Free Response - District Court of Arizona - Arizona

1

David B. Goldstein, SBN 003410 Holly L. Gibeaut, SBN 019786 2 HYMSON & GOLDSTEIN, P.C. 14646 N. Kierland Boulevard, Suite 255 3 Scottsdale, Arizona 85254 Telephone: 480-991-9077
4 5 6 7 8 9 10 11 12

Attorneys for Plaintiff/Counterdefendant IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA TASER INTERNATIONAL, INC., an Arizona corporation, Plaintiff/Counterdefendant, vs. TASER'S RESPONSE TO DEFENDANT'S MEMORANDUM IN OPPOSITION TO MOTION TO DISMISS COUNTERCLAIMS No. CV00-0945 PHX ROS

GERTRUDE HENNIGAN, as Administratrix of the Estate of Thomas 13 Hennigan,
14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Defendant/Counterclaimant.

I.

INTRODUCTION. Defendant's Memorandum in Opposition to Motion to Dismiss Counterclaims

("Opposition") contains no basis to dissuade this Court from its tentative conclusion that the Estate has not proved the existence of a contract. The Estate still has not identified any proof to show an offer, acceptance, or bargained-for consideration. Absent from the Estate's case is any evidence of what Thomas Hennigan ("Hennigan") and H.A. Buzz Russell ("Russell") promised to do or the terms of the contract the Estate wants this Court to enforce. Without proof of what Hennigan promised to do, the Court cannot determine that Hennigan and Russell fully performed the contract. Russell's testimony that all he had to do was supply a potential customer's contact information to Taser (Opposition at 4) is not based on his first-hand knowledge of the discussions that led Hennigan to represent

Case 2:00-cv-00945-ROS 299669v3

505111:3/10321-00

Document 172

Filed 11/18/2005

Page 1 of 16

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Taser. And if the Court cannot determine what full performance is, the Estate has not fulfilled its burden of demonstrating full performance and thereby remove this admittedly oral contract from the Statute of Frauds. Hyperbole and adjectives are no substitute for proof that Hennigan and Russell actions benefited Taser. They are no substitute for proof that quantifies the value, if any, of that benefit. Yet the Estate trumpets that their "services were immensely valuable." (Opposition at 14.) The Estate then more meekly notes, "[I]t would seem clear that . . . the groundwork was prepared by Hennigan and Russell's introduction and demonstration." (Id. at 17.) But no proof connects the groundwork to a sale, let alone thousands of dollars of sales occurring years later, including sales of the X-26, a product that neither Russell nor Hennigan demonstrated and that was introduced long after Taser terminated its relationship with them and long after Hennigan's death. Hennigan finally relies upon the stipulation allowing for the admission of Exhibit 350 to argue it is entitled to $9,600.26 in unpaid commissions. But the Estate has not submitted any proof to show that Taser received payment before February 21, 2000 on the sales for which a commission was not paid, the relationship between Taser and Hennigan terminated that date. And the Estate cannot point to any contract provision entitling it to revenues from payments received after termination. II. THE ESTATE FAILED TO PROVE BY A PREPONDERANCE THAT A CONTRACT EXISTED. Hennigan and Russell were marketing representatives for Taser who marketed the Air-Taser and its related products to law enforcement agencies from February, 1998 until February 21, 2000, when Taser terminated the relationship. No written contract governed the relationship, and the evidence at trial shows no contract was formed. (Exhibit 32.) In particular, no evidence suggests the Estate's claim that they agreed that Hennigan would have the right to commissions on sales to an account perpetually or forever.

2

505111:3/10321-00 Case 2:00-cv-00945-ROS 299669v3

Document 172

Filed 11/18/2005

Page 2 of 16

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

A.

The Elements Of A Contract Are Missing.

A breach of contract claim requires proof of an offer, acceptance, and consideration.1 Proof of a contract granting a perpetual right requires proof in

unequivocal language granting that right.2 The Estate offered no evidence of a contract for perpetual commissions. Russell's testimony as to what he believed the agreement with Taser was is vague and equivocal. Russell was never a part of the discussions between Taser and Hennigan as to the parties' relationship. (8/31/05 ­ Russell ­ 159-60.)3 Russell's knowledge comes only from what Hennigan purportedly told him. (Id. at 161-62.) But what Russell understood does not equal a contract. Expectation does not equal an agreement. Russell's

"understanding" is based on hearsay, and is not sufficiently definite to support a finding that a contract for perpetual commission existed. Russell's reliance on his conversation with Steve Tuttle ("Tuttle"), Taser's Director of Government Affairs, does not prove a contract for perpetual commissions.4 During the trial, Russell testified as follows regarding his conversation with Tuttle: Q: A: Q:
1

Did you and Mr. Tuttle have any conversation during this drive from Atlanta to Alabama? Yes. And what did you talk about?

See Savoca Masonry Co. v. Homes & Sons Constr. Co., 112 Ariz. 392, 542 P.2d 817 (1975).
2

See William B. Tanner Co., Inc. v. Sparta-Tomah Broadcasting Co., Inc., 716 F.2d 1155 (7th Cir. 1983); Mid-Southern Toyota, Ltd. v. Bug's Imports, Inc., 453 S.W.2d 22 544 (Ky. Ct. App. 1970); Borough of West Caldwell v. Borough of Caldwell, 26 N.J. 9, 138 A.2d 402 (1958); Uintah Basin Med. Center v. Hardy, 54 P.3d 1165 (Utah 2002). 23 Taser will be citing to the trial transcript by first supplying the date of the testimony, second supplying the name of the witness testifying and third the page or 25 pages from the transcript containing the testimony on which the statement is based.
24
3

See Taser's Trial Memorandum on Rule 801(d)(2)(D), dated and filed August 29, 2005, for further discussion of why Tuttle's statements are not statements of a party27 opponent entitled to a hearsay exception under Rule 801, Fed.R.Evd. Taser renews its objection to the admission of any statements by Tuttle regarding Taser's contractual 28 relationship with Hennigan. See 8/31/05-92 for Taser's objection during the trial.
26 3
505111:3/10321-00 Case 2:00-cv-00945-ROS 299669v3

4

Document 172

Filed 11/18/2005

Page 3 of 16

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

A:

Well, being that Steve was the first one I had ­ live person I had met from Taser, he told me all about the company and he was talking about who was involved in it, and we discussed the company for a while, and what their goals were, I told him what my goals were, and why I decided to take this, knowing I wouldn't get any compensation for two or three years. But as long as the accounts that I developed were protected, and I would get the revenue off of them, as long as the account was active, that was why I stayed, that was why I did this. That was why I agreed to do it on my money and my time and my efforts. And you told that to Mr. Tuttle? Yes. And what did Mr. Tuttle say?

Q: A: Q:

[objection and discussion] A: He said, "I know that."

(8/31/05 ­ Russell - 91-92.) This testimony does not demonstrate a contract for perpetual commissions between Taser and Hennigan. At most, it shows only what Russell thought the arrangement was and why he worked with Hennigan ­ that as long as the accounts were active he would get revenue. The testimony begs the question of what is an "active account." An active account to Taser could mean an account he was working and for only so long as he worked the account. (9/1/05 ­ Smith - 307-308.) Russell's statement to Tuttle also fails to specify the degree to which the "accounts . . . were [to be] protected" or when Russell became the person who "developed" the account. Further, Tuttle's response is indefinite. Tuttle's response could simply be his acknowledging that he understood that what Russell stated or that he understood what Russell believed and nothing more. Furthermore, Russell did not change his position based on Tuttle's

comments ­ he had already started to work for Taser and continued to do so based on what Hennigan told him. (8/31/05 ­ Russell ­ 50, 52, 161-62.) No written contract exists regarding perpetual commissions. (8/31/05 ­ Russell ­ 165.) Taser's employees, Kathy Hanrahan ("Hanrahan") and Rick Smith ("Smith") both testified that Hennigan was not entitled these commissions. (9/1/05 ­ Hanrahan ­ 228; 9/1/05 ­ Smith ­ 307-08; Exhibit 32.)
4

505111:3/10321-00 Case 2:00-cv-00945-ROS 299669v3

Document 172

Filed 11/18/2005

Page 4 of 16

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Proof of a claim in contract requires that the party claiming a breach prove the terms of the contract with reasonably definite terms. If a contract is too vague and indefinite it cannot be enforced.5 The Estate offered no evidence that would demonstrate any definite contractual terms. The Estate offered no proof of the bargained-for

consideration flowing to Taser either in the form of the benefit Hennigan promised to provide to Taser or the detriment Hennigan promised to incur. The Estate's reliance on Commerce Mortgage Co. v. Title Realty Corp.6 to support the existence of an oral contract between Taser and Hennigan is misplaced. In

Commerce Mortgage Co. the court found enough evidence to support a fining of an oral agreement, and thus, awarded contract damages. Mr. Fineg, who participated in the negotiations, testified about the promises made and accepted and the consideration which supported them.7 Here, no sufficient evidence supports a contract for perpetual

commissions between Taser and Hennigan. B. No Evidence That Any Accounts Were Assigned Solely To Hennigan.

The Estate's claim that Hennigan was assigned accounts for perpetual commissions is not supported by the evidence. Russell's testimony alone cannot support this assertion because Russell was never a part of the discussion between Taser and Hennigan regarding the accounts. (8/31/05 ­ Russell - 160.) But Smith was a party to those discussions and he testified that when he wrote Exhibit 316, Taser had no business relationship with Hennigan with respect to M-26. When Smith wrote Exhibit 316, he was discussing launching a new product and an entirely new distribution program. (9/1/05 ­ Smith ­ 313; Exhibit 316.) Smith never promised any form of protetation for Hennigan's alleged accounts before sending Exhibit

See Savoca Masonry Co. v. Homes & Sons Constr. Co., 112 Ariz. 392, 542 P.2d 817 (1975). 26
6

5

27
7

78 Ariz. 304, 279 P.2d 717 (1955). Commerce Mortgage Co. at 306-07; 279 P.2d 719-20.
5

28

505111:3/10321-00 Case 2:00-cv-00945-ROS 299669v3

Document 172

Filed 11/18/2005

Page 5 of 16

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

316 containing the proposal which Hennigan ultimately rejected. (9/1/05 ­ Smith ­ 315; Exhibit 316.) C. Hennigan Did Not Fully Perform.

The evidence presented at the trial paints conflicting pictures of what full performance might have been. Russell, who was never a party to any of the discussions between Hennigan and Taser, stated that full performance was contacting an agency about Taser's products. (8/31/05 ­ Russell ­ 78.) Russell then later testified that full performance was a successful demonstration and that demonstrations were important. (8/31/05 ­ Russell ­ 171.) Thus, even Russell cannot decide what full performance was. On the other hand, Taser's employees testified that full performance required not only a demonstration but constant contact with a law enforcement agency. (See, e.g., 9/1/05 Smith ­ 307-308.) Smith testified that Hennigan, himself, recognized that selling was an ongoing process and required continual work. (9/1/05 ­ Smith ­ 337.) Indeed, Exhibit 91 contains Hennigan's acknowledgment that he was responsible for collections. (Exhibit 91.) The law enforcement agencies required lots of attention and follow-up. For

example, the sales to Charlotte Mecklenburg Police Department required Stacie Sundberg ("Sundberg") of Taser to providing free training and engage in many phone conversations with the trainers and sergeants before this agency made its first Taser purchases in 2002. (9/2/05 ­ Sundberg ­ 449-450.) In later sales to the Charlotte Mecklenburg Police Department, Sundberg had to constantly call the agency, send free cartridges, and allow the agency's trainers to attend Taser's annual master instructor conference. (9/2/05 ­ Sundberg - 451). If the Court cannot determine what full performance is, then it cannot find a contract based on equitable estoppel. Moreover, even if the Court concludes that if a

6

505111:3/10321-00 Case 2:00-cv-00945-ROS 299669v3

Document 172

Filed 11/18/2005

Page 6 of 16

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

contract existed, the statute of frauds precludes enforcement.8 Taser is not estopped from relying upon the Statute of Frauds.9 The Estate cites to Pahl v. Comm. of Internal Revenue10 for the proposition that estoppel may be applied where one is induced by another to "seriously change his position in reliance on the contract." But any reliance by Russell on Tuttle's comments did not change either Russell or Hennigan's position. Hennigan and Russell were

soliciting accounts before and after Tuttle's comments. They changed nothing about how they worked with Taser. Moreover, equitable estoppel must be based on justifiable reliance, which is absent here. The Estate's reliance on Wilson v. Metheny11 is also misplaced. Wilson involved full performance of an option to purchase real property contract. Here, Hennigan and Russell did not fully perform. D. A Contract Cannot Be Based On Documents Created After-The-Fact.

Exhibit 316, the December 23, 1999 letter from Smith to Hennigan, is an offer for a future relationship between Taser and Hennigan. Nowhere in Exhibit 316 is there an offer or recognition of any agreement for Hennigan to receive commissions on accounts eternally. Exhibit 316 was not a memorialization of any past arrangement between Taser and Hennigan. (9/1/05 ­ Smith ­ 313.) The "negatives" referred to in Exhibit 96 were that "there would be more distributors, and hence more competition in the marketplace." (9/1/05 ­ Smith ­ 302.) Indeed, Hennigan recognized this in Exhibit 13 when he wrote a letter complaining about "the addition of new dealers and sales representatives . . ."
8

Chevron USA, Inc. v. Schrimer, 11 F3d 1473 (9th Cir. 1993) (applying Arizona law, court rules partial performance does not bar application of the Statute of Frauds); 24 Edward Greenband Enterprises of Arizona v. Peppin, 112 Ariz. 115, 538 P.2d 539 (1975) (if reasonable time is beyond one year statute of frauds applies).
23 25 26
9

San Francisco Browning Corp. v. Bowman, 52 Cal. 2d 607, 343 P.2d 1 (1959).

150 F.3d 1124, 1130 (9th Cir. 1998), citing Monarco v. Lo Greco, 35 Cal.2d 27 621, 220 P.2d 737 (1950).
11

10

28

72 Ariz. 339, 236 P.2d 34 (1951).
7

505111:3/10321-00 Case 2:00-cv-00945-ROS 299669v3

Document 172

Filed 11/18/2005

Page 7 of 16

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27

Mr. Trager admitted that Hennigan rejected the offer made in Exhibit 316. (9/6/05 ­ 569.) The Estate cannot now use a rejected offer to attempt to prove the elements of a prior alleged offer.12 All Exhibit 316 demonstrates is that Taser was attempting to offer Hennigan some security for accounts he actively worked. These accounts would be assigned to Hennigan for future work and, if by chance another distributor made a sale to one of these accounts, Hennigan would receive a percentage override on the paid commissions for a predetermined amount of time. Just as Exhibit 316 is not proof of the alleged contract, neither is Exhibit 97. Though that September 20, 1999 e-mail from Hanrahan to Hennigan refers to tagging, "tagging" only meant that Hennigan's name was put next to the customer lead so Taser would know Hennigan was working on that particular lead. (8/31/05 ­ Hanrahan ­ 226.) Taser's database was merely a marketing tool to coordinate sales efforts. Moreover, the e-mail states that Taser unilaterally "implemented an account management system." Implementation was not the result of an agreement between Taser and Hennigan or any bargained-for exchange. Nor does Exhibit 339, Taser's Prospectus Summary for May 8, 2001, support Hennigan's claims. The Prospectus specifically states that, "the length of our [Taser's] sales cycle may range from 60 days to a year or more." (Exhibit 339 at TAS01919.) The Estate uses the "year or more" language but ignores the "60 days" language. In fact, Taser recognized that sales can occur as little as a few weeks after its products were introduced to a law enforcement agency. Exhibit 340, Taser's Form 10-KSB for fiscal year ending December 31, 2002, states, "the decision-making process can take as a few weeks or as long as several years." (Exhibit 340 at TAS01998.) Smith's testimony also supports the potential for short sales cycles. (9/1/05 ­ Smith ­ 296-97.) Russell's expectation that sales would take many years is both no substitute for a contract and false.

Indeed, the Estate's counsel Mr. Trager stated during the trial, "I do not look to have Exhibit 316 as the basis for a contractual remedy." 28
8
505111:3/10321-00 Case 2:00-cv-00945-ROS 299669v3

12

Document 172

Filed 11/18/2005

Page 8 of 16

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

E.

The Court Already Ruled That Taser Was Entitled To Terminate Hennigan.

The Estate asserts that a "contracting party may not obtain discharge if its own act rendered performance impossible." The assertion is inapplicable. The agreement

between Taser and Hennigan, for Hennigan to act as a marketing representative, was terminable at will. (See Court's Order, dated June 8, 2005, at 4 and 14.) Taser properly terminated its relationship with Hennigan. (Id., "Having found the agreement was

terminable at will, the Court also impliedly found that Taser properly terminated the agreement".) The only triable issue that remained after the Court found the relationship terminable at will, was whether or not, despite the termination, Hennigan was still entitled to commissions on future sales made by Taser or its other distributors. (Id. at 4, 12, and 14.) The Estate has not proven any contract provision to support that claim. Hennigan's citation to Unruh v. Smith13 is inapplicable. In Unruh, an

unquestionable contract between the parties existed. The parties had a written contract concerning the growing and sale of cucumbers.14 The defendant in Unruh refused to process, ship and sell plaintiff's cucumbers, as the written contract required. After they refused, plaintiff did not deliver any more cucumbers to defendant to sell. The Unruh court held that "where a party to a contract prevents the fulfillment of a condition or its performance by the adverse party, he cannot rely on such condition to defeat his liability."15 Thus, the defendant in Unruh could not claim that plaintiff's lack of delivery of the cucumbers released it from its duties under the contract. Taser and Hennigan never had a written agreement, or any agreement, granting Hennigan perpetual commissions. Taser did not prevent Hennigan from marketing to law enforcement agencies while he was still its representative. Taser did give Hennigan the
13

26
14

123 Cal.App.2d 431, 437, 267 P.2d 52, 57 (D. Cal. 1954). Id. at 431-432, 267 P.2d at 53-54. Id. at 437, 267 P.2d at 57.
9

27
15

28

505111:3/10321-00 Case 2:00-cv-00945-ROS 299669v3

Document 172

Filed 11/18/2005

Page 9 of 16

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

opportunity to engage in a more structured and protected marketing arrangement when it sent Hennigan Exhibit 316; however, Hennigan refused to accept the terms of Exhibit 316 and Taser thereafter rightfully terminated Hennigan. Hennigan's assertion that Taser prevented Hennigan's fulfillment of a contract condition that would entitle Hennigan to perpetual commissions is therefore unfounded. There cannot be a contract condition when there is no contract. III. THE ESTATE FAILED TO DEMONSTRATE BY A PREPONDERANCE OF THE EVIDENCE THAT IT IS ENTITLED TO ANY DAMAGES UNDER QUANTUM MERUIT. As an alternative to the breach of contract claim, the Estate claims that it is entitled to the reasonable value of the services that Hennigan and Russell performed for Taser. In order to prevail on this claim, the Estate must demonstrate that: (1) valuable services were rendered to Taser; (2) Taser was unjustly enriched at the expense of Hennigan; and (3) Hennigan conferred such benefit under the circumstances which would render Taser's retention of the value without payment inequitable.16 The mere fact that one party confers a benefit on another is not by itself sufficient to require the other to make restitution; retention of the benefit must be unjust.17 The Estate has not demonstrated that Hennigan or Russell conferred any lasting benefit on Taser with the sparse contact and demonstrations they conducted prior to the termination on February 21, 2000. The Estate offered no evidence at trial to support a causal connection between Hennigan's and Russell's actions and the sales procured by Taser and others after the termination in 2000. In fact the opposite is true. Although Hennigan affected a minimal amount of sales, his marketing techniques bestowed no lasting benefit on Taser after his termination. (See Plaintiff's Post-Trial Revised and Supplemental Findings of Fact at ¶¶ 24-33, 4865.) For example, the Estate offered no evidence that Hennigan's introduction to the
16

27
17

See Landi v. Arkules, 172 Ariz. 126, 135, 835 P.2d 458, 467 (App. 1992). See Pyeatte v. Pyeatte, 135 Ariz. 346, 353, 661 P.2d 196, 203 (App. 1982).
10

28

505111:3/10321-00 Case 2:00-cv-00945-ROS 299669v3

Document 172

Filed 11/18/2005

Page 10 of 16

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

New York Police Department ("NYPD") was the causal factor for the NYPD's later purchases from Taser, or that Taser would not have been able to get the introduction without Hennigan. Indeed a threatening letter Hennigan sent to the NYPD set the relationship back several years. (9/2/05 ­ Smith ­ 392-395.) Further, Hennigan built no lasting relationships with the law enforcement agencies that benefited Taser. Taser and its other distributors had to either build or rebuild relationships with these agencies. Thus, when Sundberg worked with Charlotte

Mecklenburg, her contacts had never heard of Buzz Russell. (9/2/05 ­ Sundberg ­ 46263.) To make a sale, Sundberg had to provide free training and participate in many telephone conversations with their trainers and sergeants. (9/2/05 ­ Sundberg ­ 449-51.) One of the most telling examples of the lack of benefit conferred by Hennigan involves the Louisiana State Penitentiary. Hennigan and Russell marketed to this agency and hold this out as an example of their hard work ­ yet the Louisiana State Penitentiary system has a ban on Taser's products. (8/31/05 ­ Russell ­ 118-21, 126-27; 9/1/05 ­ Russell ­ 189-90.) When the demonstration occurred, it was illegal for the Louisiana State Penitentiary to purchase Taser's weapons. Certainly Hennigan's marketing efforts to the Louisiana State Penitentiary conferred no benefit on Taser because that agency is legally forbidden from purchasing the products. Furthermore, no proof was offered that the inclusion of Major Cash's quotation in Taser's brochure resulted in any lasting benefit to Taser. The quote was placed in a brochure with several other quotes from other law enforcement personnel. What impact, if any, Major Cash's quote had is unknown and thus not sufficient to support a finding of damages under quantum meruit. The Estate has the burden of demonstrating the benefit of Hennigan's and Russell's services conferred upon Taser and it failed to do so. The burden cannot be shifted to Taser. No reasonable value therefore exists for Hennigan's services for which

11

505111:3/10321-00 Case 2:00-cv-00945-ROS 299669v3

Document 172

Filed 11/18/2005

Page 11 of 16

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

he was not already compensated by way of commissions paid before his termination. Taser was not unjustly enriched. The amount of recovery, if any, permitted under the theory of quantum meruit is the reasonable value of the services rendered.18 Hennigan was paid for the services he rendered before his termination. The Estate offered no expert testimony at the trial to either support or quantify any damages under the quantum meruit theory.19 The Estate could have easily had its expert testify but chose not to. The Estate's attempt to state that the Court told it an expert was unnecessary is unfounded. During the pretrial conference, the Court agreed with the Estate's counsel that it did not think an expert was necessary but it gave counsel the opportunity "to think of anything today as to what the expert would testify to concerning quantum meruit." That counsel could not think of anything is not Taser's fault. The Estate, not the Court, needs to present its case and analyze before trial what is needed to prove all the elements of the claim. The "time for testing of proof is the time of trial. Our judicial system does not contemplate that the rights of litigants shall be held in abeyance for months or years in order that hindsight may provide a more accurate appraisal of evidence."20 When

deciding whether to allow a party to reopen a civil case, the lower court should consider: (1) the value of the evidence; (2) the reason the evidence was not introduced earlier; and (3) the prejudice to the non-moving party.21 The Estate should not now be allowed to reopen its case to present expert testimony. This matter has already been before this court for over five years. The Estate had ample opportunity to present its expert at the trial and it choose not to. The Estate has the burden of proving its claims during its case in chief. To allow the reopening of the Estate's case would greatly prejudice Taser.
18

25
19

See Landi v. Arkules, 172 Ariz. 126, 135, 835 P.2d 458, 467 (App. 1992). See Arizona Superior Mining Co. v. Anderson, 33 Ariz. 64, 262 P. 489 (1927). Locklin v. Switzer Bros., 299 F.2d 160, 169 (9th Cir. 1961). Garcia v. Woman's Hosp. of Texas, 97 F.3d 810, 814 (5th Cir. 1996).
12

26
20

27
21

28

505111:3/10321-00 Case 2:00-cv-00945-ROS 299669v3

Document 172

Filed 11/18/2005

Page 12 of 16

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Taser specifically did not depose the Estate's expert because it stated that the expert would not testify at trial. The Estate is not entitled to another bite of the apple. IV. MOTION TO DISMISS STANDARD. The standard of review for a motion to dismiss in a bench trial is that the judge, as the fact finder, must conclude that the plaintiff has not made out a case. Wilson v. United States,22 distinguishes a directed verdict from a dismissal under Rule 41(b), Fed.R.Civ.P. Rule 41(b) provides: For failure of the plaintiff to prosecute or to comply with these rules or any order of court, a defendant may move for dismissal of an action or of any claim against the defendant. Unless the court in its order for dismissal otherwise specifies, a dismissal under this subdivision and any dismissal not provided for in this rule, other than a dismissal for lack of jurisdiction, for improper venue, or for failure to join a party under Rule 19, operates as an adjudication upon the merits. The Wilson court acknowledges that Rule 41(b) also provides that after the Estate, in an action tried by the court without a jury, has completed the presentation of its evidence, Taser, without waiving its right to offer evidence in the event the motion is not granted, may move for a dismissal on the ground that upon the facts and the law the Estate has shown no right to relief. The court, as trier of the facts, may then determine them and render judgment against the Estate. The role of the court in granting a Rule 41(b) dismissal is different than its role in directing a verdict in a jury case where the judge is not the trier of facts.23 Where the judge is the trier of facts she may weigh and consider the evidence and sustain Taser's motion though Hennigan's evidence establishes a prima facie case that would have precluded a directed verdict for defendant in a jury case."24
22

645 F.2d 728, 730 (9th Cir. 1981). 23 26 See Wilson at 730. 24 See Wilson quoting 5 Moore's Federal Practice 41.13[4] at 41-193 through 94 27 (2d ed. 1980); see also Southern Arizona York Refrigeration Co. v. Bush Manufacturing th 28 Co., 331 F.2d 1, 6 (9 Cir. 1964).
13
505111:3/10321-00 Case 2:00-cv-00945-ROS 299669v3

Document 172

Filed 11/18/2005

Page 13 of 16

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

As demonstrated above, the Estate's counsel has failed to submit any evidence at trial upon which a contract for perpetual commissions or damages in quantum meruit can be found. Neither the law nor the facts are on the side of the Estate. The Court must, therefore, grant Taser's motion and dismiss the Estate's claims in their entirety. V. DEFENDANT IS NOT ENTITLED TO JUDGMENT IN THE AMOUNT OF $9,600.16. PARTIAL SUMMARY

First and foremost, the parties' stipulation regarding Exhibit 350 does not concede that the amounts in that exhibit are the commissions due to Hennigan. (See Stipulation, dated August 30, 2005.) Nor did Taser stipulate that the amounts the Estate calculated for the years 1998 and 1999 were amounts owed to Hennigan. The Estate asserts that it is entitled to commissions on sales made to 31 law enforcement agencies based largely on demonstrations conducted by Russell in 1998 and 1999. (See Exhibit A attached to Defendant's Memorandum In Opposition To Motion To Dismiss Counterclaims, dated October 10, 2005, for a full list of the 31 law enforcement agencies the Estate is claiming commissions are due.) Of those 31 agencies, only eight have sales prior to February 21, 2000, attributed to the work performed by Hennigan and Russell prior to the termination on February 21, 2000. Those eight agencies are:

Charlottesville, VA; Clarkstown Police Department; Lancaster Police, SC; Mecklenburg County Sheriff; New York Police Department; Ogdenberg, NY; Wilmington, NC; and Wisconsin Department of Corrections. With respect to those sales for which it claims a commission, the Estate has not shown that (1) Taser received payment before it terminated Hennigan; or that (2) it is entitled to commissions on payments received after termination. The sales to the remaining 23 agencies were made either directly by Taser or one of its other distributors ­ often times after February 21, 2000. The Estate is attempting to collect commissions on sales made by other Taser distributors after Hennigan was terminated. For example, the first sales to the Anderson County Sheriff were in February, April and June of 2002 by Southeastern (Exhibit 350 at
14

505111:3/10321-00 Case 2:00-cv-00945-ROS 299669v3

Document 172

Filed 11/18/2005

Page 14 of 16

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

9), almost four years after Russell performed a demonstration for this agency on September 29, 1998. (8/31/05 ­ Russell - 107.) The Estate has offered no evidence that there is any causal connection between a demonstration in 1998 and a sale four years later by another Taser distributor. Another telling example involves the Charleston South Carolina Police Department. Russell conducted a demonstration for this agency on December 18, 1998, (8/31/05 ­ Russell - 147-148) and yet the first sales to this agency were not until May and September of 2004 by Lawmen's Supply. (Exhibit 350 at 24.) The Estate tries to do this again with Statesville agency. Russell conducted a demonstration for that agency in December 1999. (8/31/05 ­ Russell - 155.) The first sales to Statesville were in May and September of 2004 by Lawmen's Supply. (Exhibit 350 at 34.) Again, the Estate offered no evidence that there is any causal connection between demonstrations in 1998 and 1999 and sales over four years later by other Taser distributors. The Estate is therefore not entitled to any amount by way of summary judgment. Nor would it be entitled to treble damages under A.R.S. § 23-355 because Hennigan was never an employee of Taser. However, if the Court does find that the Estate is entitled to payment for any sales in 1998 or 1999, then Taser is entitled to submit evidence of the offset of monies owed to Taser by Hennigan. VI. CONCLUSION. The motion to dismiss should be granted. No contract was shown. The services were not the sine qun non of the benefit deemed. The value of the benefit, if any, was not proved. RESPECTFULLY SUBMITTED this 18th day of November 2005. HYMSON & GOLDSTEIN, P.C.

/s/David B. Goldstein David B. Goldstein Holly L. Gibeaut Attorneys for Plaintiff/Counterdefendant
15

505111:3/10321-00 Case 2:00-cv-00945-ROS 299669v3

Document 172

Filed 11/18/2005

Page 15 of 16

1 2

CERTIFICATE OF FILING

I hereby certify that on November 18, 2005, I electronically transmitted the attached document to the Clerk's office via the CM/ECF filing system for filing and 3 transmittal of a Notice of Electronic Filing to the following CM/ECF registrants:
4 5

Leslie Trager
C/O ROSEMARY J. SCHOCKMAN

SHOCKMAN LAW OFFICE, P.C. 6 8170 North 86th Place, #102 Scottsdale, AZ 85258 7 Attorneys for Defendant/Counterclaimants Rosemary J. Shockman SHOCKMAN LAW OFFICE, P.C. 9 8170 North 86th Place, #102 Scottsdale, AZ 85258 10 Attorneys for Defendant/Counterclaimants
8 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
505111:3/10321-00 Case 2:00-cv-00945-ROS 299669v3

/s/Barrie Peagler

16

Document 172

Filed 11/18/2005

Page 16 of 16