's Order on Summary Judgment. Having reviewed the moving and responding memoranda, the Court rules as stated herein. After considering the parties' respective positions, the Court determines that the Plaintiff's current Motion, with respect to the issue of damages, is simply an attempt to re-argue or bolster the arguments made in its original opposition. However, even considering these re- arguments, the Court remains convinced that the Plaintiff had adequate information such that it could submit timely expert reports (even if on a preliminary basis) to substantiate damages. The Plaintiff's ability STEVENS-HENAGER COLLEGE V. EAGLE GATE COLLEGE PAGE 2 MINUTE ENTRY to provide such a report shortly after the Court rendered its summary judgment decision (with no additional discovery) confirms this reality. The Court further concludes that the Plaintiff has not met the standard for excusable neglect. It was simple inaction and lack of diligence on the part of the Plaintiff that led to the Court's ultimate decision to grant summary judgment. The Court can find no legal or factual grounds to reconsider this decision. There is an issue, however, as to whether the Plaintiff's equitable claims were subject to the Defendants' Motion for Summary Judgment. It does not appear that the Plaintiff's equitable claims were part of the Defendants' initial Motion, which was geared primarily to the lack of evidence to substantiate the Plaintiff's damages claim. The Court agrees that it was improper for this aspect of the Plaintiff's claims to be dismissed in a summary fashion, when the issue of whether the Plaintiff is indeed entitled to injunctive relief has never been fully briefed. The Court concludes that those claims survive. To the extent that the Court's prior Order may be inconsistent with this, it should be modified to accurately reflect that the equitable claims were not subject to the Motion for Summary Judgment. In closing, the Court notes that the Defendants have raised legal arguments as to the viability of the Plaintiff's equitable claims. Such STEVENS-HENAGER COLLEGE V. EAGLE GATE COLLEGE PAGE 3 MINUTE ENTRY arguments are more properly brought in the form of a dispositive motion, rather than an opposition to a Motion to Reconsider (particularly where those arguments were not made in the underlying Motion for Summary Judgment). The Court will not consider the substantive merits of those arguments in their current context. This Minute Entry decision will stand as the Order of the Court, granting the Plaintiff's Motion to Reconsider in part and denying it in part. Dated this _day of May, 2008. ^A^ ROBERT P. FAUS1 DISTRICT COURT JT 90» STEVENS-HENAGER COLLEGE V. EAGLE GATE COLLEGE PAGE 4 MINUTE ENTRY MAILING CERTIFICATE I hereby certify that I mailed a true and correct copy of the foregoing Minute Entry, to the following, this / Robert E. Mansfield Scott M. Lilja Lisa B. Bohman Attorneys for Plaintiff 36 S. State Street, Suite 1900 Salt Lake City, Utah 84144 Thomas R. Karrenberg Nathan B. Wilcox Jennifer R. Eshelman Attorneys for Defendants Eagle Gate College, Provo College, Horwitz and Miller 50 W. Broadway, Suite 700 Salt Lake City, Utah 84101-2006 Wallace Rogers 4376 South 2675 West Roy, Utah 84067 Mark N. Brian Attorney for Defendants Iongi and Smith P.O. Box 173 Spanish Fork, Utah 84660 Tab J -'"•'"JD Mftocr •JY Robert E. Mansfield (6272) Scott M.Lilja (4231) Lisa B. Bohman (10733) VAN COTT BAGLEY CORNWALL & MCCARTHY 36 South State Street, Suite 1900 Salt Lake City, Utah 84144 Telephone: (801) 532-3333 Facsimile: (801) 534-0058 Attorneys for Stevens-Henager College IN THE THIRD JUDICIAL DISTRICT COURT OF SALT LAKE COUNTY STATE OF UTAH STEVENS-HENAGER COLLEGE, Plaintiff, MEMORANDUM IN OPPOSITION TO DEFENDANTS' MOTION FOR vs. SUMMARY JUDGMENT BULLEN & WILSON, LLC, dba EAGLE GATE COLLEGE; CECELIA WILSON dba PROVO COLLEGE; MOSESE Case No. 040921860 IONGI; TREVOR SMITH; WALLACE ROGERS; RICHARD HORWITZ; Judge Faust STEVEN TODD KNECHT; JANA MILLER, Defendants. Plaintiff Stevens-Henager College ("Stevens-Henager"), by and through its counsel of record, submits its Memorandum in Opposition to Defendants' Motion for Summary Judgment. INTRODUCTION AND PROCEDURAL HISTORY On October 18, 2004, Plaintiff filed its complaint and jury demand alleging breach of contract, violation of the Uniform Trade Secrets Act, interference with prospective economic relations, violations 633 370534vl V*\\ Interrogatories requesting damage calculations and supporting facts, and (d) has not identified or provided reports form any purported experts who Plaintiff has repeatedly claimed "would provide a calculation and analysis of the damages." RESPONSE: Disputed. Plaintiff produced documents supporting its damages. See Defendants' Statement of Undisputed Fact No. 16. Plaintiff has identified the basis for its damages and will supplement its Initial Disclosures and discovery responses as soon as Defendants provided the Court-ordered documents and in accordance with an amended scheduling order. See Second Mansfield Aff. at ^f 11. Carl Barney provided an estimate of Plaintiff s damages and the factual basis for computation of that estimate. Plaintiffs representatives have provided substantial factual evidence of Plaintiffs damages as shown by the following deposition testimony of Carol Gastiger, Vicki Dewsnup, and Carl Barney: Carol Gastiger: Q: I want you to tell me what facts you're aware of that would support an allegation Eagle Gate College or Provo College caused damage to Stevens-Henager. A, I think the loss of the Tongan population. I think the money we extended on it. I mean in very real dollars. And in very non-real dollars, in time and in effort. That are not in specific dollars. I believe that when you lose a very competent Admissions Consultant you lose production for a period of time. That results in - let's say that I replace Tecia and the other person starts five people a month. Tecia is averaging eight. That's a total of nine people in a given three-month period of time, if this other person ever gets as good as Tecia. 22 633 370534v1 7A You multiply that time tuition. That's money - real money, in my opinion, that's been lost. Those are real dollars, I think. Dep. of Carol Gastiger at 105:2 - 20, relevant portions attached hereto as Exhibit N. Vicki Dewsnup Q: Can you tell me what it is that you claim to be the "tremendous damage" that has been caused? A: There's extensive costs incurred in advertising and marketing. We continue to use any leads that come into the college from time to time, and with the loss of adequate phone numbers due to admissions by Mr. Rogers, it became difficult, if not impossible, to use our own leads. Q: Has there been any additional damage that you would characterize as "tremendous damage" as you did in your affidavit, Exhibit 84, since the time of your affidavit in October of 2004, or your deposition in January of 2005? A: I currently have not been able to compare the lists of leads between Stevens- Henager and Eagle Gate or Provo College.1 Q: As I understand it, the damage that you claim to be "tremendous' in your affidavit of October 2004, and in your deposition in January of 2005, is an economic damage, is it not? 1 Defendants' list of potential students and financial documents were produced pursuant to the designated of attorney's eyes only, which precludes Plaintiffs employees from reviewing them or comparing them in any way to Plaintiffs financial documents or Lead List, further preventing Plaintiff from calculating the damages incurred. 23 633 370534vl A: There was economic damage, certainly, and also damage to morale at the campuses affected. Q: Any other damages that you would constitute or you would consider to be "tremendous damage" as referred to in your affidavit and your deposition testimony? A: There was loss of employees. Dep. of Stevens-Henager College (Vicki Dewnsup) at 8:17 - 9:21, relevant portions attached hereto as Exhibit O. Carl Barney Q: Do you have an opinion as to what the damages are suffered by Stevens-Henager as a result of the alleged conduct of the defendants in this case? A: Many million of dollars. Q: When did you form that opinion? A: At the time that all of this was revealed, the bad acts of Eagle Gate and Provo College were revealed to me, and connecting with the loss of the starts, that's when I formed that opinion. Q: Many millions of dollars? A: Correct. Q: Are we talking more than $ 10 million? 24 633 370534vl "33 A: It could be. Q: In forming that opinion, what factors or facts did you consider? A: The damage to at least two of the campuses, Provo and Ogden. Q: In damage, you mean the decline in the number of starts? A: The decline of starts. The decline of the morale. The struggle. The losses. The economic losses. The effort. The cost of rebuilding. Q: What were the economic losses? A: The loss of starts, which then would result into an income stream over three or four years. The cost of hiring and training new people. The efforts to rebuild the admissions department. Where we would be today had this not - this impact not occurred. Dep. of Carl Barney at 143:12-144:24. ARGUMENT Summary judgment is proper only when no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Utah R. Civ. P. 56(c). This Court must view the disputed facts in the light most favorable to the non-moving party, drawing all reasonable inferences in its favor. Summary judgment is not appropriate when, as here, a reasonable jury could find for the plaintiff. Anderson v. Liberty Lobby Inc., 411 U.S. 242, 248,106 S. Ct. 2505 (1986). The testimony of Carl Barney established Plaintiffs good faith estimate of damages and the factual basis for that estimate. All reasonable inferences regarding Mr. Barney's estimate must be drawn in favor of Plaintiff. Furthermore, Plaintiff has established the factual basis for its damages 25 633 370534vl 33?