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

Filing 623

ORDER granting in part and denying in part 598 Motion for Sanctions; denying as moot 621 Motion for Leave to File reply. Signed by Judge Susan C Bucklew on 1/6/2015. (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 Plaintiffs’ Motion for Sanctions for False
Statements. (Doc. No. 598). Defendants oppose the motion. (Doc. No. 617). As explained
below, the Court grants the motion to the extent that it agrees that monetary sanctions are
warranted, but denies Plaintiffs the type of sanctions being requested.
I. Background
This case involves the breakdown of a business relationship. The following eleven
claims remain among the parties: (1) violation of the Computer Fraud and Abuse Act, (2)
misappropriation of trade secrets, (3) enforcement of the Restrictive Covenants Agreement, (4)

civil theft, (5) tortious interference by Defendants, (6) civil conspiracy, (7) failure to repay
promissory notes, (8) breach of loyalty, (9) breach of the Operating Agreement, (10) unpaid
wages, and (11) tortious interference by DDS and FSS.
II. Motion for Sanctions
In the instant motion, Plaintiffs seek sanctions against Defendants for their lies, under
oath, regarding Todd Bennett’s involvement with Primrose. Specifically, Defendants made the
following false statements: (1) Defendants lied in their March 2013 interrogatory responses
(Doc. No. 600-16; Doc. No. 600-17); (2) Schessel lied during his June 2013 deposition (Doc.
No. 600-18); and (3) Schessel relied on his perjured June 2013 deposition testimony in his
opposition to Plaintiffs’ motion to strike his deposition errata sheet (Doc. No. 105, p. 4). During
a December 2014 evidentiary hearing, Schessel admitted that he lied about Todd Bennett’s
involvement, but he contends that he lied because he feared for his life. (Doc. No. 600-19).
There is no dispute that Schessel lied about Bennett’s involvement with Primrose. While
Defendants dispute the importance of Todd Bennett’s involvement with Primrose to the merits of
the claims at issue, the Court concludes that such evidence is highly relevant to several of the
claims in this case. As such, sanctions against Defendants are warranted.
Plaintiffs request that the Court sanction Defendants by: (1) striking Defendants’ answer
and counterclaims; and (2) entering default against Defendants on Plaintiffs’ claims for
misappropriation of trade secrets, civil theft, tortious interference, and civil conspiracy.
Alternatively, Plaintiffs request that the Court: (1) establish for purposes of this action
that Defendants misappropriated and stole Plaintiffs’ software, source code, and databases and
used them to provide services to Defendants’ customers, and (2) prohibit Defendants from

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opposing Plaintiffs’ misappropriation, civil theft, tortious interference, and civil conspiracy
claims and from introducing any evidence to the contrary. Upon consideration, the Court finds
that these types of sanctions are not warranted.
The Court loathes dishonesty in Court proceedings. However, Defendants’ lies have
been revealed, and Plaintiffs have not been denied evidence of Todd Bennett’s involvement with
Primrose. Furthermore, the Court prefers to have the claims decided on their merits. As such,
the Court will award monetary sanctions, and the Court will hold a hearing after the trial in this
case to determine the amount of monetary sanctions to be awarded.
III. Conclusion
Accordingly, it is ORDERED AND ADJUDGED that:
(1)

Plaintiffs’ Motion for Sanctions for False Statements (Doc. No. 598) is
GRANTED IN PART AND DENIED IN PART: The motion is GRANTED to
the extent that the Court concludes that monetary sanctions against Defendants
are warranted. The motion is DENIED to the extent of the specific sanctions
requested.

(2)

The Court will set a hearing by separate order after the trial in this case to
determine the amount of monetary sanctions to be awarded.

(3)

The Court DENIES AS MOOT Plaintiffs’ motion to file a reply (Doc. No. 621).

DONE AND ORDERED at Tampa, Florida, this 6th day of January, 2015.

Copies to:
Counsel of Record

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