Watchous Enterprises, L.L.C. v. Pacific National Capital et al

Filing 238

SIXTH AMENDED SCHEDULING ORDER and ORDER granting 226 plaintiff's Motion to Amend Scheduling Order. Proposed Pretrial Order due by 6/6/2019. Final Pretrial Conference set for 6/13/2019 at 01:00 PM by telephone (CONFERENCE LINE 1-888-363-4749; ACCESS CODE 3977627) before Magistrate Judge Angel D. Mitchell. Signed by Magistrate Judge Angel D. Mitchell on 5/10/19. Copies of this order have been mailed to the pro se parties by regular mail. (ks)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
WATCHOUS ENTERPRISES, L.L.C.,
Plaintiff,
v.
PACIFIC NATIONAL CAPITAL, et al.,
Defendants.

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Case No. 16-1432-JTM-ADM

SIXTH AMENDED SCHEDULING ORDER
This matter comes before the court on plaintiff Watchous Enterprises, L.L.C.’s
(“Watchous”) Motion to Amend the Scheduling Order (ECF No. 226). For the reasons discussed
below, the court grants Watchous’s motion and amends the scheduling order as follows.
I.

BACKGROUND
This action arises out of Watchous’s attempt to secure financing for oil and gas

explorations.

Watchous contends that it engaged defendant Pacific National Capital, LLC

(“Pacific”) to act as a broker to find a lender or joint venture partner. Pacific connected Watchous
with the Waterfall defendants1 as potential lenders.

Watchous gave Waterfall a $175,000

refundable deposit in connection with executing a letter of intent. But Watchous and Waterfall
never reached a final agreement, and Watchous demanded that Waterfall return the $175,000
deposit. After Waterfall allegedly did not refund the deposit, Watchous filed this lawsuit in
December of 2016.
On July 25, 2018, the court granted Watchous leave to file a second amended complaint
bringing RICO claims against Pacific and individual defendants associated with Pacific and

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Defendants Waterfall International Holdings Limited, Waterfall Mountain LLC, and
Waterfall Mountain USA LLC are referred to collectively herein as “Waterfall.”

Waterfall. (ECF No. 167.) These RICO claims are premised on allegations that the named
defendants engaged in wire fraud when they induced Watchous to send Waterfall the $175,000
deposit. Watchous alleges that these defendants also engaged in a pattern of defrauding other oil
and gas companies that were seeking financing or a joint venture partner.
In order to elicit testimony relating to these RICO claims, Watchous filed a Motion for
Leave to Take Trial Depositions After the Deadline for Completion of Discovery (ECF No. 205).
Watchous’s motion sought leave to conduct twelve nonparty “trial depositions” in Utah,
California, Colorado, Canada, Mississippi, Louisiana, and Texas after the court ruled on any
dispositive motions, but at least three weeks prior to trial. The court rejected Watchous’s argument
to the extent that Watchous relied on a distinction between “discovery depositions” and “trial
depositions,” and construed Watchous’s motion as a motion to amend the scheduling order. (ECF
No. 217, at 2-5.) The court denied the motion on the grounds that Watchous had not shown good
cause for such a lengthy extension, but stated that Watchous could renew its motion on more
limited terms following a discovery conference with the court. (Id. at 4-6.)
The court held a discovery conference on April 25, 2019. Pacific, Mark M. Hasegawa, and
Charles A. Elfsten (the “Pacific defendants”) and Watchous appeared through counsel. The
individual defendants associated with Waterfall, William J. Mournes, Gordon W. Duval, and Mark
S. Zouvas (collectively with Waterfall, the “Waterfall defendants”), appeared pro se.2 Watchous’s
counsel noted that he was having difficulty meeting and conferring with all defendants about the
proposed depositions because the Waterfall defendants still appeared to be represented by an

2

Prior to the conference, on April 18, 2019, the court granted Bryan Cave Leighton Paisner
LLP leave to withdraw from representing the Waterfall defendants. (ECF No. 220.) Waterfall
itself therefore did not appear at the conference because it was not (and still is not) represented by
counsel.
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attorney of record, Troy D. Renkemeyer, although Mr. Renkemeyer no longer appeared to be
participating in the case.3 Mr. Mournes stated that the Waterfall defendants were working to secure
new counsel and had spoken with a law firm that agreed to represent them. Mr. Duval requested
that the Waterfall defendants be allowed until May 1, 2019 to retain new counsel, and, if the
individual pro se defendants had not retained counsel at that point, Watchous’s counsel could
contact them directly.
The court gave defendants an opportunity to respond to Watchous’s plan to depose
nonparty witnesses during the conference. Neither counsel for the Pacific defendants nor the pro
se defendants stated any objection to Watchous taking a limited number of depositions following
the close of discovery. Rather, counsel for the Pacific defendants indicated that he was “fairly
certain that [he] would cover [the depositions] by telephone” and that he was ready to discuss a
schedule for the depositions. The individual pro se defendants also indicated a willingness to
discuss how to proceed regarding the depositions. The court therefore directed Watchous to file a
renewed motion to amend the scheduling order. (ECF No. 224.) Based on the information
provided by Mr. Mournes and Mr. Duval, the court set a briefing schedule that would allow the
Waterfall defendants’ new counsel—or the pro se defendants if they could not retain new
counsel—to respond to Watchous’s renewed motion.4
Watchous has now filed a renewed Motion to Amend the Scheduling Order (ECF No. 226).
Watchous seeks an order amending the scheduling order to allow it to take the depositions of seven

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Prior to the conference, the court had ordered Mr. Renkemeyer to clarify whether he
continued to represent these defendants. (ECF No. 221.) Mr. Renkemeyer did not respond, and
the court later terminated him as counsel of record. (ECF No. 235.)
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Ultimately, no attorney entered an appearance on behalf of the Waterfall defendants after the
April 25, 2019 discovery conference.
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identified nonparty witnesses in California, Colorado, Texas, Utah, and Canada on specific dates
between May 20, 2019, and June 4, 2019. Watchous also asks that the court continue the final
pretrial conference from May 23, 2019 to a date in mid-June 2019. The Pacific defendants now
oppose Watchous’s request to amend the scheduling order to take these depositions. (ECF No.
228.) In support, the Pacific defendants simply incorporate their prior arguments from their
opposition to Watchous’s earlier motion. The Pacific defendants do not oppose continuing the
pretrial conference. The Waterfall defendants, who are still unrepresented, did not file a response
to Watchous’s motion, and the court therefore considers the motion to be unopposed by the
Waterfall defendants. See D. KAN. RULE 7.4(b) (noting that, when a party does not file a response
brief within the time allowed, the court will consider the motion as uncontested).
II.

DISCUSSION
A scheduling order “may be modified only for good cause and with the judge’s consent.”

FED. R. CIV. P. 16(b)(4). To establish “good cause,” the party seeking to modify a deadline must
show that it “could not have been met with diligence.” Parker v. Cent. Kansas Med. Ctr., 178 F.
Supp. 2d 1205, 1210 (D. Kan. 2001), aff’d, 57 F. App’x 401 (10th Cir. 2003). The court is
“afforded broad discretion in managing the pretrial schedule.” Rimbert v. Eli Lilly & Co., 647
F.3d 1247, 1254 (10th Cir. 2011). “[T]otal inflexibility is undesirable,” however, because
scheduling orders can have an “outcome-determinative effect on the case.” Id. “A scheduling
order which results in the exclusion of evidence is . . . ‘a drastic sanction.’” Id. (quoting Summers
v. Mo. Pac. R.R. Sys., 132 F.3d 599, 604 (10th Cir. 1997)).
A.

Depositions

Watchous has shown good cause for amending the scheduling order to take the identified
depositions. As the court’s prior order suggested, Watchous is now seeking a more modest

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extension as to specific, limited depositions and has provided a concrete schedule for completing
those depositions. Watchous served defendants with discovery requests relating to the nonparty
witnesses on defendants in February 2019. Defendants did not serve responsive documents until
mid-April 2019, which was only approximately two weeks before the April 30, 2019 discovery
deadline. Watchous could not have realistically reviewed these documents and coordinated with
the nonparty witnesses and defendants to complete seven depositions in the two-week period
before the close of discovery. Further, disallowing these depositions would effectively exclude
evidence relating to Watchous’s RICO claims. In order to alleviate any potential burdens on
defendants (who now all appear to be unrepresented), the court will grant them leave to appear at
the depositions by telephone. See FED. R. CIV. P. 30(b)(4). Accordingly, the court finds good
cause to amend the scheduling order to permit Watchous to take the requested depositions in May
and June of 2019.5
B.

Final Pretrial Conference

Watchous’s request to continue the final pretrial conference is unopposed. In light of the
fact that four of the depositions allowed under this order will take place after the current final
pretrial conference setting, the court finds good cause to continue the final pretrial conference.
The court therefore resets the final pretrial conference for June 13, 2019 at 1:00 p.m. by telephone.
The parties’ proposed pretrial order shall be due no later than June 6, 2019.
Accordingly,
IT IS THEREFORE ORDERED that plaintiff Watchous Enterprises, L.L.C.’s Motion to
Amend the Scheduling Order (ECF No. 226) is granted. The court amends the scheduling order

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No party objected to Watchous’s request to take these depositions on the grounds that
allowing them would exceed the number of depositions allowed.
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in this case to allow Watchous to take the depositions of the seven nonparty witnesses as set forth
in its proposed schedule.
IT IS FURTHER ORDERED that the final pretrial conference is reset for June 13, 2019
at 1:00 p.m. by telephone (conference line: 1-888-363-4749; access code: 3977627) before
Magistrate Judge Angel D. Mitchell. No later than June 6, 2019, defendants shall submit the
parties’

proposed

pretrial

order

as

an

attachment

to

an

email

[e-mail].
IT IS SO ORDERED.
Dated May 10, 2019, at Topeka, Kansas.

s/ Angel D. Mitchell
Angel D. Mitchell
U.S. Magistrate Judge

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sent

to