Cygnus Systems, Inc. v. Microsoft Corporation, et al

Filing 202

Cygnus Systems, Inc. v. Microsoft Corporation, et al

Doc. 20

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA _________________ BILTMORE ASSOCIATES, as Trustee for the Visitalk, Creditors' Trust, ) ) ) ) Plaintiff, ) ) vs. ) ) PETER THIMMESCH, et al., ) ) Defendants. ) _____________________________ )

No.

CV 02-2405-PHX-HRH Phoenix, Arizona March 13, 2008 1:19 p.m.

BEFORE:

THE HONORABLE H. RUSSEL HOLLAND, JUDGE

REPORTER'S EXCERPTED TRANSCRIPT OF PROCEEDINGS SETTLEMENT AGREEMENT

Official Court Reporter: Candy L. Potter, RMR, CRR Sandra Day O'Connor U.S. Courthouse, Suite 312 401 West Washington Street, Spc 36 Phoenix, Arizona 85003-2151 [phone] Proceedings Reported by Stenographic Court Reporter Transcript Prepared by Computer-Aided Transcription

Dockets.Justia.com

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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 UNITED STATES DISTRICT COURT For the Defendants: Mariscal Weeks McIntyre & Friedlander By: Gary L. Birnbaum, Esq. Timothy J. Thomason, Esq. Scot L. Claus, Esq. 2901 North Central Avenue, Suite 200 Phoenix, Arizona 85012 For the Plaintiff: Tiffany & Bosco By: Christopher Reed Kaup, Esq. 2525 East Camelback Road, 3rd Floor Phoenix, Arizona 85016 APPEARANCES

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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 count.

(Previous proceedings held on the record not included in this transcript)

THE COURT: MR. KAUP:

Mr. Kaup. Your Honor, in light of your ruling,
13:19:09

counsel for Snell & Wilmer and I have had conversations right before we resumed with our principals, and we have a resolution of this matter between us and Snell & Wilmer which will avoid the need to continue to proceed in the trial as between us and Snell & Wilmer, assuming Your Honor approves of the resolution. I'd like to put it on the record. THE COURT: MR. KAUP: Let's do it. Your Honor, first there would be a judgment
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in favor of the -- in favor of Snell & Wilmer on all counts for dismissal with prejudice of all counts, which obviously are the malpractice count, the aiding and abetting, and the preference count. MR. BIRNBAUM: Excuse me, Mr. Kaup, there is one other
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It is all counts, which is malpractice, aiding and
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abetting, misrepresentation, and preference. MR. KAUP: THE COURT: MR. KAUP: I apologize. Understood. Second, Your Honor, there would be an

award -- an agreement that the plaintiff would pay a fee -- an amount of $100. With all of the costs and fees to be borne by UNITED STATES DISTRICT COURT
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each party. THE COURT: understand it. Let me play that back to make sure I

I'm sort of turning it around.

But this aspect of the agreement is that everyone would bear their own costs and attorney's fees, except that the plaintiff is going to pay $100 -MR. KAUP: THE COURT: To Snell & Wilmer. -- to Snell & Wilmer. Your Honor, let me clarify, please.
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MR. BIRNBAUM:

The concept is that there will be a judgment entered concluding this case. THE COURT: Yes. The judgment will provide for dismissal

MR. BIRNBAUM:

of all claims, for payment by the plaintiff of $100 to Snell & Wilmer, and otherwise that all parties will bear their own costs and attorney's fees. THE COURT: MR. KAUP: THE COURT: MR. KAUP: Agreed, Mr. Kaup? Yes. Okay. Yes. Anything else?
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There will be full and complete

mutual releases between all parties and principals of the parties and their counsel. THE COURT: Now, when you say "all parties," we've got

Mr. Thimmesch hanging out here. MR. KAUP: I apologize, Your Honor. "All parties"
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UNITED STATES DISTRICT COURT

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meaning between Biltmore Associates as the trustee of the Visitalk Creditors' Trust and Snell & Wilmer. THE COURT: Got it. We agree with that, Your Honor.
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MR. BIRNBAUM:

The only exception to the release is the $100 payable under the judgment. THE COURT: MR. KAUP: Okay. Anything else? In addition,

Your Honor -- yes.

Your Honor, the plaintiff will agree to forego any and all rights of appeal from that judgment. This agreement constitutes an unconditional withdrawal of all allegations and claims against Snell & Wilmer and its individual attorneys. And finally, Your Honor, on behalf of Biltmore Associates as the trustee of the creditor's trust, as the plaintiff, we apologize to Snell & Wilmer and their individual attorneys for any difficulties associated with the litigation. The complaint was brought by Biltmore -- by Visitalk and Biltmore Associates in good faith. However, as the evidence in
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the trial developed, it has led us to the conclusion that the case should not proceed any further as against defendant Snell & Wilmer. And that, I believe, is it. MR. BIRNBAUM: We agree, Your Honor, that's the

correct statement of the agreement that we've reached. UNITED STATES DISTRICT COURT

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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 it. judgment?

THE COURT:

All right.

Then I approve it.

MR. BIRNBAUM: THE COURT:

Thank you, Your Honor.

That's a proper settlement of this case. This is the way it should come out.
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I underscore "proper."

Do you understand, Mr. Kaup, and your client, that this is the settlement, and I will enforce it? If there would

be any question about it later, I will enforce this settlement. MR. KAUP: There is no question in our mind, And we agree with each of
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Your Honor, and we understand it. those terms. THE COURT: Okay.

Who's going to prepare the

MR. BIRNBAUM: THE COURT:

We will, Your Honor. Prepare it, serve it, and file
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All right.

We have a -- what is it called, a mail box for

judgments -- the CM/ECF system has a wicket for you to lodge proposed orders and judgments in. MR. BIRNBAUM: THE COURT: It will be --

That's where you need to send it. We'll do that, Your Honor. It will be
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MR. BIRNBAUM:

in the form of a stipulated judgment, so we'll run it by Mr. Kaup first. It will have both attorney s' signatures on it

before we send it to you. THE COURT: MR. KAUP: All right. Anything else we need to do?
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Your Honor, the only issue is the prove up

UNITED STATES DISTRICT COURT

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of damages against Mr. Thimmesch.

And we can do that in a

form -- we can submit -- obviously he hasn't been here other than a few minutes at the beginning of the day on the first day. THE COURT: MR. KAUP: That's what I thought. And we can do that, Your Honor. It doesn't
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involve them, but we could do that either by bringing our damages expert back or submitting a declaration from her specific as to that issue so you have the evidentiary predicate to do that. THE COURT: point? MR. BIRNBAUM: We know he's in China next week, Do we know where Mr. Thimmesch is at this
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because we tried to get him. MR. CLAUS: He is in Washington, D.C. at the present And then we served him with a
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time, according to what I know.

subpoena when he was here, in trial, I had a subpoena ready for him. THE COURT: MR. CLAUS: And he left? Well, I candidly, Your Honor, I told him
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that he could leave because we didn't know when we were going to be scheduling for. And I even had a cover letter prepared

that said, call Lori Mandell, Mr. Birnbaum's secretary, and tell us your schedule. He's been keeping in contact with
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Miss Mandell and informed her -- we had anticipated calling him UNITED STATES DISTRICT COURT

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next week.

And he said he's going to be in Beijing. We actually understand, Your Honor,

MR. BIRNBAUM:

it's sort of interesting, that he's putting together some sort of computer system for outer Mongolia. the next few weeks. THE COURT: MR. KAUP: for the approval. THE COURT: No, thank you.
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And that's where he is
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I wish him luck.

That's interesting.

Well, we could adjourn to outer Mongolia

I think in light of what I've been told, the better way to approach this is in due course, prepare the written prove-up material, serve it on Mr. Thimmesch somehow. we have a mail address for him. address for him. MR. KAUP: THE COURT: Camel in outer Mongolia? No, I think we got a better one than that. I think

I think you have a mail

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And I'm going to insist that he have an opportunity to respond -MR. KAUP: THE COURT: Sure. -- to the affidavit.
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Anything else? MR. KAUP: No, Your Honor. Your Honor, we'd just like to express I know it's difficult traveling up Visiting judge's staff
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MR. BIRNBAUM:

our thanks, first to you. and down.

But also to the staff.

UNITED STATES DISTRICT COURT

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sometimes have an unusual burden, and yours has been particularly helpful to us. THE COURT: We appreciate it.

My secretary is not happy with me that she

didn't get to come along on this trip. MR. KAUP: THE COURT: Thank you, Your Honor. Very, very good.
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Again, I want to tell you that I compliment counsel on their good sense in reaching this resolution. good job of wrapping things up. Thank you. MR. BIRNBAUM: MR. KAUP: THE COURT: Thank you, Your Honor.
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You've done a

Thank you. We'll be in recess.

(Proceedings concluded at 1:28 p.m.)

-oOo-

UNITED STATES DISTRICT COURT

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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 UNITED STATES DISTRICT COURT s/Candy L. Potter________ Candy L. Potter, RMR, CRR 2008. I, CANDY L. POTTER, do hereby certify that I am duly appointed and qualified to act as Official Court Reporter for the United States District Court for the District of Arizona. I FURTHER CERTIFY that the foregoing pages constitute a full, true, and accurate transcript of all the proceedings contained herein, had in the above-entitled cause on the date specified therein, and that said transcript was prepared under my direction and control. DATED at Phoenix, Arizona, this 13th day of March, CERTIFICATE