Dornoch Holdings International, LLC et al v. Conagra Foods Lamb Weston, Inc. et al

Filing 336

ORDER overruling 243 Defendant's Objections to the Special Master's Privilege Log; accepting and adopting 311 334 the Special Master's Report and Recommendation; granting 330 Motion to Strike; denying 333 Motion for Leave to File a Sur-Reply; denying as moot 154 Motion to Clarify; denying 207 Motion for Relief from Unreasonable Costs; denying as moot 209 Defendant's Motion for Reconsideration of Summary Judgment Order; denying as moot 216 Motion to Exclud e; denying as moot 217 Motion in Limine; denying as moot 218 Motion in Limine; denying as moot 220 Motion to Take Judicial Notice; granting 241 Motion; denying as moot 292 Motion for Reconsideration; denying 293 Motion to Amend/Cor rect; and denying as moot 294 Motion for Discovery; denying 249 Plaintiffs' Motion for Sanctions; and granting 289 Defendant's Motion for Terminating Sanctions. Signed by Judge Terry J Hatter, Jr. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (Hatter, Terry)

United States District Court
District of Idaho
DORNOCH HOLDINGS INTERNATIONAL, LLC, et al.,

1:10-CV-00135-TJH

Plaintiffs,

Order

v.
CONAGRA FOODS LAMB
WESTON, INC., et al.,
Defendants.

The Court has considered the following:
1.

Plaintiffs’ motion for relief from unreasonable costs [207];

2.

Defendant ConAgra Foods Lamb Weston, Inc.’s (“Defendant”) motion
to determine privilege [241];

3.

Defendant’s objections to the Special Master’s Privilege Log [243];

4.

Plaintiffs’ motion for sanctions [249];

5.

Defendant’s motion for sanctions [289];

Order – Page 1 of 5

6.

Defendant’s motion for reconsideration of the Court’s order regarding
the summary judgment motions [292];

7.

Defendant’s motion to amend or correct its answer [293];

8.

Defendant’s motion for leave to take additional discovery [294];

9.

The Special Master’s Report and Recommendation [311] and her
supplemental report [334];

10.

Defendant’s objections to the Report and Recommendation [323];

11.

Plaintiffs’ response to the Report and Recommendation [326];

12.

Plaintiffs’ motion to strike the affidavit of Nicole Hancock in reply to
Defendant’s motion for sanctions [330]; and

13.

Defendant’s motion for leave to file a sur-reply in further opposition to
Plaintiffs’ motion for sanctions [333];

together with the moving and opposing papers, the various objections and responses
filed by the parties, and the Special Master’s various other reports.
It is Ordered that Defendant’s motion to determine privilege [241] be, and
hereby is, Granted. The Court finds that the email message and the attachment
sent by Jim Hungelmann to Veronica Meersohn on July 28, 2010, is not privileged.
It is further Ordered that Defendant’s motion to amend or correct its
answer [293] be, and hereby is, Denied.
It is further Ordered that Plaintiffs’ motion for relief from unreasonable
costs [207] be, and hereby is, Denied.
It is further Ordered that Defendant’s objections to the Special Master’s
Privilege Log be, and hereby are, Overruled.

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It is further Ordered that the Court accepts and adopts the Special
Master’s Report and Recommendation in its entirety.
It is Ordered that Plaintiffs’ motion to strike the affidavit of Nicole
Hancock in support of the reply to Defendant’s motion for sanctions [330] be, and
hereby is, Granted.
It is further Ordered that Defendant’s motion for leave to file a sur-reply
in further opposition to Plaintiffs’ motion for sanctions [333] be, and hereby is,
Denied.
It is further Ordered that Plaintiffs’ motion for sanctions [249] be, and
hereby is, Denied. Plaintiffs have not established that Defendant’s counsel copied
or viewed Plaintiffs’ privileged electronically stored information, otherwise
interfered with Plaintiffs’ attorney-client privilege or work product privilege,
committed spoilation of evidence, intentionally delayed the trial, or defrauded the
Court.
It is further Ordered that Defendant’s motion for sanctions [289] be, and
hereby is, Granted.
It is clear to the Court that collectively, Plaintiffs, their counsel, and/or Jim
Hungelmann were less than candid with the Court and, indeed, deceitful. Because
Hungelmann is an attorney admitted to the Idaho Bar, though on inactive status, he
should be well versed on his obligation as a party’s representative to be honest and
forthright with the Court. Plaintiffs’ counsel, likewise, are fully aware of their
obligations to be candid with the Court.

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Based on the evidence before the Court, the Court finds that Plaintiffs, their
counsel, and/or Hungelmann intended to defraud the Court by concealing the fact
that Hungelmann received the initialed Transition Agreement in May of 2009, and
then misrepresented to the Court that he had not, in fact, received it. While the
receipt of the Transition Agreement established its delivery, there was still an
unresolved question as to whether the Transition Agreement was legally executed
and otherwise enforceable. However, Plaintiffs concealed from the Court the fact
that Defendant actually delivered what might be construed to be a legally executed
copy of the Transition Agreement.

This misrepresentation was supported by

Plaintiffs’ counsel’s arguments in, inter alia, Plaintiffs’ summary judgment motion
and in Plaintiffs’ opposition to Defendant’s motion for reconsideration of the Court’s
order regarding summary judgment. This misrepresented fact was the cornerstone
upon which the Court built its decision denying Defendant’s summary judgment.
Once the cornerstone was pulled out, the rest of the order crumbled.
Plaintiffs’ continuing misrepresentations multiplied the proceedings and
Defendant’s costs exponentially. Had Plaintiffs been candid and truthful, the Court
would have granted Defendant’s motion for summary judgement, and that would
have resolved most, if not all, of this case. Instead, the Court, the Special Master
and Defendants spent months and hundreds of thousands of dollars sifting through
recently discovered evidence which should have been turned over by Plaintiffs in
response to valid discovery requests. Plaintiffs’ misrepresentations to this Court and
to Magistrate Judge Bush, in response to Defendant’s motion to compel, that there
existed approximately 88 relevant emails sought by Defendants were false and
misleading. After the discovery of over a million documents stored electronically
at UNISUR’s facilty in Chile and in the possession of UNISUR’s bankruptcy trustee,
the Court now knows that there were significantly more relevant emails than what
was turned over by Plaintiffs in discovery and what was represented by Plaintiffs to
Order – Page 4 of 5

the Court.
The Court “has the inherent power to dismiss an action if a party has willfully
deceived the [C]ourt and engaged in conduct utterly inconsistent with the orderly
administration of justice.” United States v. Natational Med. Enters., Inc., 792 F.2d
906, 912 (9th Cir. 1986) (citing Fjelstad v. Am. Honda Motor Co., 762 F.2d 1334
(9th Cir. 1985)). The Court finds that Plaintiffs willfully deceived the Court and
engaged in conduct utterly inconsistent with the orderly administration of justice.
Accordingly,
It is further Ordered that, pursuant to the Court’s inherent power, this
action be, and hereby is, Dismissed with prejudice.
It is further Ordered that all remaining motions be, and hereby are,
Denied as moot.
Date: May 24, 2013
___________________________________
Terry J. Hatter, Jr.
Senior United States District Judge

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