Deman Data Systems, LLC et al v. Schessel et al

Filing 611

ORDER granting 585 Motion for Reconsideration. Signed by Judge Susan C Bucklew on 1/5/2015. (JD)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
DEMAN DATA SYSTEMS,
LLC, ET AL.,
Plaintiffs,
v.

Case No. 8:12-cv-2580-T-24 EAJ

MARC S. SCHESSEL, ET AL.,
Defendants.
____________________________
MARC S. SCHESSEL, ET AL.,
Counter-Plaintiffs,
v.
DEMAN DATA SYSTEMS,
LLC, ET AL.,
Counter-Defendants.
________________________________/
ORDER
This cause comes before the Court on Defendants’ Motion for Reconsideration. (Doc.
No. 585). Plaintiffs oppose the motion. (Doc. No. 610). As explained below, the motion is
granted.
I. Background
This case involves the breakdown of a business relationship. The Court issued orders on
several motions to dismiss and motions for summary judgment. At issue in the instant motion is
this Court’s summary judgment order. (Doc. No. 560). Specifically, Defendants ask the Court
to reconsider its rulings regarding two claims: (1) DDS’s fraud claim against Schessel, and (2)

Primrose’s tortious interference counterclaim against DDS and FSS regarding FTI.
II. Standard of Review
There are three major grounds justifying reconsideration: (1) an intervening change in
controlling law; (2) the availability of new evidence; and (3) the need to correct clear error or to
prevent manifest injustice. Sussman v. Salem, Saxon & Nielsen, P.A., 153 F.R.D. 689, 694
(M.D. Fla. 1994)(citations omitted). The Court notes that reconsideration of a previous order is
an extraordinary remedy to be employed sparingly. See id. (citations omitted). Defendants
argue that their motion is based on the need to correct clear error, as the Court overlooked and/or
misconstrued a few key facts.
III. Motion for Reconsideration
Defendants’ motion for reconsideration is based on the Court’s rulings regarding (1)
DDS’s fraud claim against Schessel, and (2) Primrose’s tortious interference counterclaim
against DDS and FSS regarding FTI. Accordingly, the Court will analyze Defendants’
arguments with respect to each of these claims.
A. Fraud
Prior to the Court’s December 19, 2013 ruling on Schessel’s motion to dismiss Plaintiffs’
fraud claim, Plaintiffs alleged the following regarding DDS’s fraud claim (Doc. No. 75): DDS
hired Schessel based on his purported reputation for honesty, integrity, and truthfulness.
However, Schessel intentionally misrepresented his character and professional background by
failing to disclose the following: (1) the termination of Schessel’s prior employment because he
was suspected of being involved in fraudulent activities, (2) a fraud investigation and Schessel’s
guilty plea, (3) his statements at his sentencing that he was the sole owner of DDS’s confidential

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information, (4) Schessel’s unpaid income tax obligations and IRS levies, and (5) a lawsuit
commenced against Schessel by his former employer. Plaintiffs alleged that as a result of such
misrepresentations, DDS hired Schessel, appointed him as president, and allowed him to acquire
1/3 ownership in DDS. Plaintiffs also alleged that throughout his affiliation with DDS and until
discovered by Dobiesz in June of 2012, Schessel continued his misrepresentations in order to
ensure his continued employment with, and ownership of, DDS.
Schessel moved to dismiss the fraud claim, arguing that he did not have a duty to disclose
the information at issue. Plaintiffs responded that prior to being hired, once Schessel disclosed
some information relating to his character and background, he had a duty to fully disclose all
such information. (Doc. No. 87). However, Plaintiffs did not address any further concealment
of such information after Schessel was hired. As a result, the Court dismissed the fraud claim,
except to the extent that it was “based Schessel’s failure to disclose that his prior employment
was terminated because he was suspected of being involved in fraudulent activities.” (Doc. No.
147, p. 6).
Thereafter, Defendants moved for summary judgment on the fraud claim, and the Court
granted summary judgment to Defendants to the extent that the fraud claim was based on
Schessel’s failure to disclose that his prior employment was terminated because he was
suspected of being involved in fraudulent activities. (Doc. No. 560, p. 34). The Court concluded
that the evidence established that Schessel was not fired by Continuum and that his termination
was not related to his involvement in fraudulent activities. (Doc. No. 560, p. 34).
The Court, however, went on to address Plaintiffs’ argument (set forth in their response
brief) that Schessel fraudulently failed to disclose his involvement with the fraudulent activity

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and the tax evasion charge and guilty plea, when Schessel was asked by Dobiesz on five
occasions after he was hired whether he (Schessel) had ever done anything that could embarrass
or reflect adversely on the integrity of DDS. (Doc. No. 560, p. 34). The Court concluded that a
genuine issue of material fact existed regarding these alleged non-disclosures and denied
Schessel’s motion for summary judgment on Plaintiffs’ fraud claim to the extent that it was
based on these non-disclosures.
In the instant motion, Defendants argue that the Court erred to the extent that it found
that any part of the fraud claim remains, given that the Court stated in its dismissal order that the
fraud claim only remained as to the details regarding Schessel’s termination, and the Court
concluded in its summary judgment order that Schessel was not fired by Continuum. The Court
agrees with Defendants that it erred in its summary judgment order by allowing the fraud claim
to remain to any extent, because the Court’s December 19, 2013 dismissal order limited the
extent that the fraud claim remained at the time of the summary judgment motions.
Accordingly, the Court vacates its summary judgment order to the extent that the Court
concluded that any part of the fraud claim remains.1
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Defendants also ask the Court to strike any portions of its summary judgment order in
which the Court found that Schessel admitted to being involved in the fraudulent activities.
Defendants argue that these findings are incorrect and highly prejudicial, because Dobiesz will
use the Court’s order to destroy Schessel’s career. To the extent that the Court stated that
Schessel engaged in a fraudulent scheme for which he received $545,000, the Court agrees that
the Court’s statement should be stricken.
However, to the extent that the Court stated that when Schessel pled guilty to the tax
evasion charge, he acknowledged his role in the fraudulent activity, the Court concludes that the
evidence supports that statement. Specifically, Schessel executed an Affidavit of Confession of
Judgment in which he stated that he caused a $100,000 rebate payment due to Continuum to be
directed to another company, and as a result, Continuum did not receive $100,000 to which it
was entitled. (Doc. No. S-511, Ex. 87). Furthermore, in connection with the $100,000
diversion, Schessel stated at his deposition that he signed a contract that he should not have
signed. (Doc. No. S-511, depo. p. 303, 338-39). As such, this evidence supports the conclusion
that Schessel acknowledged his role in the fraudulent activity of diverting money due to
Continuum. While Schessel was not charged with any role in a bigger scheme that included two
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The Court notes that Plaintiffs ask the Court to reconsider its dismissal order to the extent
that they alleged fraudulent misrepresentations/concealments after Schessel was hired. The
Court is not inclined to do so at this stage in the proceedings. The proper time to argue for
continuance of these aspects of the fraud claim was in response to Schessel’s motion to dismiss
over a year ago.2
B. Tortious Interference
Primrose asserted a tortious interference counterclaim against DDS and FSS regarding
their alleged interference with FTI, a company that Primrose was working with in order for the
two companies (Primrose and FTI) to form a new company together. (Doc. No. 89). Defendants
contend that in order to ruin the upcoming deal between Primrose and FTI, Dobiesz lied to FTI
by telling FTI that Schessel was subject to a covenant not to compete.
The Court granted Plaintiffs summary judgment on this counterclaim, because the Court
misconstrued the time-line of events. (Doc. No. 560, p. 54-56). The Court erroneously stated
that Dobiesz told FTI that Schessel was subject to a covenant not to compete prior to the Court’s
June 11, 2013 ruling that the covenant not to compete could not be enforced as written.
However, Defendants now direct the Court to parts of the record that the Court misconstrued that
show that Dobiesz’s alleged conduct occurred after the Court’s June 11, 2013 order.

other people, he did acknowledge his role in the $100,000 Continuum rebate diversion.
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Since Plaintiffs state in their response brief to Schessel’s motion for summary judgment
that there were five specific instances in which Dobiesz asked Schessel about his past and to
which Schessel deceived him, one would have expected such allegations to have been contained
in the amended complaint. Such failure is part of the reason why the Court declines to
reconsider its dismissal order, as Plaintiffs failed to properly put Schessel on notice regarding the
extent of the fraud claim.
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During his deposition, Schessel stated that between July and September of 2013, DDS
and FSS tortiously interfered with Primrose’s relationship with FTI. (Doc. No. S-513, depo. p.
245-48). Additionally, Schessel states in a declaration that Richard Croy (FSS’s vice president)
told Schessel in September of 2013 that Dobiesz called Croy into his office and told Croy that he
(Dobiesz) called FTI and told FTI that Schessel could not do a deal with FTI because Schessel
was subject to a non-compete agreement. (Doc. No. 472-4, ¶ 11). Thus, these allegations
support Schessel’s contention that the alleged tortious interference occurred after the Court ruled
that the non-compete agreement was not enforceable as written.3
In response, Plaintiffs argue that such allegations are supported by inadmissable hearsay.
The Court agrees that Schessel cannot testify regarding what Croy told him, because such
statements are hearsay. However, such evidence could be reduced to admissible form at trial if
Schessel questions Dobiesz, Croy, and/or whoever Dobiesz allegedly spoke with at FTI. As
such, the Court will allow Primrose’s tortious interference counterclaim to proceed to trial, with
the warning that Primrose cannot rely solely on Schessel’s testimony to support this
counterclaim.
IV. Conclusion
Accordingly, it is ORDERED AND ADJUDGED that Defendants’ Motion for
Reconsideration (Doc. No. 585) is GRANTED and the Court’s summary judgment order (Doc.

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Plaintiffs also argue that Schessel has not shown when Dobiesz learned that the noncompete agreement was unenforceable. However, the Court made this ruling on June 11, 2013,
and Defendants contend that Dobiesz made the false statements about the non-compete
agreement between July and September of 2013. The Court presumes that Dobiesz learned
about the status of the non-compete at the time that the Court ruled regarding its enforceability;
Plaintiffs are free to offer contradictory evidence at trial.
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No. 560) is amended as follows:
(a)

The Court grants Schessel summary judgment on DDS’s fraud claim in its
entirety.

(b)

The Court denies DDS and FSS summary judgment on Primrose’s tortious
interference counterclaim based on their alleged interference with FTI.

DONE AND ORDERED at Tampa, Florida, this 5th day of January, 2015.

Copies to:
Counsel of Record

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