Petersen v. Bitters et al
Filing
220
ORDER denying 215 Motion for adverse inference, sanctions, and to continue trial 215 . Ordered by Magistrate Judge Cheryl R. Zwart. (Zwart, Cheryl)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
ESTATE OF JOYCE ROSAMOND
PETERSEN, deceased;
8:16CV183
Plaintiff,
MEMORANDUM AND ORDER
vs.
WILLIAM E. BITTERS, ROBERT W.
BOLAND JR., JOHN L. HENRY, and
UNITED FINANCIAL SERVICES,
Defendants.
Plaintiff has moved for an order 1) granting sanctions and adverse
inferences against Defendants William Bitters and Robert W. Boland and their
counsel for non-compliance with the court’s discovery order; 2) striking their
affirmative defenses and allegations; 3) granting a Rule 56(d) continuance for
responding to their motions for summary judgment; and 4) extending the case
progression schedule and trial date by 90 days. (Filing No. 215).
Plaintiff’s motion was filed on June 5, 2018. The pretrial conference was
scheduled to be held on June 12, 2018, with trial set for June 25, 2018. Absent a
deviation from the local rules, (see NEGen R. 1.1(c)), Plaintiff’s motion would not
be fully submitted prior to the pretrial conference. The court therefore continued
the pretrial conference and trial by two weeks, and it entered an expedited briefing
schedule on Plaintiff’s motion. (Filing No. 217). The Filing 215 motion is now fully
submitted.
As the following explains, Plaintiff’s motion requesting adverse inferences
and sanctions, (Filing No. 215), will be denied. That portion of Filing 215 which
requests a Rule 56(d) continuance will be addressed by Judge Rossiter.
FACTUAL BACKGROUND
Plaintiff’s lawsuit was initially filed in the United States District Court for the
Eastern District of Texas on December 1, 2014, and it was transferred to this
district on April 25, 2016. (Filing No. 58). The extensive procedural history of this
lawsuit was outlined in my prior order, Filing No. 181, which is incorporated herein
by reference. That history will be repeated only as necessary to explain the court’s
ruling on Plaintiff’s pending motion.
Based on the parties’ proposals as stated in the Rule 26(f) Report, this court
entered a final progression order on February 10, 2017, (Filing No. 127), which set
a November 1, 2017 written discovery deadline, and a November 30, 2017
deposition deadline. Then Plaintiff waited seven months to begin discovery—
serving no written discovery requests until September 19, 2017. At that time,
Plaintiff served 34 Requests for Admission, 102 Requests for Production, and 33
Interrogatories on Defendants Bitters and Boland. During a conference call held
on October 24, 2017, the case progression deadlines were extended at the parties’
request. The written discovery deadline was extended to December 1, 2017, with
a deposition deadline of February 9, 2018, with a June 25, 2018 trial setting. (Filing
No. 128).
Discovery disputes arose between Plaintiff and all Defendants. As to
Defendants Bitters and Boland, the court entered an extensive order on February
5, 2018, which set a March 2, 2018 for serving responses or supplemental
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responses as ordered. (Filing No. 160). Defendants Bitters an Boland served
discovery responses on March 2, 2018, and supplemental responses on March 6,
2018, (Filing No. 216, at CM/ECF p. 6), and they timely moved for summary
judgment on March 20, 2018. (Filing Nos. 182 & 184). They were deposed on April
16, 2018, the deadline for conducting depositions.
The June 25, 2018 trial and June 12, 2018 pretrial conference settings were
chosen after conferring with counsel for Plaintiff and Defendants Bitters an Boland.
Despite these looming deadlines and the pending summary judgment motions,
Plaintiff’s counsel waited until June 5, 2018 to file the current motion, (Filing No.
215), and a 103-page supporting brief, therein requesting that the summary
judgment rulings and trial be continued pending a ruling on the issue of adverse
inferences and sanctions.
The central focus of Plaintiff’s arguments is Bitters’ (and, to a far lesser
extent, Boland’s) alleged failure to describe how they searched for responsive
documents or answers before responding to the discovery, and Plaintiff’s belief
that requested documents remain undisclosed and Defendant’ answers and
responses are therefore untruthful or, at the very least, incomplete.
The court’s February 5, 2018 order required Defendants Bitters and Boland
to perform a more in-depth search for information responsive to Plaintiff’s
discovery requests and provide an affidavit describing those efforts. In the affidavit,
they were to explain how they conducted the additional search, including the
persons contacted, and whether they searched electronically stored information
(ESI), including what was searched; who conducted the search; how it was
conducted; and what was found.
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Bolands’ affidavit states, in essence, that he knows nothing about the
transaction underlying this case, so there were no paper or ESI records to search.
In addition to providing information relevant to only specific discovery requests,
Bitters’ affidavit states that as to paper records:
I recently spent approximately 3 days personally reviewing my paper
records, and I located no written communications to or from Joyce
Petersen, Bill Skoggins, or John Henry, and I also located no written
records or documents pertaining to Joyce Petersen, Bill Skoggins,
John Henry, or the promissory note from John Henry to Joyce
Petersen among those paper documents in my possession.
(Filing No. 216-2, at CM/ECF p. 12, ¶ 4).
As to ESI, Bitters’ affidavit states:
22. I have email accounts through AOL, Hotmail, Yahoo, Gmail. I
have not used the Yahoo account for approximately 12 years. I have
approximately 7,500 to 8,000 total email messages combined through
these accounts, most of which have nothing to do with this case and
which may contain sensitive financial information for other clients. I
consulted all of my email accounts using specific search terms in an
attempt to identify communications relevant to this case and
responsive to Plaintiff's discovery requests.
23. I first performed a search across all of my email accounts using
the search terms "John Henry", "John L. Henry", "JSJ", and "Allianz".
None of the searches identified any email communications to or from
John Henry. However, I did identify communications from Allianz
which contained as attachments documents pertaining to John Henry,
and these documents have been produced herein. I have no written
or electronic communications, and have never had any written or
electronic communications, to or from John Henry regarding the
promissory note.
24. I also performed a search of my email accounts using "Joyce
Petersen", "Joyce Scoggins", "Petersen-Scoggins", "Petersen
Scoggins", and "Joyce Peterson" as search terms. This search
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uncovered two email messages from Sharon Miller, Joyce Petersen's
accountant, both dated April 15, 2013. I also located emails
communications with Jilynn Wall dated November 21, 2013 and
November 29, 2017. I am producing hard copies of these
communications herein.
25. During my search of all of my email accounts, I also searched
for any email communications with Robert Boland, and this search
identified between 500 to 1000 email messages to and from Robert
Boland dating back more than 15 years. However, none of the
messages pertained to Joyce Petersen, John Henry, the promissory
note, or this lawsuit.
26. I also identified email messages to attorney Aaron Rodenburg,
and copies of those email messages are being produced herein.
27. The only other email communications I identified pertaining to
John Henry, Joyce Petersen, Clarence Nelson, or the promissory note
were between me and my attorneys, Joel Feistner, and Matthew
Zarghouni.
(Filing No. 216-2, at CM/ECF pp. 15-16, ¶¶ 22-27).
Plaintiff argues that as to some discovery requests, Bitters’ response that no
documents were found indicates he did not really look—that had he done what the
court ordered him to do, he would have found responsive information. As to some
of these requests, Plaintiff argues Bitters failed to reach out to third parties who
may have possessed documents. Productions Request 5 (to Bitters) (contacts at
Allianz for commission information); Production Request 27 (to Bitters) (his own
accountant for business records); Production Request 41 (to Bitters) (same);
Production Request 31 (to Bitters and Boland) (subpoena or legal representative
request to Verizon for telephone records); Production Request 51 (to Bitters) (no
contact with SunLife). (See Filing No. 216 at CM/ECF pp. 10–11, 15–23, 29–30,
46–48, 86, 89, 90, 91, & 95). As to others, he claims Bitters’ computer search was
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incomplete because while Bitters’ computer was stolen from a hotel room,1 Bitters
did not state whether he searched other storage locations, such as external drives
and cloud storage. Interrogatory 12 (to Bitters); Production Request 2 (to Bitters);
Production Request 14 (to Bitters); Production Request 21 (to Bitters); Production
Request 30 (to Bitters); Production Request 49 (to Bitters). (See Filing No. 216 at
CM/ECF pp. 10–11, 23–25, 31–32, 41, 42, 43, 45–46, 90, 91, & 116). Plaintiff
claims Bitters’ responses regarding email searches are not credible because had
he really searched the emails carefully, he would know how many he exchanged
with Boland, rather than merely stating between 500 and 1000. Request for
Admission 28 (to Bitters); Production Request 3; 25 (to Bitters) (See Filing No. 216
at CM/ECF pp. 10–11, 23, 43–45, 88, & 90). Plaintiff’s counsel claims Bitters was
subject to a litigation hold as early as June of 2015, so the documents should have
been in his lawyers’ possession—and therefore they are withholding evidence, as
well. Production Request 30 (to Bitters). (See Filing No. 216 at CM/ECF pp. 10–
11, 43, & 90).
Plaintiff argues that Bitters’ and Boland’s responses lack sufficient detail and
are therefore incomplete. Interrogatory 3 (to Boland) and Interrogatory 7 (to Bitters)
(e.g., how Bitters’ and Boland’s professional relationship started, what it involves,
what each got out of it, and how long it lasted, etc.); Interrogatory 4 (to Bitters)
(e.g., when, how, or why investment products were sold to Plaintiff, how Bitters
knew Scroggins, how often he served or advised him, how much he made from
him in commissions, what advice he gave him, etc.); Interrogatory 10 (e.g., the
Plaintiff’s counsel claims the statement that the computer was stolen as
not credible, but other than possible inconsistencies in dates of when that
happened, he has provided no evidence to support this credibility attack. That is,
Plaintiff’s counsel does not support his assertion that Bitters is lying, despite
receiving the police report number and the names of the investigating detectives
from Bitters over three months ago. (Filing No. 216-2, at CM/ECF p. 16).
1
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number of conversations with Henry, whether they took place by phone, and the
location of those conversations, etc.), Interrogatory 11 (same); and 18 (e.g., how
Bitters met Nelson, how he convinced Nelson to loan the money, how he picked
up the check from Nelson, etc.); Production Request 1 (to Bitters) (names of
persons contacted to obtain investment documents). (See Filing No. 216 at
CM/ECF pp. 10–11, 27–28, 30–33, 33–36, 39–40, 63, 63–66, 86, & 89).
Defendants Bitters and Boland provided responses to Plaintiff, and considered with
the affidavits, those responses were sufficiently specific—particularly when
supplemented by a later deposition of these defendants.2
As to some discovery requests, Plaintiff claims Bitters and Boland provided
only a partial response. Production Request 29 (Bitters failed to give his business
addresses going back to 2008); Production Request 36 and Interrogatory 6 (Bitters
states Strong’s current address is unknown, but does not provide the last known
address). (See Filing No. 216 at CM/ECF pp. 55–57, 57–58, & 93–94). For some
of the incomplete responses, the information is available of public record.
Production Request 37 (to Bitters) (confirmation that Bitters was a licensed and
registered broker for the years of 2007 to 2014 and the first four months of 2015);
Production Request 38 (Bitters’ license to sell annuities); Production Request 37
(to Boland) (lacking information on whether Boland’s license to practice law was
inactive at any point in time and no disclosure regarding licenses or registrations
in Colorado and Missouri). (See Filing No. 216 at CM/ECF pp. 58–59, 60–63, &
Plaintiff’s counsel repeatedly complains that Bitters’ and Boland’s
discovery responses also reference their affidavits as a whole, with no reference
to which specific paragraphs apply to which specific discovery requests. Bitters’
affidavit (Filing No. 216-2, at CM/ECF pp. 11-17) is only seven pages long;
Boland’s affidavit (Filing No. 216-2, at CM/ECF pp. 82-85), is only four pages. The
court had no difficulty determining what portions of the affidavits were responsive
to which discovery requests.
2
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94). Plaintiff’s counsel makes no showing that he tried but failed to obtain the
information from public sources.
Some of the discovery at issue seeks information available regarding
Plaintiff’s accounts, and is therefore available to Plaintiff. Production Request 1
(to Bitters) (statements for investments or annuities held by Plaintiff and managed
by Bitters); Production Request 51 (correspondence to SunLife by Bitters
regarding Plaintiff’s investments). (Filing No. 216 at CM/ECF pp. 29–30, 33–36,
86, 89, & 95). Plaintiff’s counsel makes no showing that he tried but failed to obtain
the information as a representative of his own client.
Some of Plaintiff’s discovery requests are subject to interpretation, with
Bitters and Boland responding in accordance with their interpretation, and
Plaintiff’s counsel arguing the response does not fully address his interpretation of
the request. Interrogatory No. 4 (to Boland) (identity of persons familiar with the
allegations within the complaint); Production Request 44 (to Bitters) (funds
received from Plaintiff arising from sales of investments); Production Request 46
(to both Bitters and Boland) (documentation of partnership relationship). (Filing No.
216 at CM/ECF pp. 25–26, 28–29, 66–68, 94, & 95).
Plaintiff claims Bitters improperly redacted pages of documents because
certain Bates-stamped pages were blank. Production Request 25; 47 (to Bitters)
(Filing No. 216 at CM/ECF pp. 13, & 68–69). This allegation is fully addressed by
Zarghouni’s affidavit explaining the copying process, as well as the court’s review
of an example.
Plaintiff’s counsel challenges the credibility of Bitters’ responses to Request
for Admission 63 and 78, primarily because Henry’s affidavit contradicts Bitters’
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statements, and Plaintiff’s counsel believes Bitters’ has not adequately addressed
that discrepancy. (Filing No. 216 at CM/ECF pp. 48-50).
Finally, Plaintiff argues Bitters and Boland did not adequately respond to
Plaintiff’s interrogatories and requests for documents supporting the defendants’
denial of Plaintiff’s allegations. Interrogatory 8 (exhibit list) & 14 (to Bitters);
Production Request 15 (to Bitters and Boland); Production Request 16-19 (to
Bitters). (Filing No. 216 at CM/ECF pp. 50–51, & 51–55). Plaintiff states Bitters and
Boland did not adequately identify which documents they intended to use at trial
and who they intend to call as witnesses. Aside from the work product concerns
raised by demanding that the opposing party’s sort and identify the documents it
believes are relevant, the pretrial conference for this case is scheduled for next
week. At that time, the parties will need to identify exhibits and witnesses for trial.
ANALYSIS
Plaintiff argues the court should impose an adverse inference, particularly
as it relates to information that could have been located on Bitters’ laptop, (Filing
No. 216, at CM/ECF pp. 73-83, 87-95). Plaintiff further requests the court prohibit
Bitters and Boland from putting on evidence in support of affirmative defenses,
(Filing No. 216, at CM/ECF pp. 83-87), sanction Bitters, Boland, and their counsel
by requiring them to pay the attorney fees incurred in preparing and filing this
motion, (Filing No. 216, at CM/ECF pp. 95-98), and find Bitters and Boland in
contempt, (Filing No. 216, at CM/ECF p. 98-99). These arguments will be
discussed in turn.
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A.
Adverse Inference.
To impose an adverse inference instruction, a district court must find: 1)
intentional destruction indicating a desire to suppress the truth, and 2) prejudice to
the opposing party. Hallmark Cards, Inc. v. Murley, 703 F.3d 456, 460 (8th Cir.
2013) (internal quotation omitted). “Intent is rarely proved by direct evidence, and
a district court has substantial leeway to determine intent through consideration of
circumstantial evidence, witness credibility, motives of the witnesses in a particular
case, and other factors.” Greyhound Lines, Inc. v. Wade, 485 F.3d 1032, 1035 (8th
Cir. 2007) (quotation omitted).
1.
Intentional Destruction.
Other than potential discrepancies regarding when Bitters’ laptop was
stolen, which could certainly be explained by simply losing track of time, Plaintiff’s
counsel has not presented any evidence that Bitters is lying when he states his
laptop was stolen. Had Plaintiff truly believed the date discrepancies were of import
in determining the truthfulness of Bitters’ statements, Plaintiff’s counsel could have
contacted the police and asked for clarification of the date and for any other
information deemed important to the spoliation claims. Or he could have asked
Bitters to produce those documents if the investigating officers were unwilling to
share them with Plaintiff. Or he could have asked this court three months ago for
assistance in deciding whether the laptop was stolen or discarded. He performed
none of those steps, instead waiting until the brink of trial to file a motion and ask
for adverse inferences to present not only at trial, but as evidence opposing
Defendants’ motions for summary judgment.
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Plaintiff’s counsel claims Bitters was subject to a litigation hold prior to the
theft of the laptop. As such, Plaintiff argues any relevant information on the laptop
should have been in counsel’s possession before the laptop was stolen and
Defendant’s counsel is withholding the information. But a litigation hold requires
the client to hold onto the documents: It does not impose an additional duty to
immediately transfer any potentially relevant documents—before they were ever
requested—to counsel. Here, Plaintiff’s counsel initiated no discovery before
September 2017, long after Bitters states his computer was stolen. Plaintiff’s claim
that the documents must be available from Bitters’ counsel lacks merit.
Finally, Plaintiff’s counsel argues that since Bitters did not state he searched
other storage media (e.g., external drives or cloud storage), or computers used in
the past, Bitters did not look in these locations and must therefore be sanctioned
by imposition of an adverse inference. Plaintiff deposed Bitters on April 16, 2018,
after receiving Bitters’ affidavit explaining the theft of the computer. While Plaintiff
claims Bitters could not have used the same laptop computer for eight years, he
has presented no evidence supporting that assumption. And he has presented no
evidence that the information stored on any previous laptop was not transferred to
the new one and then wiped from the old. He presents no evidence that Bitters
used cloud storage or an external drive for storing documents, specifically to
include the 2008-2012 timeframe when the events at issue occurred.
By addressing the stolen computer issue, the court has addressed all facts
of record regarding destroyed evidence or evidence sources—whether by
negligence, intentional, or through the acts of a third person. Upon review of that
evidence, Plaintiff has failed to present a threshold showing that Bitters
intentionally destroyed evidence or a source of potential evidence.
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2.
Prejudice.
Plaintiff has not explained with any specificity what documents would be
stored on the stolen computer and how those documents would assist with his
case. A conclusory argument that Plaintiff needs to see the documents does not
equate to a finding of prejudice. The requisite element of prejudice is satisfied by
identifying the nature of the evidence destroyed. Stevenson v. Union Pac. R. Co.,
354 F.3d 739, 748 (8th Cir. 2004). There must be some evidence of what the
documents would have shown, and what facts must be designated as established
if the court finds documents were intentionally destroyed. Fed. R. Civ. P.
37(b)(2)(i). Simply saying the documents would have been harmful to Defendants’
lawsuit is not enough.
Plaintiff has failed to show any prejudice arising from the inability to obtain
documents from the computer.
B.
Prohibiting Evidence on Affirmative Defenses and Awarding Fees.
District courts possess broad discretion in “establishing and enforcing
deadlines” as well as “maintaining compliance with discovery and pretrial orders.”
In re Baycol Prod. Litig., 596 F.3d 884, 888 (8th Cir. 2010) (citing Marmo v. Tyson
Fresh Meats, Inc., 457 F.3d 748, 758–59 (8th Cir.2006)). In evaluating the
propriety of a discovery motion, the court will evaluate the “entire complex of
circumstances that gave rise to the motion, and what is untimely in one case may
not be in another.” Dziadek v. Charter Oak Fire Ins. Co., 2014 WL 820049, at *3
(D.S.D. 2014) (internal citation omitted).
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The timeliness of discovery motions is an important consideration. A party’s
position may very well be “weaken[ed] or undermin[ed]” when there have been
long delays in requesting discovery, or in requesting remedies when discovery
requests have gone unanswered. Fed. Prac. & Proc. Civ. § 2285 (3d ed.).
Generally, belated discovery motions, especially those foisted on the court on the
eve of trial, are not favored. Id. And courts often deny discovery motions when
faced with looming trials and a pattern of delayed discovery requests and extensive
motion practice. Mercantile Tr. Co. Nat. Ass'n v. Inland Marine Prod. Corp., 542
F.2d 1010, 1013 (8th Cir. 1976) (reasoning, in context of amending complaint, that
parties’ “leisurely approach to discovery” counseled against further delay of trial);
Haviland v. Catholic Health Initiatives-Iowa, Corp., 692 F. Supp. 2d 1040, 1044
(S.D. Iowa 2010) (“[d]iscovery is meant to be a balanced and, hopefully, frontloaded process, not one involving deadline brinkmanship”). Outdoor Cent., Inc. v.
GreatLodge.com, Inc., 2009 WL 10680030, at *1 (W.D. Mo. 2009) (reasoning that
motion to compel filed one month prior to trial was “troubling” and denying the
motion to avoid further delay).
In the Rule 37 context, the court should consider “when the movant learned
of the [alleged] discovery violation, how long he waited before bringing it to the
court’s attention, and whether discovery has been completed.” Long v. Howard
Univ., 561 F. Supp. 2d 85, 91 (D.D.C. 2008).
Plaintiff’s counsel claims Bitters and Boland did not perform a sufficient and
thorough search for documents or discovery responses, did not contact third party
discovery sources or disclose those sources’ contact information, failed to provide
full and complete discovery responses, provided responses that Plaintiff’s counsel
believes are not credible, redacted pages without explanation, failed to adequately
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disclose responses to contention discovery, and failed to identify their trial
witnesses and exhibits.
Plaintiff’s counsel was aware, or should have been aware, of all these
alleged discovery violations three months before Plaintiff filed the Filing 215
motion. The deposition deadline was April 16, 2018. Discovery is closed.
Plaintiff was afforded an opportunity to depose Bitters and Boland after the
written discovery responses were served. During those depositions, Plaintiff’s
counsel could have explored the extent of Bitters’ and Boland’s efforts to fully
respond to discovery. He also could have obtained information to fill any gaps or
lack of clarity in their written discovery responses, or failing that, he could have
promptly brought the matter to the court’s attention. That did not occur.
Plaintiff’s counsel could have obtained some of the information demanded
but not provided through his own initiative; by contacting Plaintiff’s investment and
annuity sources and retrieving information from public sources.3 Apparently, that
did not occur.
Instead, Plaintiff’s counsel waited to file his extensive motion until one week
before the previously scheduled pretrial conference. The motion is untimely.
Sanctions, including prohibiting Defendants from presenting evidence supporting
3
The court recognizes that a party may not be allowed to answer a discovery
request by simply stating that the requested information is publicly available or
available to both parties. But when a party allegedly fails to produce discovery in
response to requests, the requesting party’s failure to obtain information on its own
initiative undermines any claim that the information is so important that a trial
continuance is necessary.
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their affirmative defenses or refuting Plaintiff’s claims, and any award of attorney
fees for filing the untimely motion, will not be awarded.
C.
Contempt.
Plaintiff’s counsel asks the court to find Bitters, Boland, and their counsel in
contempt. While the discovery responses were lacking in some limited respects, I
have fully reviewed the discovery and there is no factual basis for a finding of
contempt. The discovery responses of Bitters and Boland, and the affidavits
provided by the parties may not have met the standards of Plaintiff’s counsel, but
were not sufficiently deficient as to warrant contempt proceedings.
Accordingly,
IT IS ORDERED: that Plaintiff’s motion, (Filing No. 215), is denied, in part,
and referred to Judge Rossiter for ruling, in part, as follows:
1)
Plaintiff’s motion for an adverse inference, to prohibit presenting
evidence in support of affirmative defenses, for an award of fees, and for a finding
of contempt, is denied.
2)
Plaintiff’s Rule 56(d) motion will be ruled on by Judge Rossiter.
3)
Plaintiff’s motion to continue the trial is denied as moot. The court has
already continued the trial to commence on July 9, 2018, with the pretrial
conference to be held on June 26, 2018. (Filing No. 217).
June 20, 2018.
BY THE COURT:
s/ Cheryl R. Zwart
United States Magistrate Judge
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