Hercules Capital, Inc. v. Gittleman et al, No. 9:2016cv81663 - Document 95 (S.D. Fla. 2017)

Court Description: ORDER AND OPINION DENYING CROSS-MOTIONS FOR PARTIAL SUMMARY JUDGMENT, denying 51 Motion for Partial Summary Judgment by David Barclay, Daniel Gittleman, Howard A. Kwon; denying 53 Motion for Partial Summary Judgment by Hercules Capital, Inc.; denying 82 Motion to Strike (Bench Trial set for 8/7/2017 before Judge Donald M. Middlebrooks, Calendar Call set for 8/2/2017 at 1:15 PM before Judge Donald M. Middlebrooks). Signed by Judge Donald M. Middlebrooks on 7/27/2017. (lrz1)
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Hercules Capital, Inc. v. Gittleman et al Doc. 95 I THE UNI N TED STATES DI STRI COURT CT FO R TH E SOUTHERN DI STRI O F FLORI CT DA Cas No.9: CV- 663- M e 16- 81 DM HERCULESCAPI L,I ( K/ TA NC. F/ A HERCULES TECHNOLOGY GROW TH CAPI TAL,m c., ) Pli if a ntf, DANI J. TTLEM AN DAVI BARCLAY, EL GI D ANDHOWARDA. KWV , Def nda s e nt . / ORDER AND O PI ON DENYI CROSS- O TI NS FO R PARTI SUM M ARY NI NG M O AL JUD G M ENT THI CAUSE c me b f r t eCo r u o co smoi n f rp rils mma yj d me t S o s eo e h u t p n r s - to s o a t u r u g n, a fl by Pli if Hec e Ca tl I (/ a Hec e Te i ogy Gr wt Capia,I ) ied antf ruls pias nc. fk/ ruls cmol o h tl nc, (d ec ls' a d dd r ue ' M o in' rs e tv l) ( 5 ) a d b De e d n s Da e id ru e' n i ec ls l l to , e p ciey DE 3 n y fn a t nil ' Gi lma tt tlma ' Da i Baca (Baca ' , ndHo r A, n(i n' (o eh r t e n t te nl, v d r ly i r ly' a t Gi l ) wa d Kwo 1 Kwo ' tg t e, ) d fn a t'a d' fn ns M oi n' ( 51.Ea hM oi nh sb e f l b ifd Fo t e i e d n s' n û e da t ' to ' DE ) c to a e n ul ree . r h De De ) y r s sa e bel , bo h He c e 'M o i a Def nda s M oton a e de e l ea ons tt d ow t r uls ton nd e nt ' i r nid. 1 . BACKG RO UND Thi a ton co e ns a alege cvi cons r c bewee a m ir pr en a i by s ci nc r n l d i l pia y t n nd se es t tons ofi e s of a c por ton, whi h pur re y r s t d i fna i l ha m t t c or ton' fc r or a i c po tdl e ule n i nc a r o he om a i s 1n a to Defnda s Motont Sti Pli ifsRe y( 82)i deni be us t acua l ddiin, e nt' i o rke antf pl DE s ed ca e he t l txt t t e ee d t t n pag lmi wa a one s nt nc ge rc conc uson upon whih t e ha xc de he e e i t s - e e e ne i l i c he Cour di notr y. Net r di t Cour r l o t a lgedl ofe ng e bi a t he t t d el ihe d he t e y n he le y f ndi xhi t tac d o He c e R e y. Re a e y, i t i Re y i s r ul s' pl l t dl n he r pl n uppor of t i M oton f Pari Sum m a y t he r i or tal r J me ( 79) Def nt s e t srke a s e nt e trpor a c ran us of udg nt DE , enda s e k o ti upplme al xper e t nd e ti e de ii t tmony. Tha i de e b a et r s wascombi d wih t rRe y a no poston esi t s nid ec us he eque t ne t hei pl nd t s r t l fld a a m o i epa ae y ie s ton. A pary c nnot mov f r new or a tona r i i a r pl t a e o ddii l elef n e y s uppori is own pr vi l fld moton, Se Hor v.Pote , No.07- 1 29,2009 W L tng t e ousy ie i e ne tr 6 8 1 67 a #1 n. ( D.Fl M a .11 20 ( e 06 086, t , 2 S. a. r , 09) Rosnbaum, . ) M J.. Dockets.Justia.com prncpa lnde . He c e i a S nt e de l r't ts i i s i l nst t gh- r w t i i le r r ul s s t ur bt ende ' ha pecalze n oa o i ve hi g o h, imovai ve ur - c d c r tve nt eba ke ompanis'i t de e ' n he t chnol a lf s i esi tis' ( 42, t ogy nd ie cenc ndusre .' DE S e o d Ame d d Compan ' o $ mp .'a ! 3 . l i a ctz n o b t M ayln a d i cn s ne lit r i ' Co 1, t ) t s iie f oh r a d n ' Caio a (d..No pat Op n e k Ic (ç e pe k' i an w- a krp s fwaed v lp r l mi. l 4 n ry e p a , n . ' n a ' s o b n u t o t r e eo e f op ) t a f c e o p o i ig i bl c b re u i s lto s' (d. t! 4 1 9 DE 51a 1. Is h t o usd n r v dn d ie y e sc rt ou in . 1 a ! , 5 ; mo y ' t) t ' or pr q' known a Adva ed Devie Applcai Ma ge nt (W DAM' ,wa a ' e oduc ' c s nc c i ton na me i ' s ) pl f m de i d t pr de a s cu e m e ns f r e pl es t us t r m obie de ce on ator sgne o ovi e r a o m oye o e hei l vi s hr e s e fce s c mp n p e s s ( o a y r mie . PSOF a ! 1, The t ee Def ndant wer ofi r of Openpeak t )2 . Gite a a Fl i ciie s v as Ope ak' Chaim a oft Boa d and Chi Exe utve tlm n, orda tz n, er ed npe s r n he r ef c i Ofie .( mp . t! 5 ,Ba ca , W a hngo ctz n, ev da isEx c tv VieP e ie t fc r Co la ) r ly a s i t n i e s r e s t e u ie c r sd n . i (d. t 6 . Kwo , Flrd ctz n, sOp n a sVieP e i e ta d Ge e a Co s l (d 1 a! ) n a o i a i e wa e pe k' c r sd n n n r l un e . 1 . i a !7 . t ) On Aprl3,201 Ope a e eed i o a c r t(hel a t Re ae Ag e me 'or i 2, npe k ntr nt ontac t ' ser s l r e nt' M t t 'wihtetlc mmu iain c mpa yAT&T Se vc s l c (AT&T' .( OFa !2 . $ A' t h ee o n c to s o n MI ) r ie , n . i $ ' PS t ) ) Alhoug t Pa te de e t s ope oft M RA and t rg sa t c t r t t t u tof t h he ris bat he c he he i ht ta hed he eo, he hr s t agr e e wa t t Ope a woul s l i vi he e m nt s ha npe k d el ndi dual lc e of t ADAM pltor t iens s he af m o AT&T,whc AT&T wo l t e rs l t c so r u e te b a d n me Sf ge' (#. ih ud h n e el o u tmes nd r h rn a sbg l. / ) ' , Pa tculry a i r l es t De e nt M oton, t M RA alo i ude a s e nt l ri a l s t eat o f nda s' i he s ncl d uppl me a 2Purua t Loc Rul 56.() Hecul fldaSttme ofUndipue Fa sonJ 6,20l s nt o al e 1a, r es ie ae nt s td ct une 7, t da at i tld t Hec e Moton. ( 5 , Deenda sfld a Sttme ofDip e he y fer t se he ruls i DE 4) f nt ie ae nt s utd Fa t i rs o s t Hec ls sae n o J ne 1 ,2 7 ( 6 ) whc wa fld i cs n e p n e o r ue ' ttme t n u 9 01 DE 7 , ih s ie n c n u cin wi ter Re p n e b if ( 6 ) De e d n s as ic rortd a e te l o j n to t h i s o s re DE 8 . fn a t lo n op ae n xrmey h abi d Sttme ofUnco e t Fa s i o t i M oto ( 51 a 4) Exce whee rdge ae nt ntsed ct nt her in. DE t . pt r De e nt i r e a tona f c s ordiput t e r ie by He cul ,t Cour wilr f f nda s ntoduc ddii l a t s e hos a s d r es he t l e er s ey t Hecul ' Sttmen, whih i syld ' oll o r es ae t c s t e TSOF' ( ai ifs St eme of Fa t) ' Pl ntf' at nt cs. Dee t'rs ns saeme ,wheer fr ce i lbel S fndans e po e tt nt r eeen d,s a ed S DSOF'( enda s Sttme of 'Def nt' ae nt Facs. The Sttme drfed i s t) ae nt a t n uppor ofDee t fndant'Moton,whe er ee d,i lbee s i r efrnce s a ld ' F'( e t'M otonFa t) G DM 'Defndans i cs. a re n,c l d ç n me t6. (e DMR a ! 2 3;DE 513,Gi lma De l,Ex 2 . ge me t al i e Ame d n 9 S e ' t! - t e n c. . ) t Amen e 6 cont nsce t n lng dm nt ai rai a uage c er ng t c t orzai a bilng oft Toggl onc ni he a eg i ton nd li he e lc nss (#..ThePa tesdiput t i e eato oft slngua ie e . / ) ri s e he ntmrt in hi a ge. On M a ch 30,201 s ty be or en e i i o t M RA,Ope ak obt ne a $1 r 2, horl f e t rng nt he npe ai d 5 m ilon l n fom He cul , het r ofwhih we em e ilz i t 201 Se orTe m De li oa r r es t e ms c r mora ied n he 2 ni r bt (:01 Lo n Co ta f'. (d a !3; 5 48( a d lDe l, UU).Amo tep o iins 1 2 a nrc ) l . t DE 4- W re c.Ex. ) 2 ng h r v so weec na sa orwa r sby Ope k t t()de e t pa torongoi oc urenc of r ove nt nd/ rant npea ha a nid he s ng c r e e nt t tha or woul r s bl be expe td t have a SMaeilAdves Efec';( ve s ha ve d ea ona y ce o t tra re f t' b) c riid t t S r por,Adva e Re t or fna a satm e ' s e tfe ha d e t no nc ques, i ncil t e nt' ubmit d by Openpea te k c nan d a y k tra misae n ll' ro si n o fc a dt a a1s c d c me t we e o tie n t e il sttme ts'o miso s f a t n h t 1 u h o u n s r ma l e e i g fihbas onasumptonst beras bl a t tme';a ( a ee nott i pard n ood at ed pr s i o e ona e t he i ' nd c) gr d o ma any cha ke ngest isd c ntng polcesorr pori pr c ies't twer i onssentwih o t s ou i ac ii e tng a tc ' ha e nc it t ( neal Ac e td Ac ou tn Prn ils(' Ge rly c pe c n ig icpe i GAAP'1' (# a ! 4 . I a dto t e 2 2 ' . f . t ) n d iin, h 01 )' Loa Conr c r quied Ope Pe k t s n ta t e r n a o ubmi t He c e ,a ongwih c t n fna i lsae e s t o r ul s l t erai i nc a t tm nt, mont y d hl k compla e Ce tfc t s' whih afimed t tt fna alsa e t we e pr r d inc rii a e s' c fr ha he i nci t t men s r epa e i ac or ncewih GAAP.(#.. n c da t f) On M ar h 24,201 Openpe k a Her ul r i nc t 201 Loa Contac t oug c 4, a nd c es efna ed he 2 n r t hr h te2 4 S no Te De t(2 4 Lo n Co ta f) (d. t! 1 DE 5 49( ad lDe l Ex, h 01 e ir nn b 1 01 a nr c '. 1 a 2; : 4- W r e c . , VV). The 201 Loa Conta t extnde a g rnte $1 5 milon (tis ta he' t ) 4 n rc e d uaa e d 0. li dfrt rnc ' o ) Openpea pa toft pr e ofwhi we t pa down t r k, r he oce ds ch nt o y he emai ng prncpl a i e es ni i i e nd nt r t dueon t 201 Loa Co rc. ( aden Dec.Ex.VV a 1. Asan a tonali ntve t he 2 n nta t W r l, t) ddii nce i , he r sr c ur d 1an pr de t ti Ope ak metc t n r nue mie t ,i c d obt n a e tu t e o ovi d ha f npe erai eve lsones t oul ai n a to $ 5milon i l ns(ke ddiinal 4. li n oa fscondta he' a pe i ofi ees- y rpay nt (d. rnc ' nd rods ntr tonl e me . 1 ) a 12) The201 Loa Conta tc ane t s mewarntesa c na sasisprde sor t-. 4 n rc onti d he a ra i nd ove nt t e ce s . ( OF a ! 1 ) OnOco e 3 , 01 , ru e p r te Op n a t d a t s c n ta c . PS t 2 . tb r 0 2 4 Hec ls emitd e pe k o rw he e o d rn he (d a !5 ) 1 . t 3. Bet e J nuar 1 201 a Ocobe 30, 201 De e nt e ha we n a y 3, 4 nd t r 4, f nda s xc nged muli e tpl c rs ore ponde es or he d i pe s me tngs wih He cul a nt r ga di Ope a s nc l n- r on ei t r es ge s e r ng npe k' fna i lsausa pr pe t f o ani ca t li t e ,a we la t g ow t pot nta of i nc a tt nd os c s or bt i ng pia nvesm nt s l s he r h e i l t ADAM plto - a i pa tc a ,t s c s ofAT&T' Toggl r l pur ua t t he a f nn nd n riulr he uc e s s e olout s nt o he M RA. Thet e hol m at rofdebae i whe he Def nda s i m a ng r es nt tonso t e hr s d te t s t r e nt , n ki epr e a i n hes s be t,c n e e ia c ae if r to l s t ne tq e to i wh t e te dd s u j cs o v y d n c urt n o main, f o, he x u sin s eh r h y i o ne i nty or faudulnty i lght of t Compla e Cerii a e a t wa r ntes a glge l r e l n i he inc tfc t nd he ra i nd c na t c ai d i t t Loa Co r c s ove n s ont ne n he wo n nta t . To e t bls Def nt 'r pr en a i ,He cul poi s t fna a satm e s a sa ih enda s e es t tons r es nt o i ncil t e nt nd p oe tdrve u mo ess n b Baca t Hec ls(d a ! a 6 8 1 - 4, 4 2 3 - 3 4 ) rj ce e n e d l e t y r ly o r ue i. t ! t - , 3 1 2 , 6, 2 3 , 0 ; optm itc saeme s ma by Ba ca a Gitema t He c e conc r ng Ope ak a i si t t nt de r ly nd tl n o r uls e ni npe nd ADAM ' p ro ma c (d.a ! 5 6 9, 1 ,2 ,2 - 8 3 - ,3 - 5 3 ,4142 ;a t e S ef r n e i t ! - , 3 5 7 2 , 0 31 4 3 , 7 - ) nd h warantes c r i , ovena s a Compla e Ce tfca e sgned by Kwon orBar a a d i r d t nt, nd inc rii t s i cly nd elve e o He c ls(d. t! 1 ,2 ,5 ) rue c ae tos rp e e tto st e i n ep r o t g rue i a ! 1 6 4 .Hec ls omp r s h e e r sn ain o vde c u p ri n t con r dit Def nda s r y f e ass The e i l a s c o ta c e nt ' os or c t . s nc ude e ond,fit r ' s tofac ountng ûn e nal' e c i r or on Ne suie r pori ls i om e t n i t sae e s a s e ds t s nt t ec ds t t e tng e s nc ha n he t tm nt nd pr a hee s e o Hec ls(d. t ! 1 , 0, , 6 4 ,51;e tmo yfo f r ro fc r a ou d vainso t e rue i a ! 5 2 44 4 , 9 ) tsi n r m o me fies b t e ito f h dei rd fna il sae t fom GAAP sa r (d.at! 1 ;t tmony fo St n lvee i nca ttmens r tndads i 6) esi r m eve Ri ha ds Ope a s f c r , npe k' onner V i e Pr i ntf Fi nc as e tng t tt co pa s r ven c es de or na e, s r i ha he m ny' e ue fr c ss wee S n e sbe' a d S g rs ie' (d. a ! 1 - 8 ; a rp rs a o t t e o e a t r i fa il' n i g e sv ' i t ! 7 1 ) nd e o t b u h u a tc n lgc lp o lmswi a u p p lrt o teADAM p afnn (d. t! 1 2 4 ,4 e h oo ia r be t nd n o uaiy f h h lto i a ! 5, 0, 5 7 48 50) Hecul 'ofi e sa fr t tt rle on Dee t'r esnttonsi de di t , . r es tc r fim ha hey eid fndans epr e ai n ci ng o 4 rsr cu e Op n e k' d b t r u h t 2 4 Lo n Co ta t(d.a ! 212 a d t pemi etu tr e p a s e t h o g he 01 a nrc i t ! -2) n o r t Op n a t d a o t ec ndto a s c n ta c ec ne ae i t tc nr c (d. t! 5 ) e pe k o rw n h o i n l e o d r n h o tmpltd n ha o ta t i a 3 . i The sa e f t r t t He c e was not a e of a of t i y tt urhe ha r ul s war ny he i r e i or ton' a adve s nf ma i ' bout Op np a Ld. t!I - 2 5 )u tlJ n ay 1 ,2 5 whe GlnFame , e pe k sFia e e e k i a ! 515 , 5 n i a u r 5 01 , n e r r Op n a ' n nc Die t r whih aleg y de onsr t d t tce ti Toggl r ve r c o , c l edl m ta e ha ran e e nue a c ue i e lerpe i c r d n ari rods ha b e rsae ltr(#. t! 5 ) os smeo te r t siy ta h d t ykn wn a o tte d e n e ttd ae f a 6 .Th e a fl es e tf h t a he o b u h a r e i or ton att tme He c e woul not ha e dve s nf ma i he i , r uls d ve ngage i eihe ta a ton and d n t r r ns c i wo l imme itl ( a e tke se t e tt ec e i fclt ' (#,a ! 2 ,5 ) I se d, ud k daey h v l a n tps o xi h rdt a ii ' / t ! 3 5 . n ta i y. s ysHe c e ,i onl t t ese i J nuar 201 f l ng Famersdicos es (#.. a r uls t y ook hos tps n a y, 5, olowi r ' s l ur . / ) Def nda s ho ver cli t tHe c esdi nott ktûa m ae i se ' t wihdr w fom t e nt , we , am ha r ul d a iny tral t ps' o t a r he la arn e n u tlOpe pe k mis das h d ldp y n o J n r 1 , 01 ( o n ra g me t n i n a s e c e u e a mt t n a uay 4 2 6. DSOF a ! t( 55) . I r pons ,De enda sciet t rown a fdavis aswe la t de ii t si ony of n es e f nt t o hei fi t , l s he poston e tm o he Ope ak ofi e s t s t r npe fc r , o how,i e ala,t tt t s t ofa ountng r c ds wer no ntr i ha he wo e s cc i e or e t ic mp tbe ( OF a ! 1 ,23 ;ta ADAM wa a Su l f n to i a d f l tse ' n o ail DS t ! 5 ) ht s i ly u ci nng n ul etd' f y p af r (#. t a i wa a p o rae t r sae c ran r v n e fg r s (d.a ! 20 ;a d t a lto m ï ) h t t s p r p it o ett e ti e e u iu e ; i t ) n h t ; Ope npea s fs ni l derhi 'r s bl a S i er l be ived' t t t compa c d k' 'e or ea s p' ea ona y nd s nc e y le ' ha he s ny oul mee t f e ssdei r t Hec esa prpaeda1fnancalsae nt i goodf t (d.a t he orca t lveed o rul nd e r l i i ttme s n aih i t ! 1 -9 2 3 ) ! 8 1 , 2, 6 . Her esfl ac anti t sCour agans Defnda son Se e cul ied ompli n hi t i t e nt ptmber29,201 ( 6. DE Thec ai wa a nde t c ( 6 & 42) mos r e l on M ay 25,201 ( 42) ompl nt s me d wie DE , t ec nty 7 DE . The Se cond Ame d Com pl ntc ai sx count a i tDe e nde ai ont ns i s gans f ndant t ea h f neglgen s: wo c or i t rp e e tto ( mp .a ! 1 - 4 1 0 1 4 ;fa d fa d ln mirp e e tt n (d.a ! 8 e rs nain Co l t ! 7 8 , 1 - 5 ) ru /r u ue t se r s nai i t ! 5 o 1 1 - 83) and cvi c pia y t defa (d.a !! 1 1 1 18 . Dic r ens 03, 55 1 ; i l ons r c o rud i t 04- 09, 84- 9) s ove y ued 5 a t i t M o i f l d. The He culsM oton r sst tt Cour awa d s m mar nd he nsant tons olowe r e i eque t ha he t r u y j d me ts ll wihr s c t t et ne lg n mirp e e tto c u t. De e d n s Mo in u g n oey t e pe t o h wo gie t se r sn ain o ns f n a t' to doe notm ovet Cour die ty t r ol a l lcai s butas m e el t ti c tu t s he t r c l o es ve ny ega l m , ks r y ha t onsr e he me ni ofa lge y una bi a ng le dl m guoustr si Am e e 6. em n ndm nt 3 l. I LEG AL STANDARD dl e c u ts alg a ts mmayj dg n i t emo a ts o ta t ee i n g n i e ç- o r h l r n u r u me t f h v n h ws h t h r s o e u n -h ds u ea t a ymae ilfc a dt emo a ti e tte t j g n a amatro lw. F d ip t s o n tra a t n h v n s n ild o ud me t s te f a ' e . ' R,Ci P.56() The mova ç waysbe st i talr ponsbiiy ofi o mi t ditit v. a. nt ' al ar he nii es i lt nfr ng he src c toft ba i f r is moton,a i ntf ng t e pori of the pl a ngs de ii , our he s s o t i nd de iyi hos tons t e di , postons a wer t i e r t i ,a a isonson fl t he wih t a fda t,i an 'whih i ns s o ntroga ores nd dm s i ie, oget r t he fi vis f y, c t be ive de le s monsr e t abs e ofa ge nei s ofmatra f ct' Ce otx Cor v.Catet, tat he enc nui s ue eil a . ' le p. r t 4 7 U. 31 ,3 3 ( 9 6 ( u t F d R.Ci .P,5 ()1( ) W h r t eno mo ig pat 7 S. 7 2 1 8 ) q o i e . ng v 6 c( )A), e e h n- vn ry b ast eb r e o p oo o a is ea til t mo a tma smpy i p it o tt t edsrc e r h u d n f r f n n su t ra,he v n y i l t on j u o h itit l c u t( ta te ei a a s n eo e d n et s p r t en n v n p ry' c s . 1 . t3 . o r ) h t h r s n b e c f vie c o u po t h o mo i g a t s a e' d a 25 ' Afe t mova ha me isbur n u rRul 56 c,t bur s fst t non- ng pa t tr he nt s t t de nde e ( ) he den hit o he movi ry t e tbls t t r i a genui i s ofm aeralf ct M atus t Elc.l s Co. Lt v. o sa ih hat he e s ne s ue t i a . s hia e ndu . , d Ze t Radi Cor , U. 574,585( 986) nih o p.475 S. 1 . Alhoug a1 r s bl i e e s a e t be dr wn i f r o t non- ovi pa t t h l ea ona e nf r nce r o a n avo f he m ng ry, Ande s v fi ry Lobb I .477U. 242,255 (986 ,henon- ngpa t i tdomor ron . be t y, nc, S. 1 )t movi ry ' mus e t n sm pl s ha i y how t tt r i s ha he e s ome metphysca do ast t m ae ilf c s' M at u hia, a i l ubt o he t ra a t . ' ss t 475 U, a 586. Thenon- ovi pary ma notr tupon t m e e alegai ordeni soft e S. t m ng t y es he r l tons al h 3Acc di t Her ul s t c tuc i n of Ame e 6 i r e nt t de e m i whe he or ng o c e , he onsr to ndm nt s elva o t r ne t r De e f ndan svi a e a ountng sa dsby r t tng ce t n r venuei fnancalsa e e sa t olt d cc i t ndar esa i rai e n i i t t m nt nd s e ds essntt Herul .( 70a 3 .Defnda sde t t ys eka hi mor t n pra he t e o c es DE t ) e nt ny hat he e nyt ng e ha t caiyt pr sonsa is ( 7 a 6) bu doaruet tAT&T pad $8 milo purua t o lrf he ovii t sue DE 9 t , t g ha i lin s n t Am e o ndme 6 a t ti i t spay e whi He c e a lgeswa notr or d i am n r nt nd ha t s hi m nt ch r uls le s ec de n nne complan wihGAAP sa r .( 51a 2) it t tnda ds DE t . 6 a r epary' pl di ,bu i ta mus come f wa d wih ds cii fd ss dve s t s ea ngs t nse d t or r t çpe tc a howi t tt e ng ha her i ag n ieis e o til' I a 5 7( ingF d R. v. 5 ().l h r terc r tke a s e un s u f r ra . d t 8 ct e . Ci P. 6e ) ' ee h e o d a n s b i W a whol c d not lad a r tona tir of f c t fnd f t none oul e ai l re a t o i or he movi pa t t r i no ng ry, he e s S ui is f ti l'' gen ne s ue or ra .' $ mer icntla'ofe de e s i A e s i il vi nc uppori t opposng pa t s tng he i ry' p sto wil o s fie t r mu tb e o h o as o n t a tej r c u dr a o a l fn o iin l n t u fc ; hee s e n ug f h wi g h t h u y o l e s n b y i d f t tpary.' Wale v. b 911F. 1 1 ( 1hCi.1 .l t non- ngpa t or ha t ' k r Dar y 2d 573, 577 1 t r 990) f he movi ry f l t make a s fcint s ais o ufi e howi on an e s nta elm e of he c s on whih s has t ng s e i l e nt r ae c he he b r e ofp o f t mo n p ry i e tt dt aj d me ta amatro lw. Ceoe Cop. u d n r o ,he vig a t s n ie o u g n s l te f a l tx r , 477U. a 323. S. t 11 1. DI SCUSSI ON The c os - otonsde wih ove lppi is s.Asme i r sm i al t ra ng s ue ntoned above onl t Her ul , y he c es M o i r ue t a dipostvede e m i ton on a cli . It r or c i rt tmoton fr t ton eq ss s ii t r nai ny a ms he ef e onsde ha i is . W . H e cul s M oton r e i He c lsse ss mmayj dg n a t t n g ie tmirp e e tton c u t,whc rue e k u r u me t s o he e lg n se r s n ai o n s ih a e ditnc fom e h ot ronl i t tt y pe t n t dif e tta a i a tm e pe i r si t r ac he y n ha he rai o fer n r ns ctons nd i rods d rn t r lto h pb t e Op n a a d He c ls ThsCo r' s be t te j rs ito u ig he eains i ewe n e pe k n rue . i u ts u j c matr u id cin aie tr u h te c mplt die st o te P ris S e 2 U. . j 1 3 ;( mp .a ! 1. rs s h o g h o ee v ri f h a t . e 8 SC. 3 2 Co l t ) y e W he sti i di r iy,f de alc t S y t s t ntve 1 oft f u sae unl s n itng n ve st e r ours i appl he ubsa i aw he or m t t es f de a co tt i lorsa ut y 1w c e r l nsiutona t t or a ompel a c r r r s t' Adm iall .Co.v.Fei M gmt s onta y e ul. ' r ns t . Ct. 3 F. 1 1 ( 1h Ci.2003) se aloHannav Pl r,380 U. 460,465(1 ) ?, 21 3d 326, 328 1 t r ; e s . ume S. 965 (ndi riycaes fdealc t bo by saes tntvelw) i vest s , e r ours und tt ubsa i a .ThePa tesdonotdiput t t ri s e ha Fl i l w g orda a over t c a m s a i s her Neglg m i r pr ent i i a co m on 1 w t t ns he l i t s ue e. i ent s e es aton s m a or . I Fl i ,a pli if algi t s t tmus etbls f elme s t t i 1 t r was a n orda antf le ng hi or t sa ih our e nt: ha û ) hee ( mir r snttonofmatra fc ;( t rprs ntret rk w oft mir pr e ai made sep ee ai e il a t 2) he e e e e ihe ne he se esntton, 7 t m ir pr s ntto wihou knowl dge of i tut o f st or s d ha kno t he s e e e ai n t t e t r h r aliy, houl ve wn he rpr e ai wa fle; ( t rpr ene i e ed t i e a he t a t on t e esntton s as 3) he e es tr ntnd o nduc not r o c he mir p e e tto a d ( ) ij r rs le t a p ry a tn i j tfa e r la c u n t e se r s nain; n 4 n u y e utd o a t cig n usiibl ein e po h m ir pr s a i ' Ti a Condo.As ' l v M ar & M c e se e entton,' ar s n, nc. . sh L nnan Co. l . 607 F. 7 , nc, 3d 42, 7 7 ( 1h Ci. 01 )( u tn Ba g t v Elcrca sLo a # J Cr dtUn o ,6 0 S 2 7 4 4 1 t r 2 0 q o ig g et . e tiin c l 3 e i i n 2 o. d 8 , he s ed e a a s 1 our 7 6( a 2 DCA 1 9 ) Her ulsar t t i lghtoft undiput m atrilf ct ,al f 8 F1. d 9 3). c e gues ha, n i oft ef ct sa e s tsi Idia ee hes a or r a ifed. s gr , Fis,t r i a g ne diput a t wheher Def nda s mir es nt d a ma e i l rt he e s enui s e s o t e nt sepr e e ny t ra f c . As dic s d a at s us e bove,He culs'poston t tDef nda sco m u c t a dit td pit e r e ii ha e nt m nia ed sore c ur of Openpea s pr kabiiy r ss he viy on t dif enc bewee ( i or k' of lt et a l he fer es t n a) nf mal c aa trz to s s ra s e f r c ss a d fn n ilsae ns o t e o e h n a d ( )te h rceiain , p e d he t o e a t, n i a ca ttme t, n h n a d n b h i ena N e suieac ountng r or and t tm oni ofc ran He c e a Ope ak ofi e s nt r l t t c i ec ds esi es e ti r uls nd npe fc r ( ri al Stve Rihar ) ont ot r W ihr pec t t Nesuierco ds ia a st t patculry, e n c ds, he he. t es t o he t t e r ,t ppe r ha t i i nssenc wih t doc he r nco it y t he ument s nte er l t s t a lr deg ee,on t l tmac s e xt naly um , o a ge r he egii y of Ope ak' a c ntng pr tc unde GAAP and/ t e c r t c t gorz ton of ce t n npe s c ou i aci es r or h orec a e i a i rai To ge l e s s Ea h sd rle o e p rswh wiltsiy o t sis e ç Allg to so g l i n e , c i e eis n x e t o l e tf n hi su . i l ai n f c g e n n o la c wih ( a c u t sa d r sn r l rieq e to so fc c nc r igt ea t o c mp in e t ) c o ni tn a d o mal as u si n f a t o e nn h cs ng y orom isonswhih aleg y c tt e avi a i ofa a ia e sa r ' Ra he Co.v si c l edl onsiut olton n pplc bl t nda d. yt on ' . Unie St e 747 F, 1 td ats, 3d 341,1 ( d.Ci,201 ( s sd pa tc a l wih r pec t 352 Fe r 4) dicuse riulry t es t o gov me ' budenofpr ngdefns ag ns conta orspe i r ove cai l s aloI enl nts r ovi e e ai t rct ' nson ec r l ms; ee s n r Burigt Co Facor Se Lii i 1 4 F. 1 0,1 1( d Ci.1 e ln on at t y c. tgaton, 1 3d 41 42 3 r 997)(s s ngt t i umi ha as c itncy wih GAAP i enoug t pr l onsse t s h o ecude labiiy, i i a f c ual que ton whet r i lt t s at si he (ee d n'ja c u tn p a tc sweec nsse twi GAAP'. Net e a et etsi niso d fn a ts c o ni g r cie r o itn t h ' ih r r h e tmo e f ) t He culs a Ope a of e sdipostve. The de ii ta c i sand a fdaviss he r e nd npe k fc r s ii poston r ns rpt fi t how t ts ha ome exe utvest a f mor pes i itc viw ofOpe a sf u e r ve c i ook ar e sm s i e npe k' ut r e nue,pot nta e il ac ston,a pr duc vibiiy t n di Def nda s a o he s. But whe he Def nda s quiii nd o t a lt ha d e nt nd t r t r e nt ' sa e nt a fg e c tt e m ir pr s nt i a t tme t y we e co munia e bois t t me s nd i ur s onsiutd s e e e atons t he i he r m c td l down t aqut ton ofc t biiy t tt Cour ca r ol onl i isca ciy asf dfnde . o si r di lt ha he t n ts vt y n t pa t a i r Se ond,e n a s i t tDe e n s m ir pr e e m aeralf c s i i note iey c ve s um ng ha f nda t s e es nt d t i a t , t s ntr l ce rwh t e Hec ls r l n ete e n wa j tse . Hec e ag e ta b c u e Kwo a d la eh r ru e ' ei c h ro s usi d ruls r u s h t e a s a nn Ba cly e c ed docume sce tf ng t a c a y oft fna a i or i i wasr ive r a xe ut nt riyi he c ur c he i ncil nf maton, t ele d ofa dut t i depe nty i si t Openpea s r pr s nttons. Def ndan s r s ny y o n nde l nve tgae k' e e e a i e t e pond t t ha He culs wa a s vvy i t ntc r e s a nvesme ompany a t s ul be e ct t do s nd hus ho d xpe ed o ome lgwor t e k o c im i or ton a onfr nf ma i boutOpe a sfna al and pr t Agan,t c r tposton ca npe k' i nci s oduc . i he orec ii n be dee m i d onl by s itng t e d e t ti l Se E.Ce ntv Hali t Co. 600 tr ne y ubm ti he vi enc o ra . e me . lburon , So.2d 469,471( a.4t DCA 1 (n fa e r e e ai ca e pr enc ofco tng Fl h 992) i rudulnt eprs ntton s , es e mpei e ie c o j tfa ii o rla c p e ld d s vd n e n usiiblt f ein e rcu e ummay j dg n ) TD.Mc re v Auo y r u me t; cu ly . t Own r ls Co,35 S .2 68 6 ( a 1 tDCA 1 7 )(a ) Wof v Chyse Cop. 7 4 e u n . . 6 o d , 9 F1. s ç 9 8 s me ; le . r lr r , 3 F.d7 , 0 ( 1hCi.1 4 Cs h t e (litfli f c r le , n i s , eh rhsrla c 2 01 7 4 1 t r 98 ) W eh r panif n a t eid a d,f o wh te i ein e o g fn a ts rprs nainswa j siidu d rtecru tnc sweeq e to sf rtej r f dee d n 'l e e e tto s u tfe n e h ic msa e r u sin o h u y t rs ve.) Furhe,t exe t whi Hecul wasdama by a mirprs ntto i o e ol ' . t r he tnt o ch r es ' ged ny se e e ains t r id u i i e t ne wih s t i que to ofla lt - es c a l i lg ofHe c e ele pon s nt rwi d t ubsantve s ins i biiy pe i ly n i ht r uls' a s ri t tDe e s e ton ha f ndant 'mir pr e t tons we e s r ckl s or wa on s ast e il i t s se es n a i r o e es nt o o ntte t o pu iied ma e .Ac o digy s mmayj d me to ten gie tmirp e e tto c nt i ntv a g s c r n l, u r u g n n h e l n se rs n ain ou s s g de e nid. #. De ndant ' oi fe s M ton S mmayj d me ti as n ta p o raea t De e d n s M o in.De e d n sa kt e u r u g n s lo o p r p it s o fn a t' to fn a t s h Cou tt c tu l r o onsr e angua i Amendme 6 whi may be on De enda s' fde iy t t ge n nt ch ar f nt i lt o he GAAP sa r . The r que ton i whe he a mandaed bilng pr tc a i t c ran t nda ds i si s t r t li ac ie pples o e ti lc nss t t Dee t r e t a S eunda e Pepeua Lie es' (s o e t ie e ha fndans efr o s s Nonrf bl r t l c ns ' a pposd o ' tona Pe t Lie e ',whih t y cam aec eg ialy e mptd fom t bilng s i l meual c ns s' c he li r at orc l xe e r he li Addi ) pr sons W hie t ans r t t s qu ton may uli ael r a e t a m aeralelm e of ovii . l he we o hi esi tm t y elt o t i e nt He c es cai , i i not is l ne es a iy dipostve of a cl m or elment t r of r ul ' l m t s te f c s rl s ii ny ai e he e . Th r or ,1de i t i t ton t r r whatwoul amountt a i pe m isbl a s y e ef e clne he nvia i o ende d o n m r s i e dvior opi on on a quesi ofco r c i e pr tton. M al v Unie St e Ator y Ge ,764 F. ni ton nta t ntr ea i u , td ats t ne n. 3d 1 8 ,1 9 ( 1hCi. 4)(r hbtn a v s r o no s .Dee d ns M oi ni as d ne 2 2 2 0 1 t r 201 p o iiig d io y piin ) fn a t' to s lo e id. ORDERED a ADJUDG ED t ; nd hat ( )Pli ifHec ls Ca ia,I c' (/ He c ls Te hn lg Gr wt Ca tl I c) 1 ant f r ue p tl n .s iVa rue c oo y o h pi , n . a M oinf rPa t lSu r J d me ( 5 )i DENI to o ri mma y u g nt DE 3 s a ED; ( )De e d n sDa e J Gite n,Da d Baca a d Ho r A.Kwo sM oi f r 2 fn a t nil . tlma vi r ly, n wa d n' t o on Pata SummayJ ril r udgment( 51 i DENIED; nd DE ) s a ( Defndant Da elJ Gite n,Da d Barl and Howad A.Kwon' M oton t 3) e s ni . tlma vi cay, r s i o Sti Pli ipsRe y( 82)i DENI rke antf pl DE s ED. The Pa te a e r m i d t tCalndarCali s tf Augus 2,201 a 1 1 p. . Thi ris r e nde ha e l s e or t 7 t ;5 m s ca e wilpr e d t abenc tildu i t t wee pe i be nni Augus 7,201 s l oc e o h ra rng he wo- k rod gi ng t 7, so ORDERED i cha r,a W etPam Be n mbes t s l ac CC' A1 Couns lofRe or l e c d orda hiX Z a o J l, 201 i s d y f uy 7. D D M .M I DDLEBROOKS UN I TED STA TES DI STRI J CT UDGE 10