Free Response to Motion - District Court of Arizona - Arizona

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Gordon Bueler, SBN 011415 Bueler Jones LLP 1300 North McClintock Drive, Suite B-4 Chandler, Arizona 85226 (480) 775-6400, fax (480) 775-8868 Attorneys for Miki Smith

UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA Case No.:CIV 02-2036-PHX-MHM Consolidated with CIV 02-2048-PHX-MHM and CIV 02-2353-PHX-MHM MIKI SMITH'S RESPONSE TO MOTION IN LIMINE

Erchonia Medical Inc., et al, Plaintiff, vs. Miki Smith, et al, Defendant.

Miki Smith ("Smith") responds to the Motion In Limine filed by Erchonia Medical, Inc. The Motion seeks to exclude testimony and facts regarding statements from Charles "Chuck" Shanks to Smith that he did not have to pay monies under a promissory note. Testimony to this end should be admitted by the Court. This Court has already ruled that fact issues exist regarding the validity of the promissory note. Plaintiff's position is that the circumstances behind the creation of the note and setting of the signing of the note amounted to duress and undue influence. The facts issues surrounding the formation of the promissory note likewise apply here. In this Motion, Plaintiff contends that because Chuck Shanks was not an officer or employee of Erchonia, his statement to Smith that Smith did not have to repay the promissory note is not an admission of a party and, the statement not fitting any other hearsay exception, should be excluded. In making the claim that Chuck Shanks had no connection to Erchonia,
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Plaintiff's want the Court to ignore the plain facts. These facts show that Chuck Shanks and his church, the Grace Baptist Church, were intertwined with the business. Erchonia is linked to the organization of the church founded by Chuck Shanks, the Grace Baptist Church. As the Defendant testified previously, the church was started in Chicago, Illinois, but moved over time from Chicago to St. Petersburg, Florida, to Denver, Colorado, and to Mesa, Arizona. Affidavit of Miki Smith, attached to Response to Motion for Summary Judgment, ¶¶ 6.and 7. After the Church moved from Colorado to Arizona, Steve Shanks, now Erchonia's president, moved the company to Arizona. Smith Affidavit, ¶ 9. As Smith stated under oath, Steve Shanks told Smith that if he wanted to be a part of Majes-Tec (Erchonia), he would have to move to Arizona and, according to Charles Shanks, become a part of the church. Smith Affidavit, ¶ 10. While Smith worked for Erchonia in Arizona, the business was operated out of the same building as the church. Smith Affidavit, ¶ 11. Smith stated that Chuck Shanks was the driving force behind Majes-Tec/Erchonia and made all major decisions for the business and the church. Smith Affidavit, ¶ 22. Plaintiff also ignores the setting in which the promissory note was signed. When Steve Shanks asked Smith to come to a meeting, the meeting was scheduled in Chuck Shanks' home. Smith Affidavit, ¶ 23. At the meeting, Chuck Shanks was present along with the rest of the Shanks family, save Steve Matt Shanks. Smith Affidavit, ¶ 24. Chuck Shanks told Smith to sign the note. Smith Affidavit, ¶ 25. Finally, after signing the note, Chuck Shanks told Smith that the matter was over and that Smith need not pay the amounts set forth in the note. Smith Affidavit, ¶ 32. Given this factual background, Chuck Shanks' statement to Smith that he did not have to repay the note is a party admission within the codified exception to the hearsay rule. This Court has already determined that facts issues remain to be determined by the trier of fact. One of these issues, raised by Smith in response to Erchonia's motion for summary judgment, is the
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actual or apparent authority of Chuck Shanks to speak for Erchonia. Given that this fact issue remains, testimony showing Chucks Shanks' forgiveness of the note is admissible as a party admission. As Plaintiff rightly notes, the Arizona "dead man's statute" has not been applied to these facts or to general civil actions. The statute, A.R.S. §12-2251, by its very terms, applies only to probate or guardian actions. The first sentence of the statute provides, in part: "In an action by or against personal representatives, administrators, guardians or conservators in which judgment may be given against them as such..." The prohibition on statements from a decedent's

testimony is thus expressly limited to probate actions. Plaintiff uses faulty logic in claiming that Arizona "public policy" expands the statute beyond its express terms. Suppose that the president of IBM had made a party admission for the company and then died. By Plaintiff's logic, such an admission would not be allowed into evidence under the dead man's statute. Plaintiff misconstrues the statute. The statement by Chuck Shanks is not inadmissible under A.R.S. §12-2251. Conclusion For the above reasons the motion in limine filed by Plaintiff should be denied. Dated this 18th day of July 2007. Bueler Jones LLP /s/ Gordon S. Bueler________________ Gordon S. Bueler Attorney for Miki Smith Certificate of Service I certify that on July 18, 2007, I electronically transmitted the attached document to the Clerk's Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to those attorneys registered with CM/ECF: Ira M. Schwartz Michael A. Cordier DeCONCINI McDONALD YETWEN & LACY PC 7310 N. 16th Street, Suite 330 Phoenix, AZ 85020 Attorney for Erchonia Medical
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