Free Response in Support of Motion - District Court of Arizona - Arizona

1 Thomas A. Maraz (Bar No. 010993) Maureen A. Welsh (Bar No. 020954) 2 GALLAGHER & KENNEDY, P.A. 2575 East Camelback Road Phoenix, Arizona 85016-9225 3 (602) 530-8000 4 Attorneys for Defendants 5 6 7 UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA No. CIV 03-0150-PHX-EHC DEFENDANTS' RESPONSE TO PLAINTIFFS' SEPARATE STATEMENT OF FACTS IN OPPOSITION TO DEFENDANTS' SECOND MOTION FOR PARTIAL SUMMARY JUDGMENT

8 Physical Excellence, Inc., an Arizona corporation; Body-Of-Change, Inc., an Arizona corporation; Body Of Change International, 9 L.L.C., a Delaware limited liability company, 10 Plaintiffs, 11 vs. 12 Stephen Dow and Linda Dow, husband and 13 wife; Dan Fahey and Jane Doe Fahey, husband and wife; Stephen Dow d/b/a Achieve Fitness; 14 Beyond Fitness, L.L.C., a North Carolina limited liability company; John Does 1-V; Jane 15 Does 1-V; Black And White Corporations 1-V, 16 17 Defendants.

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Defendants, by and through its undersigned counsel, and in accord with Local

18 Rule 56.1 of the F. R. Civ. P., hereby responds to Plaintiffs' Statement of Facts in 19 Support of Its Response to Defendants' Second Motion for Partial Summary Judgment 20 ("PSOF2"). 21 22
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PLAINTIFFS' STATEMENT OF FACTS INTRODUCTORY STATEMENT Some of Plaintiffs' "facts" are no more than legal conclusions. As such, they are

4 inappropriate under Rule 56 motion practice. Defendants reserve the right to address 5 those legal conclusions in the appropriate forum, if necessary. 6 Also, some of the facts presented in Plaintiffs' Statement of Facts are not relevant

7 or dispositive as to the issues pending before this Court on Defendants' Second Motion. 8 While not relevant, Defendants respond so as not to concede or waive its positions or 9 defenses available to it at trial. 10 Finally, most of Plaintiffs' Statement of Facts is supported only by Richard

11 Hubbard or John Gaston's Declaration. When responding to the Statement of Facts, 12 Defendants intend that any qualified admissions or objections also apply to those portions 13 of the Declaration cited in support of that Statement of Fact. 14 15 1. DEFENDANTS' RESPONSE PSOF2 ¶¶ 1-23. Defendants reiterate and hereby incorporate the objections

16 outlined in paragraphs 1-18 of Defendants' Response to Plaintiffs' Statement of Facts in 17 Support of Its Response to Defendants' First Motion for Partial Summary Judgment 18 [DKT 237]. 19 2. PSOF2 ¶¶ 24-25. Admit only for purposes of this motion for summary

20 judgment and not intended to be binding otherwise. Plaintiffs are put to their burden of 21 proof on these issues. 22
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PSOF2 ¶¶ 26-27. Admit only for purposes of this motion for summary

2 judgment and not intended to be binding otherwise. Plaintiffs are put to their burden of 3 proof on these issues. Dispute as being irrelevant to the issue of tortious interference 4 with the expectancy of receiving the Global contract. Defendants also dispute the 5 language "without notice of any kind" as being overly broad and an improper legal 6 conclusion. 7 4. PSOF2 ¶¶ 28-30. Admit only for purposes of this motion for summary

8 judgment and not intended to be binding otherwise. Plaintiffs are put to their burden of 9 proof on these issues. 10 5. PSOF2 ¶ 31. Defendants dispute these "facts" because they are arguments

11 of counsel and contain legal conclusions regarding the inability for BOC Int'l to seek the 12 Global contract due to its previous commitment to Fitworks. Defendants also dispute the 13 language as overly broad with respect to "any agreement" and "an agreement with 14 Global." Even taking these facts as true, Defendants dispute that they are dispositive of 15 whether BOC Int'l was precluded from seeking the Global contract due to its contract 16 with Fitworks. 17 6. PSOF2 ¶¶ 32-33. Admit only for purposes of this motion for summary

18 judgment and not intended to be binding otherwise. Plaintiffs are put to their burden of 19 proof on these issues. 20 7. PSOF2 ¶ 34. Admit only for purposes of this motion for summary

21 judgment and not intended to be binding otherwise. Plaintiffs are put to their burden of 22 proof on these issues. Defendants dispute the inference that the exclusivity issue was the
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1 only problem facing BOC Int'l in securing the Global contract. Defendants also dispute 2 the inference that equates "moving forward" with actually signing the contract, the latter 3 being an action that never occurred. 4 8. PSOF2 ¶ 35. Defendants dispute the claim that Mr. Gaston can assert what

5 Mr. Dow or Global did or did not know as speculative, at best. Defendants further assert 6 that, even if these facts are true, they are not dispositive of the issue as to whether or not 7 Plaintiffs were bound by an exclusivity agreement with Fitworks. Otherwise, Defendants 8 admit these facts only for purposes of this motion for summary judgment and assert that 9 they are not intended to be binding otherwise. Plaintiffs are put to their burden of proof 10 on these issues. 11 9. PSOF2 ¶ 36. Admit only for purposes of this motion for summary

12 judgment and not intended to be binding otherwise. Plaintiffs are put to their burden of 13 proof on these issues. Defendants dispute the language "finalize an agreement with 14 Global" as being overly broad, speculative, and unsupported by the factual record. The 15 fact is that the negotiations between Global and BOC Int'l were still ongoing and that, as 16 a result, nothing had been finalized. 17 10. PSOF2 ¶¶ 37, 38. Admit that Mr. Dow engaged in a single lunch meeting

18 and phone conversation with Global about a contract with Global. Deny to the extent 19 these facts infer that Mr. Dow's involvement was anything more than these minimal 20 contacts. Defendants also dispute the claim that Triangle was a company that Mr. Dow 21 was starting. Mr. Dow has never, nor currently has, any control or ownership of 22 Triangle. Defendants admit that Mr. Dow informed Mr. Pulliam that BOC Int'l was "not
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1 going bankrupt if that's what you mean" and that they were "halting growth" for one 2 year. However, Defendants dispute the inference that these statements are in any way 3 improper, false, slanderous or defamatory. Moreover, Mr. Dow's remarks regarding 4 BOC Int'l's fiscal stability were made in direct response to a question by Mr. Pulliam 5 regarding rumors he had heard. 6 11. PSOF2 ¶ 39. Admit only for purposes of this motion for summary

7 judgment and not intended to be binding otherwise. Plaintiffs are put to their burden of 8 proof on these issues. 9 12. PSOF2 ¶¶ 40-42. Defendants dispute these facts as speculative, overly

10 broad and unsupportable by the record. Although Defendants admit, only for purposes of 11 this motion for summary judgment, that Global and BOC Int'l were engaged in 12 negotiations, there is no evidence conclusively showing that a deal was to be "finalized." 13 Defendants further assert that, even if these facts are true, they are not dispositive of the 14 issue that the Global contract was ever "finalized." Moreover, Defendants dispute the 15 omission of the fact that the Global deal was never actually completed and that, in truth, 16 the only "finalized" contract was the Triangle contract with Global. Defendants also 17 dispute the use of the language "shortly after November 28, 2002" as overly broad. 18 13. PSOF2 ¶ 43. Defendants dispute these facts as mischaracterizing the

19 testimony of Mr. Dow and, therefore, these facts are not supported by the record. The 20 cited portion of Mr. Dow's testimony reads as follows: 21 22
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Q. (By Mr. Kolsrud) How soon after you went to work with Samson did you staff up and service the local fitness clubs? 5
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A. About a month. Q. A month. Like January 2003? A. Yes.

4 This testimony does not, in any way, establish that "Triangle did not provide personal 5 training services before terminating BOC Int'l's oral lease/licensing agreement on 6 October 24, 2002." Defendants also dispute that the language "personal training 7 services" is overly broad and improperly infers that Triangle was not involved in any 8 fashion in the health club business. In truth, Triangle was involved in the health club 9 business generally for years prior to the events giving rise to this litigation. 10 14. PSOF2 ¶¶ 44, 45. Admit only for purposes of this motion for summary

11 judgment and not intended to be binding otherwise. Plaintiffs are put to their burden of 12 proof on these issues. 13 15. PSOF2 ¶ 46. Admit only for purposes of this motion for summary

14 judgment and not intended to be binding otherwise. Plaintiffs are put to their burden of 15 proof on these issues. Defendants dispute the use of the phrase "disgruntled ex16 employee" in reference to Mr. Keuillian. The record cited by Plaintiffs does not support 17 the claim that Mr. Keuillian was either disgruntled or an ex-employee. In fact, the record 18 cited states that the information came from "a gentleman named Bedros Keullian, who 19 was still employed by Body of Change... ." Therefore, Plaintiffs claims are unsupported 20 by the record and are no more than an attempt to draw legal conclusions and speculate as 21 to the real facts at issue. In addition, Mr. Dow did not testify that BOC Int'l was stopping 22 all growth, but rather that they were halting all growth "for one year."
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PSOF2 ¶ 47. Defendants dispute the facts as mischaracterizing the cited

2 testimony of Mr. Dow. The cited testimony establishes that Mr. Dow did not call 3 Mr. Gaston or Mr. Gregg to see if they were negotiating a deal with Global. It does not, 4 as Plaintiffs claim in paragraph 47, support the proposition that Mr. Dow failed to verify 5 the rumor that BOC Int'l was "halting growth." Accordingly, the language in paragraph 6 47 referencing a "rumor" is overly broad as it is impossible to determine which rumor 7 Plaintiffs are referring to. Further, the word "rumor" is the term assigned by Plaintiffs' 8 attorney during the deposition. Otherwise, Defendants admit only for purposes of this 9 motion for summary judgment and not intended to be binding otherwise. Plaintiffs are 10 put to their burden of proof on these issues. 11 17. PSOF2 ¶ 48. See ¶ 16 above. Defendants dispute the facts as

12 mischaracterizing the cited testimony of Mr. Dow. The cited testimony from Mr. Dow 13 actually reads as follows: 14 15 16 17 18 19 Q. (By Mr. Kolsrud) So you passed on this rumor to determine if there was still negotiation going on? Is that what you said? A. The motive for saying I've heard Body of Change has halted growth was my way of conveying to them that if that implied that negotiations had broken off between them and Body of Change we would be interested in doing the deal. (emphasis added). Moreover, the language used is overly broad and speculative. Nonetheless,

20 Defendants admit that Mr. Dow acted in accordance with the deposition testimony 21 detailed above. 22
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PSOF2 ¶ 49. Defendants dispute the facts as mischaracterizing the cited

2 testimony of Mr. Dow. Defendants also dispute these facts as being speculation on the 3 part of Plaintiffs' counsel containing improper legal conclusions. The record does not 4 reflect that Triangle was "Defendant Dow's new company." This is because Mr. Dow 5 has never had any ownership or control over Triangle, which was entirely owned by 6 Mr. Sampson and Mr. Agresti [now, only by Mr. Sampson]. Otherwise, Defendants 7 admit only for purposes of this motion for summary judgment and not intended to be 8 binding otherwise. Plaintiffs are put to their burden of proof on these issues. 9 19. PSOF2 ¶ 50. Admit only for purposes of this motion for summary

10 judgment and not intended to be binding otherwise. Plaintiffs are put to their burden of 11 proof on these issues. 12 13 14 15 16 17 18 ORIGINAL of the foregoing filed via the CM/ECF system this 2nd day 19 of September, 2005, with: Clerk of Court United States District Court Sandra Day O'Connor U.S. Courthouse 21 401 West Washington Street Phoenix, Arizona 85003 22 20
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RESPECTFULLY SUBMITTED this 2nd day of September, 2005. GALLAGHER & KENNEDY, P.A. By: /s Thomas A. Maraz Thomas A. Maraz Maureen A. Welsh 2575 East Camelback Road Phoenix, Arizona 85016-9225 Attorneys for Defendants

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1 COPY of the foregoing hand-delivered this 2nd day of September, 2005, to: 2 Honorable Earl H. Carroll United States District Court 3 Sandra Day O'Connor U.S. Courthouse 4 401 West Washington Street Phoenix, Arizona 85003 5 COPY of the foregoing electronically 6 transmitted via the CM/ECF system or mailed this 2nd day of September, 2005, to: 7 Russell A. Kolsrud, Esq. 8 Ryan J. Lorenz, Esq. Norling, Kolsrud, Sifferman & Davis, P.L.C. 9 16427 N. Scottsdale Road, Suite 210 Scottsdale, Arizona 85254 10 Attorneys for Plaintiffs 11 /s Mercedes Paz Hoffmon 12 13 14 15 16 17 18 19 20 21 22
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