Free Proposed Scheduling Order - District Court of Colorado - Colorado

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

Civil action No. 1-01-cv-02313-JLK-CBS

GLN COMPLIANCE GROUP, INC., Plaintiff, v. UNITED AIRLINES, INC., d/b/a UNITED BIZJET HOLDINGS, BIZJET CHARTERS, INC., AND BIZJET SERVICES, INC., and JONATHAN ROSS Defendants, v. GERALD NAEKEL, Third- Party Defendant.

STIPULATED SCHEDULING AND DISCOVERY ORDER

1. DATE OF CONFERENCE The Scheduling and Discovery Conference is set for Tuesday, February 26, 2008, commencing at 10:00 a.m. 2. STATEMENT OF CLAIMS AND DEFENSES a. Plaintiff GLN Compliance Group, Inc.'s statement of claims and defenses:

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GLN Compliance Group, Inc. ("GLN"), alleges the following claims against Defendant Jonathan Ross ("Ross"): (1) Civil Theft pursuant to section 18-4-405, C.R.S.; and (2) Tortious Interference with Contract. GLN's claims arise out of Ross's interference with GLN's existing contractual relationship with United Airlines and its subsidiaries in order to benefit himself. Further, GLN claims that Ross directed and participated in the theft of GLN's property, namely flight manuals and other trade secrets and confidential and proprietary information owned by GLN. Ross's conduct was the direct and proximate cause of damages and losses to GLN in amount to be proven at trial. United Airlines has asserted a breach of contract counterclaim against GLN. GLN denies that it breached its contract with United Airlines or its subsidiaries and alleges that it performed all of its contractual duties and obligations. Ross has asserted the following counterclaims against GLN: (1) Defamation; (2) Outrageous Conduct; and (3) Abuse of Process. GLN denies these allegations, primarily on the basis that the substance of GLN's statements were true. Further the vast majority of GLN's allegedly defamatory statements were made in 2002 and, and as a result, all or part of Ross's defamation claim is time-barred under the applicable statute of limitations. b. Counterclaim Plaintiff United Airlines' statement of claims:

United Airlines, Inc., d/b/a United BizJet Holdings, BizJet Charter, Inc., and BizJet Services, Inc., ("United") has asserted a breach of contract counterclaim against GLN. United alleges GLN breached its contract obligations to United by its failure to acquire a valid Part 121 certificate and a valid Part 135 certificate as soon as reasonably practicable. GLN did not meet deadlines or milestones to complete the certificates in a reasonable amount of time, and, upon

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information and belief, actively encouraged persons working on the Project to slow down the Project. With respect to the part 121 certification, GLN made no progress for several months and had nothing to show for its work when United terminated Plaintiffs services in connection with the part 121 certification. In addition, the part 135 manuals prepared by GLN for the Project were of inferior quality and did not meet required standards. United contends that it should no longer be a party to this litigation. By Order dated October 16, 2007, this Court dismissed GLN's claims against United, recognizing that GLN can only pursue claims against United pursuant to GLN's Proof of Claim filed in the United States Bankruptcy Court for the Northern District of Illinois ("Bankruptcy Court"). Although this Court denied Ross' request that GLN's claims against him be transferred to the Bankruptcy Court, it did not address the status of United's single counterclaim for breach of contract. Accordingly, United intends to file shortly a motion to have its counterclaim against GLN in this case transferred to the Bankruptcy Court so that it can be resolved in conjunction with GLN's Proof of Claim against United. As discovery regarding GLN's Proof of Claim against United will be set and governed by the Bankruptcy Court, United presents no comments regarding any agreements or positions set forth by GLN or Ross in this Scheduling and Discovery Order, other than to clarify that United should not be a party with respect to discovery conducted in this action. To the extent this Court denies United's request to transfer its counterclaim to the Bankruptcy Court, United reserves the right to comment on the discovery matters that may impact United, including the status of this Court's Scheduling and Discovery Order entered in 2002 and the fact that GLN never responded to United's Second Set of Discovery to GLN served on October 28, 2002.

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c.

Defendant and Counterclaim Plaintiff Jonathan Ross's statement of claims

and defenses: Ross asserts counterclaims for Defamation / Libel Per Se, Outrageous Conduct and Abuse of Process against Plaintiff GLN Compliance Group, Inc. ("GLN") and third party claims against Gerald Naekel ("Naekel"), the principal of GLN for Defamation / Libel Per Se and Outrageous Conduct. Ross's claims for Defamation / Libel Per Se and Outrageous Conduct are based on GLN's and Naekel's false and outrageous statements concerning Ross, which they have collectively broadcast to third parties via e-mail and to the public on GLN's website since 2002, which statements accuse Ross of theft, conspiracy to commit a felony, lying and other wrongdoing. Ross's claim for Abuse of Process is based on the Court's December 11, 2007, dismissal of GLN's claim against Ross for Outrageous Conduct for failure to state a cognizable claim under Colorado law. Ross's Defamation and Outrageous Conduct claims are not barred by the statute of limitations because Ross was not required to answer or otherwise respond to GLN's Amended Complaint during the stay period that resulted from United Airlines, Inc.'s ("United") Chapter 11 bankruptcy and because GLN's and Naekel's unlawful conduct, which is the basis of those claims continued through Fall 2007 when the stay was lifted. Ross denies all claims against him in GLN's Amended Complaint. GLN's Civil Theft and Civil Conspiracy claims contain vague factual allegations in support of those claims. Ross is unable to determine exactly what GLN alleges has been stolen and/or what conspiracy allegedly occurred. As a general matter, Ross denies that he directed or participated in any theft of GLN's

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property, such as flight manuals or any other alleged "confidential or proprietary" information belonging to GLN. All flight manuals submitted to the Federal Aviation Administration on behalf of United's business charter airlines belonged to United. Ross further denies that he was involved in or organized a conspiracy against GLN to steal any materials or information from GLN. Finally, Ross denies GLN's claim that Ross interfered with GLN's contract with United to benefit himself. Rather, on information and belief, United terminated the contract for its own reasons. d. Third-Party Defendant Gerald Naekel's defenses:

Defendant and Third-Party Plaintiff Ross has asserted defamation and outrageous conduct claims against Gerald Naekel individually. Mr. Naekel denies these claims on the basis that his allegedly defamatory statements were true in substance. Mr. Naekel also asserts that the defamation claim is partially or completely time-barred pursuant to the applicable statute of limitations. 3. UNDISPUTED FACTS The following facts are undisputed: a. The Court has determined that jurisdiction is proper in the United States District Court for the District of Colorado, pursuant to 28 U.S.C. § 1332(a). b. GLN Compliance Group is a Colorado Corporation, with its principal place of business located at 7211 South Peoria, 200A, Englewood, Colorado 80112. c. d. Jonathan Ross is an individual who resides in NY. GLN Compliance Group entered into a contract with United Airlines, Inc., in September of 2000.

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e.

In March of 2001, GLN and United Airlines, Inc., amended the September 2000 contract.

4. COMPUTATION OF DAMAGES a. Plaintiff GLN Compliance Group's Damages:

1.

Approximately $ 783,505.00 in damages and losses resulting from United Airline's breach of contract caused by Jonathan Ross's tortious interference with contract.

2.

Approximately $400,000.00 in damages (including diminished value) resulting from Jonathan Ross's participation in the theft of flight manuals and other confidential and proprietary information owned by GLN.

3.

Treble damages, attorney fees, and pre-judgment interest as provided for by Colorado law.

b.

Defendant/Counterclaim Plaintiff Jonathan Ross's Damages: Ross has incurred significant damages and losses resulting from GLN's and Naekel's false and outrageous statements, including damages in the form of lost reputation and business opportunities. Ross is also seeks punitive damages in connection with his claims for Defamation / Libel Per Se, Outrageous Conduct and Abuse of Process, in accordance with Colorado law. Ross has also incurred attorneys' fees and costs, in an amount to be determined, in defense of GLN's failed Outrageous Conduct claim and the remaining frivolous and groundless claims.

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c.

Counterclaim Plaintiff United Airline's Damages: United was damaged to the extent it paid GLN to acquire a valid Part 121 certificate and a valid Part135 certificate as soon as reasonably practicable. United was forced to pursue such certifications without GLN's help due to GLN's failure to timely fulfill its contractual obligations. With respect to the part 121 certification. GLN made no progress for several months and had nothing to show for its work when United terminated GLN's services in connection with the part 121 certification. GLN made no progress for several months and had nothing to show for its work when United terminated GLN's services in connection with the part 121 certification. The material for part 135 certification that GLN had provided to United or filed with the F.A.A. on behalf of United was if such quality that United essentially was forced to start over on the certification process. Accordingly, United received little, if any, value for the monies it paid to GLN. Thus, the amount of damages claimed by United is equal to the amount paid by United to GLN in connection with the Project. This amount exceeds $600,000 United incurred. In addition, United incurred expenses in connection with GLN's participation in the Project. United also seeks recovery of its costs and fees, including attorneys fees, incurred in connection with this matter as well as prejudgment interest and costs and fees permitted by law. 5. REPORT OF PRE-CONFERENCE DISCOVERY & MEETING UNDER Fed. R.Civ. P. 26(f)

a.

Date of Rule 26(f) meeting: January 30, 2008

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b.

Names of each participant and each party represented: Stephen Gurr, Esq. Amy Arlander, Esq. Kamlet Shepherd & Reichert LLP 1515 Arapahoe Street, Tower 1, Suite 1600 Denver, CO 80202 Attorneys for Jonathan Ross Daniel A. Wartell, Esq. Starrs Mihm & Caschette, LLP 707 Seventeenth Street, Suite 2600 Denver, Colorado 80202 Attorneys for Gerald Naekel and GLN Compliance Group, Inc., Mark T. Barnes, Esq. Brownstein Hyatt Farber Schreck PC 410 17th Street, Suite 2200 Denver, Colorado 80202 Attorneys for United Airlines, Inc.

c.

Proposed changes, if any, in timing or requirement of disclosures under Fed.R.Civ.P. 26(a)(1): None.

d.

Statement as to when Rule 26(a)(1) disclosures were made or will be made: Plaintiff GLN Compliance Group and Third-Party Defendant Gerald Naekel served their Rule 26(a)(1) disclosures on February 13, 2008, via U.S. Mail. United served its Rule 26 (a)(1) disclosures on January 11, 2002 and supplemental disclosures on October 7, 2002. Ross served his Rule 26(a)(1) disclosures on February 13, 2008.

e.

Statement concerning any agreements to conduct informal discovery: The parties have not entered into any agreements to conduct informal

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discovery. f. Statement concerning any agreements or proposals regarding electronic discovery: Ross was informed by GLN's and Naekel's counsel that GLN suffered a catastrophic computer failure sometime in 2003. GLN and Naekel have represented to Ross that GLN's entire e-mail database was lost in that crash. Ross has no proposal to offer with respect to the issue of obtaining electronic or computer-generated files from GLN in light of this information, but Ross is concerned that a majority of the evidence that supports his claims for Defamation and Outrageous Conduct may have been compromised by GLN's apparent computer failure. g. Statement concerning any other agreements or proposals to reduce discovery and other litigation costs: None. h. Statement regarding whether the parties intend to use a unified exhibit numbering system: The parties intend to use a unified exhibit numbering system. 6. CASE PLAN AND SCHEDULE The plan and schedule must include the following items: a. Deadline for Joinder of Parties Monday, April 11, 2008

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b.

Deadline to Amend Pleadings Monday, April 11, 2008

c.

Discovery Cut-off January 16, 2009 (one year from the date GLN and Gerald Naekel filed their Answer to Jonathan Ross's counterclaims and third-party complaint).

d.

Dispositive Motion Deadline February 16, 2009.

e.

Expert Witness Disclosure (1) Statement regarding anticipated fields of expert testimony, if any: Plaintiff GLN Compliance Group anticipates retaining an expert to testify regarding the value of the stolen flight manuals and other confidential and proprietary information related to its claim for Civil Theft. (2) Statement regarding any limitations proposed on the use or number of expert witnesses: The parties propose that the number of expert witnesses per party be limited to one. Ross anticipates that he will engage a rebuttal expert. (3) The parties shall designate all experts and provide opposing counsel and any pro se party with all information specified in Fed. R. Civ. P. 26(a)(2) on or before July 16, 2008. The parties shall designate all rebuttal experts and provide opposing counsel and any pro se party with all information specified in Fed. R. Civ. P. 26(a)(2) on or before August 18, 2008. Notwithstanding the provisions of Fed. R. Civ. P. 26(a)(2), no exception to the requirements of the rule will be allowed by stipulation of the parties unless the stipulation is approved by the -10-

(4)

(5)

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court. f. Deposition Schedule Name of Deponent Jonathan Ross Robert Rowland James Davidson Eugene Haggan Chris Lin Gerald Naekel Kristin Naekel Yoder g. Interrogatory Schedule Initial sets of interrogatories will be issued by April 10, 2008. The parties reserve the right to issue additional interrogatories, provided the responses are due on or before the discovery cut-off. Responses to the initial set of interrogatories will be served on or before May 9, 2008. h. Schedule for Request for Production of Documents Initial requests for production will be issued by April 17, 2008. The parties reserve the right to issue additional requests, provided the responses are due on or before the discovery cut-off. Responses to the initial set of requests for production will be served May 16, 2008. Date of Deposition TBD TBD TBD TBD TBD TBD TBD Time of Deposition Expected Length of Deposition 7 hours 3.5 hours 3.5 hours 3.5 hours 3.5 hours 7 hours 3.5 hours

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i. (1)

Discovery Limitations The parties do propose any limitations on the length of the depositions, beyond the presumptive 7 hour limitation.

(2)

The parties do not propose any modifications to the presumptive number of interrogatories contained in the Federal Rules.

(3)

The parties propose that the number of requests for production of documents and/or requests for admissions be limited to 30 each per party.

j.

Other Planning or Discovery Orders None. 7. SETTLEMENT

The parties certify that they have discussed the possibility of a prompt settlement or resolution of this case. The parties rate the likelihood of settlement as highly unlikely. 8. OTHER SCHEDULING ISSUES a. GLN and Gerald Naekel intend on waiving their right to a jury trial, and asking for a bench trial to the Court. b. GLN and Gerald Naekel intend to file a Motion for Summary Judgment pursuant to Fed.R.Civ.P. 56. on or before February 16, 2009. Because GLN and Gerald Naekel anticipate a bench trial, they do not intend to file motions in limine. c. d. The parties anticipate that they will require two (2) days for a bench trial. As set forth above in Section 2(b), United intends to file shortly a motion to have its counterclaim transferred to the Bankruptcy Court where GLN's Proof of Claim against United is pending.

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9. AMENDMENTS TO DISCOVERY AND SCHEDULING ORDER This Stipulated Scheduling and Discovery Order may be altered or amended onlyupon motion showing good cause and order entered thereon.

DATED this ____ day of _________________, 2008

BY THE COURT:

_______________________________________ JOHN L. KANE, Senior Judge United States District Court

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STIPULATED SCHEDULING AND DISCOVERY ORDER APPROVED:

_______________ s/ Daniel A. Wartell Elizabeth A. Starrs,#10914 Daniel A. Wartell, #34902 STARRS MIHM & CASCHETTTE LLP 707 Seventeenth Street, Suite 2600 Denver, CO 80202 Telephone: 303-592-5900 Facsimile: 303-592-5910 [email protected] [email protected] Attorneys for GLN Compliance, Inc.

s/ Mark T. Barnes__________________ Mark T. Barnes, Esq. Brownstein Hyatt Farber Schreck PC 410 17th Street, Suite 2200 Denver, CO 80202 Attorneys for United Airlines, Inc., d/b/a BizJet

s/ Stephen D. Gurr__________________ Stephen D. Gurr, Esq. Amy Arlander, Esq. Kamlet Shepherd & Reichert LLP 1515 Arapahoe Street, Tower 1, Suite 1600 Denver, Colorado 80202 Attorneys for Defendant Jonathan Ross

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