Case 2:11-cv-01426-GMS Document 83 Filed 05/21/12 Page 1 of 11

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GINGRAS LAW OFFICE, PLLC 3941 E. CHANDLER BLVD., #106-243 PHOENIX, ARIZONA 85048

David S. Gingras, #021097 Gingras Law Office, PLLC 3941 E. Chandler Blvd., #106-243 Phoenix, AZ 85048 Tel.: (480) 668-3623 Fax: (480) 248-3196 [email protected] Attorney for Plaintiff Xcentric Ventures, LLC

UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA XCENTRIC VENTURES, LLC, an Arizona limited liability company, Plaintiff, v. LISA JEAN BORODKIN et al., Defendants. Pursuant to Fed. R. Civ. P. 26(f) and the Courts order dated March 1, 2012 (Doc. #53) Plaintiff XCENTRIC VENTURES, LLC (Xcentric or Plaintiff) and Defendant LISA BORODKIN (Ms. Borodkin) respectfully submit the following Case Management Report. DATED May 21, 2012. GINGRAS LAW OFFICE, PLLC /S/ David S. Gingras David S. Gingras Attorney for Xcentric Ventures, LLC IVERSON, YOAKUM, PAPIANO & HATCH /S/ Lisa J. Borodkin Lisa J. Borodkin Admitted Pro Hac Vice QUARLES & BRADY LLP John S. Craiger David E. Funkhouser III Attorneys for Lisa Jean Borodkin Case No.: 11-CV-1426-GMS CASE MANAGEMENT REPORT

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CASE MANAGEMENT REPORT

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GINGRAS LAW OFFICE, PLLC 3941 E. CHANDLER BLVD., #106-243 PHOENIX, ARIZONA 85048

CASE MANAGEMENT REPORT 1. The parties who attended the Rule 26(f) meeting and assisted in developing the Case Management Report and the date of the meeting The Rule 26(f) meeting was held telephonically on March 22, 2012 and was attended by plaintiffs counsel David S. Gingras and defendants counsel Lisa J. Borodkin, admitted pro hac vice. 2. A list of the parties in the case, including any parent corporations or entities (for recusal purposes); XCENTRIC VENTURES, LLC Creative Business Investment Concepts, Inc. ASIA ECONOMIC INSTITUTE, LLC None Lisa Borodkin (all other defendants have defaulted)

Plaintiff: Corporate Parent: Defendant: Corporate Parent Defendants: 3.

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A short statement of the nature of the case including a description of each claim and defense

Plaintiffs Position: This is a tort action primarily for malicious prosecution. As explained in prior pleadings (see Doc. #13), the Arizona Revised Jury Instructions (4th ed.) (Intentional TortsInstruction 19) use the term Malicious Prosecution to refer to claims based on the wrongful misuse of either civil or criminal proceedings, while the Restatement (Second) of Torts 674 calls the tort Wrongful Use of Civil Proceedings. This Court has also indicated that California law may apply to this action, and that under California law, a singular tort of malicious prosecution exists for both wrongfully commencing and/or continuing a civil action without probable cause. See Doc. #52 at 3, n. 2. For purposes of consistency, Xcentric will use the singular term malicious prosecution to refer to both its first and second causes of action.

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GINGRAS LAW OFFICE, PLLC 3941 E. CHANDLER BLVD., #106-243 PHOENIX, ARIZONA 85048

In short, Xcentrics malicious prosecution claim is based on a civil lawsuit that Mr. Mobrez, Ms. Llaneras, and AEI filed against Xcentric in California in early 2010. The California litigation was wholly groundless as to each and every claim from the day it was commenced until the day it ended. The action was, in fact, groundless for multiple different reasons. Xcentric contends that Mr. Mobrez and Ms. Llaneras manufactured their claims for a variety of illegitimate reasons. Xcentric further contends that despite being aware that the action was commenced and continued wrongfully, Mr. Mobrezs and Ms. Llaneras attorneys, Lisa Borodkin and Daniel Blackert, chose to continue pursing the action as aggressively as possible for a variety of illegitimate reasons. The case also includes a third cause of action for aiding and abetting tortious conduct. In plain English, the third cause of action accuses each Defendant of rendering culpable assistance to the other Defendants, such that they are each jointly and severally responsible for the same unlawful conduct of the others. Defendant Ms. Borodkins Position: As against Ms. Borodkin, this is a case for malicious prosecution under California law. The Third Cause of Action for Aiding and Abetting Tortious Conduct is redundant of the Second Cause of Action for Wrongful Continuation of Civil Proceedings, because the tort allegedly aided and abetted is malicious prosecution. The pleadings, exhibits, and matters of which the Court may take judicial notice, (including orders in the California Action), show that Plaintiff cannot state a claim against Ms. Borodkin. Plaintiffs sole theory is that certain tape recordings made by Plaintiff, without the consent of Ms. Borodkins clients and in violation of California law, rendered the claims in the California Action untenable. In the California Action, Plaintiff did not permit Ms. Borodkin to take discovery of the source or context of the tape recordings. Nonetheless, Plaintiff alleges that Ms. Borodkin should have credited Plaintiffs counsels representations regarding the recordings without permitting her to confirm the facts through discovery. As a matter of logic, the existence of the recordings, 3
CASE MANAGEMENT REPORT

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GINGRAS LAW OFFICE, PLLC 3941 E. CHANDLER BLVD., #106-243 PHOENIX, ARIZONA 85048

even if they were as Plaintiff represented, would not show that the claims in the California Action had no merit. Plaintiff has not been able to allege malice against Ms. Borodkin in litigating the California Action. Plaintiff in fact alleges that Ms. Borodkin immediately corrected any defective testimony in the California Action. Plaintiff alleges no other facts from which Ms. Borodkins malice could be inferred, despite an attempt to replead. 4. The jurisdictional basis for the case, describing the basis for the jurisdiction and citing specific jurisdictional statutes

Plaintiffs Position This court has subject matter jurisdiction based on diversity, 28 U.S.C. 1332. The Complaint seeks more than $75,000 in damages and alleges that Xcentric is a citizen of Arizona and that all Defendants are citizens of California. 5. Any parties which have not been served and an explanation of why they have not been served; and any parties which have been served but have not answered or otherwise appeared All known parties have been served. Excluding only Ms. Borodkin, all other defendants have defaulted. 6. A statement of whether any party expects to add additional parties to the case or otherwise to amend or supplement pleadings

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Plaintiffs Position: Xcentric does not currently anticipate the need to add any additional parties to the case. However, if discovery reveals that any unnamed third parties

provided actionable assistance to the currently-named Defendants

Defendant Ms. Borodkins Position: Ms. Borodkin does not currently anticipate any additional parties, because this case is suitable for dismissal on the pleadings.

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GINGRAS LAW OFFICE, PLLC 3941 E. CHANDLER BLVD., #106-243 PHOENIX, ARIZONA 85048

7.

A listing of contemplated motions and a statement of the issues to be decided by these motions (including motions under Federal Rules of Evidence 702, 703, 704, and 705) and whether a party wishes to file a case dispositive motion prior to the initiation of discovery

Plaintiffs Position: At this time, Xcentric does not anticipate filing any dispositive motions prior to the initiation of discovery. However, after some initial discovery,

Xcentric will likely a Motion for Summary Judgment on many if not all issues. Xcentric does not currently anticipate the need for expert testimony and therefore does not currently anticipate any motions under Fed. R. Evid. 702705.

Defendant Ms. Borodkins Position: Ms. Borodkin wishes to file case dispositive motions prior to the initiation of discovery. There is a pending Motion to Strike the First Amended Complaint or, in the Alternative, Motion for More Definite Statement under Rule 12(f). The issue in the Rule 12(f) motion is whether Plaintiff timely repled Ms. Borodkins malice in the amended pleading. Ms. Borodkin intends to file a Motion to Dismiss for Failure to State a Claim under Rule 12(b)(6) or, in the Alternative, Motion for Judgment on the Pleadings under Rule 12(c), by June 1, 2012 or shortly afterwards. The issue to be decided by this motion is whether Plaintiff pleads itself out of Court by the admissions in the First Amended Complaint and the exhibits, regarding Ms. Borodkins malice and other elements of its claim. Ms. Borodkin intends to file a Rule 11 Motion directed at the signing and filing of the Complaint and First Amended Complaint on May 22, 2012. The issues to be decided is whether the Complaint and First Amended Complaint in this action were filed for an improper purpose, that is, to coerce Ms. Borodkin to furnish damaging information about an unrelated third party, and whether Plaintiff and its counsel were reasonable in alleging that Ms. Borodkin plotted with her clients to create sham litigation. 5
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GINGRAS LAW OFFICE, PLLC 3941 E. CHANDLER BLVD., #106-243 PHOENIX, ARIZONA 85048

If necessary, Ms. Borodkin will file a motion for the exclusion from evidence of the tape recordings admittedly made by Plaintiff in violation of California law. The issue on such a motion would be whether the recordings should be excluded from evidence under California law, which applies in this diversity action. 8. Whether the case is suitable for reference to a United States Magistrate Judge for a settlement conference or trial

Plaintiffs Position: Plaintiff believes this case is suitable for reference to a United States Magistrate Judge for either a settlement conference or trial.

Defendant Ms. Borodkins Position: Ms. Borodkin believes this case is suitable for reference to a United States Magistrate Judge for settlement conference only.

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9.

The status of related cases pending before other courts or other judges of this Court

Plaintiffs Position: There are no related pending cases before any other judges or courts. Defendant Ms. Borodkins Position: There are no related pending cases before any other judges or courts.

10.

A statement of when the parties exchanged Federal Rule of Civil Procedure 26(a) initial disclosures

The parties have not yet exchanged initial disclosures. 11. A discussion of any issues relating to disclosure or discovery of electronically stored information, including the form or forms in which it should be produced

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GINGRAS LAW OFFICE, PLLC 3941 E. CHANDLER BLVD., #106-243 PHOENIX, ARIZONA 85048

Plaintiffs Position: At this time, Plaintiff does not anticipate any unusual issues relating to the discovery of ESI.

Defendant Ms. Borodkins Position: If this case proceeds to discovery, Ms. Borodkin expects that Plaintiff will preserve ESI.

12.

A discussion of any issues relating to claims of privilege or work product

Plaintiffs Position: Because this case involves claims against former litigants (AEI, Mr. Mobrez and Ms. Llaneras) and their attorneys (Ms. Borodkin and Mr. Blackert), it is likely that the case may involve material which would otherwise be subject to attorneyclient privilege, work product privilege, or both. Because discovery has not yet

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commenced, it is not yet clear to what extent, if any, Defendants may attempt to invoke such privilege. However, in the event that Defendants withhold any information on the basis of privilege, Xcentric intends to argue that the crime-fraud exception applies here. Specifically, both Arizona and California recognize that attorney-client privilege is not extended when there is a prima facie showing that a communication with an attorney was used to perpetuate a crime or fraud. Kline v. Kline, 221 Ariz. 564, 573, 212 P.3d 902, 911 (App. 2009) (quoting State ex rel. Thomas v. Schneider, 212 Ariz. 292, 297, 23, 130 P.3d 991, 996 (App. 2006)); Cal. Evid. Code 956 (providing an exception to the attorney-client privilege if the services of the lawyer were sought or obtained to enable or aid anyone to commit or plan to commit a crime or a fraud.). Furthermore, the lawyer does not have to be aware of the fraud for the crime-fraud exception to apply. Instead, the application of [Evid. C.] 956 turns on the clients intent. Action Perf. Co., Inc. v. Bohot, 420 F.Supp.2d 1115 (C.D.Cal. 2006) (quoting State Farm Fire & Cas. Co. v. Superior Court, 54 Cal.App.4th 625, 645, 62 Cal.Rptr.2d 834 (1997)). 7
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GINGRAS LAW OFFICE, PLLC 3941 E. CHANDLER BLVD., #106-243 PHOENIX, ARIZONA 85048

Xcentric contends that the entire California litigation from which this matter arises was a sham and that Mr. Mobrez and Ms. Llaneras utilized the services of the attorney defendants to plan and commit both crimes (i.e., perjury) and fraud. As such, Xcentric contends that Mr. Mobrez and Ms. Llaneras cannot invoke the attorney-client privilege as to any otherwise privileged material in this action.

Defendant Ms. Borodkins Position: Ms. Borodkin will follow the directions of her former clients and any order the Court makes regarding the production of matter covered by the attorney-client privilege or the attorney work product doctrine.

13.

A discussion of necessary discovery, including: a. The extent, nature, and location of discovery anticipated by the parties; b. Suggested changes, if any, to the discovery limitations imposed by the Federal Rules of Civil Procedure and Local Rule of Civil Procedure 16.2; c. The number of hours permitted for each deposition, unless extended by agreement of the parties.

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Plaintiffs Position: Xcentric contends that it already possesses sufficient evidence to establish a prima facie case as to each affirmative element of its claims here, perhaps with the exception of evidence relating to Xcentrics claim for punitive damages. However, because none of the Defendants have filed an Answer, it is not yet clear what defense, if any, they may raise. As such, it is not yet clear what additional discovery may be needed. Xcentric does not currently anticipate any changes to the standard discovery limitations imposed by the federal rules. Xcentric expects that the seven (7) hour

deposition time limit established by Fed. R. Civ. P. 30(d)(1) will be sufficient for this matter.

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GINGRAS LAW OFFICE, PLLC 3941 E. CHANDLER BLVD., #106-243 PHOENIX, ARIZONA 85048

Defendant Ms. Borodkins Position: Ms. Borodkin respectfully requests that this Court stay discovery until it rules on the pending Rule 12(f) motion, the anticipated Rule 12(b)(6) and 12(c) motion, and the anticipated Rule 11 motion. Plaintiff to date has not shown that it has alleged a claim against Ms. Borodkin that would entitle it to take discovery. Moreover, Plaintiff has indicated that it intends to use the litigation process to harass, burden and cause expense for Ms. Borodkin.

14.

Proposed specific dates for each of the following:

Event Fact Discovery Cutoff Expert Disclosure Cutoff Expert Deposition Cutoff Last Day to File Dispositive Motions Settlement Conference Cutoff 15.

Deadline December 14, 2012 September 14, 2012 October 26, 2012 December 28, 2012 September 14, 2012

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CASE MANAGEMENT REPORT

Whether a jury trial has been requested and whether the request for a jury trial is contested

Xcentric has requested a jury trial. No dispute exists as to this issue. 16. The estimated length of trial and any suggestions for shortening the trial

Plaintiffs Position: Xcentric anticipates requiring no more than 3 courts days for trial.

Defendant Ms. Borodkins Position: If this case proceeds beyond the pleadings stage, the issue of the admissibility of the recordings should be tried as soon as possible, as it is likely to shorten or moot the rest of the case entirely if this Court finds the recordings inadmissible.

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GINGRAS LAW OFFICE, PLLC 3941 E. CHANDLER BLVD., #106-243 PHOENIX, ARIZONA 85048

Plaintiffs Position: Plaintiff is amenable to settlement and believes that the Court should refer this matter to a United States Magistrate Judge to conduct a settlement conference. Defendant Ms. Borodkins Position: Ms. Borodkin is amenable to settlement and willing to attend a settlement conference. 18. Any other matters that will aid the Court and parties in resolving this case in a just, speedy, and inexpensive manner as required by Federal Rule of Civil Procedure

Plaintiffs Position: No additional comments.

Defendants Position: Discovery should be stayed until the Court has ruled on the pending motions. The Court should bifurcate the issue of the admissibility of the recordings and if the recordings are held inadmissible, order Plaintiff to replead or voluntarily dismiss the action.

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GINGRAS LAW OFFICE, PLLC 3941 E. CHANDLER BLVD., #106-243 PHOENIX, ARIZONA 85048

CERTIFICATE OF SERVICE

I hereby certify that on May 21, 2012 I electronically transmitted the attached document to the Clerks Office using the CM/ECF System for filing, and for transmittal of a Notice of Electronic Filing to the following:

John S. Craiger, Esq. David E. Funkhouser III, Esq. Quarles & Brady LLP One Renaissance Square Two North Central Avenue Phoenix, Arizona 85004-2391 Attorney for Defendant Lisa J. Borodkin

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And a courtesy copy of the foregoing delivered to: HONORABLE G. MURRAY SNOW United States District Court Sandra Day OConnor U.S. Courthouse, Suite 622 401 West Washington Street, SPC 80 Phoenix, AZ 85003-215

/s/David S. Gingras

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CASE MANAGEMENT REPORT