KCI USA, Inc. v. Healthcare Essentials, Inc.

Filing 360

Findings of Fact and Conclusions of Law The Court enters findings of fact and conclusions of law in support of its determination that case-terminating sanctions in the form of default judgment on all counts in Plaintiff's Third Amended C omplaint (ECF No. 276 ) against Defendants Healthcare Essentials, Inc., Healthcare Essentials, LLC, Healthcare Essentials Medical Devices, LLC, RT Acquisition, Inc., Ryan Tennebar, and Colin Tennebar are warranted. For good cause shown, Plaintiff K CI USA, Inc.'s Motion for Order to Show Cause (ECF No. 269 ) is granted. Plaintiff's Motions for Default Judgment against Defendants Daniel Rader, Anthony Estrada, and Abel Cortez, ECF Nos. 355 and 359 , are also granted. A hearing sha ll be held to allow the Court to determine the amount of damages due Plaintiff. This hearing shall address damages with respect to all Defendants. The hearing shall be held on 7/13/2018 at 10:00 a.m. Plaintiff's brief in support of its damages shall be filed not later than 14 days before the hearing. Any responsive brief shall be filed not later than 7 days prior to the hearing. If necessary, Plaintiff may reply not later than 3 days before the hearing. Judge Benita Y. Pearson on 6/29/2018. (JLG)

PEARSON, J.
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION
KCI USA, INC.,
Plaintiff,
v.
HEALTHCARE ESSENTIALS, INC., et al.,

Defendants.

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CASE NO. 1:14CV549

JUDGE BENITA Y. PEARSON

FINDINGS OF FACT AND
CONCLUSIONS OF LAW
[Resolving ECF Nos. 269, 355, and 359]

Pending, in this aged and hotly contested case, is Plaintiff KCI USA, Inc.’s Motion for
Order to Show Cause (ECF No. 269).1 After notice to the parties, the Court held a hearing on the
motion. The Court has been advised, having reviewed the parties’ briefs, evidentiary
submissions, the applicable law, and oral arguments of counsel, enters its findings of fact and
conclusions of law in support of its determination that case-terminating sanctions in the form of
default judgment on all counts in Plaintiff’s Third Amended Complaint (ECF No. 276) against
Defendants Healthcare Essentials, Inc., Healthcare Essentials, LLC, Healthcare Essentials
Medical Devices, LLC, RT Acquisition, Inc., Ryan Tennebar, and Colin Tennebar (collectively,
“Defendants”) are warranted. For good cause shown, the motion is granted.

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This case has received attention from three federal judges, myriad counsel, and
been stayed to accommodate a criminal prosecution of one of the defendants.

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Also pending are Plaintiff’s Motions for Default Judgment against Defendants Daniel
Rader, Anthony Estrada, and Abel Cortez (the “Texas Defendants”). ECF Nos. 355 and 359.
For the reasons stated below, the motions (ECF Nos. 355 and 359) are also granted.
I. FINDINGS OF FACT
A. The Parties
1. Plaintiff KCI USA, Inc. (“KCI”) is a corporation organized under the laws of the State
of Delaware, having its principal place of business in San Antonio, Texas. ECF No. 276 at
PageID#: 4932, ¶ 2. KCI is a global medical technology company with leadership positions in
advanced wound care therapeutic services. Id. KCI markets, distributes and services V.A.C.
System units (“VACs”) throughout the United States to a variety of healthcare facilities. Id. at
PageID#: 4934, ¶ 17.
2. Defendant Healthcare Essentials, Inc. is a corporation organized under the laws of the
State of Ohio, having its principal place of business in Ohio. Id. at PageID#: 4932, ¶ 3.
Defendant Healthcare Essentials, LLC is a limited liability company formed under the laws of the
State of Ohio, having its principal place of business in Ohio. Id. at ¶ 4. Defendant Healthcare
Essentials Medical Devices, LLC is a limited liability company formed under the laws of the
State of Ohio, having its principal place in Ohio. Id. at ¶ 5. Defendant RT Acquisition, Inc. is a
corporation organized under the laws of the State of Ohio, having its principal place of business
in Ohio. Id. at PageID#: 4933, ¶ 6. RT Acquisition, Inc. is the parent company of Defendants
Healthcare Essentials, LLC and Healthcare Essentials, Inc. Id. Defendant Ryan Tennebar is the
Director of Operations of Healthcare Essentials. Id. at ¶ 7; Hearing Ex. 9.

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3. Healthcare Essentials has been in business since at least 2008 and was or is “owned by
both Ryan and Colin Tennebar” who have identified themselves as “a package deal” for business
purposes. Hearing Exs. 45 and 88. Healthcare Essentials’ 2014 tax return lists Colin Tennebar
as its sole shareholder, possessing a 100% interest in Healthcare Essentials, Inc. ECF No. 64-7 at
PageID#: 769.
4. Defendant Abel Cortez, who resides in El Paso, Texas, is a former Temporary Process
Technician at KCI and worked at KCI from June 2014 to October 2014. ECF No. 276 at
PageID#: 4933, ¶ 9. Defendant Daniel Rader, who resides in El Paso, Texas, is a former Field
Service Representative I at KCI. Id. at ¶ 10. Defendant Anthony Estrada, who resides in El
Paso, Texas, is a former Field Service Representative I at KCI. Id. at ¶ 11.
B. Relevant Factual and Procedural Background
5. On March 12, 2014, Plaintiff KCI filed its original Complaint. ECF No. 1. Defendant
Healthcare Essentials, LLC subsequently filed Counterclaims against Plaintiff. ECF Nos. 10 and
85. KCI’s Third Amended Complaint, filed on February 23, 2017 and pursuant to the Court’s
leave, seeks relief against Healthcare Essentials, Inc., Healthcare Essentials, LLC, and Healthcare
Essentials Medical Devices, LLC (collectively, “Healthcare Essentials”), RT Acquisition, Inc.,
Ryan Tennebar, Colin Tennebar, Abel Cortez, Daniel Rader, and Anthony Estrada. ECF No.
276.2

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KCI’s Third Amended Complaint alleges causes of action against three
additional Defendants, Abel Cortez, Daniel Rader, and Anthony Estrada, i.e. the Texas
Defendants. ECF No. 276. KCI’s Motion to Show Cause (ECF No. 269) does not seek
relief against the Texas Defendants. KCI motion for default judgment against the Texas
(continued...)
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6. In its Third Amended Complaint, KCI alleges that Defendants stole KCI V.A.C.®
System units and built an entire enterprise from that theft. See ECF No. 276. Accordingly, the
Third Amended Complaint asserts causes of action for violations of the Ohio Deceptive Trade
Practices Act, Ohio Revised Code § 4165.02; for conversion under Ohio common law; for unfair
competition under Ohio common law; for tortious interference with a prospective business
relationship under Ohio common law; for civil theft under Ohio Revised Code § 2307.60 and §
2913.51; for replevin under Ohio law, for unfair competition under § 43(a) of the Lanham Act,
for violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C.
§§ 1961 et seq. and the Ohio Corrupt Activities Act (“OCA”), O.R.C. 2923.31 et seq., and; for a
permanent injunction. Id.
7. On January 9, 2017, KCI filed a Motion to Show Cause and Request for Discovery
Hearing arising out of Defendants’ spoliation of evidence. ECF No. 269. On November 9, 2017,
the Court held a hearing on Plaintiff’s Motion to Show Cause (ECF No. 269) regarding
Defendants’ discovery abuses and violations. Following the hearing, the Court permitted the
parties to file simultaneous post-hearing briefs. ECF Nos. 338, 339, 340. As set forth below, the
Court finds that Defendants committed the following discovery misconduct.
1. Discovery Violations
8. Defendants Ryan Tennebar and Colin Tennebar’s discovery responses to KCI’s
discovery requests, seeking information as to: whom Defendants had required KCI VACs, the

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(...continued)
Defendants, see ECF Nos. 355 and 359, is discussed in further detail below.
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price paid for each, at which healthcare facilities they had been used, and the serial numbers of
the VACs, were woefully incomplete. See e.g., ECF 167-8; see also ECF Nos. 167-10, 167-15
(pursuant to the Court’s June 30, 2016 Order, KCI submitted a memorialization of the discovery
status among the parties). As a result, KCI was prompted to notify the Court in a February 16,
2015 letter, which sought the production of all of the information requested by KCI. ECF No.
42-5; Hearing Exs. 72 and 76.
9. On March 13, 2015, KCI filed a Motion for Sanctions due to Defendants’ failure to
comply with the Court’s Orders (ECF Nos. 40 and 41). ECF No. 42. On April 8, 2015,
Defendant Ryan Tennebar submitted a false affidavit seeking to defend against KCI’s Motion for
Sanctions, in which he attested that: (1) “Healthcare Essentials has disclosed to KCI all relevant
information and documentation that it had within its knowledge, possession, custody or control;”
(2) “[b]ecause Healthcare Essentials was not in existence form [sic] 2007 through 2011, it has no
records for that period to produce to KCI;” and, (3) “I can attest that Healthcare Essentials
conducts business mostly on verbal agreements. But it provided to KCI all of the written
contracts with its customers that it had in its possession, custody or control.” See Hearing Ex.
91, ¶ 9.
10. Despite the Court’s Orders and Defendants’ representations, Defendants failed to
disclose responsive communications and documents spanning a period of nearly a decade. See
e.g., Hearing Exs. 1

8, 17

23, 54, 56

58, 62

65. As evidenced in the examples provided

below, many of these communications go directly to the heart of KCI’s claims of theft, fraud,
misrepresentations in the marketplace, and customer confusion. All undisclosed

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communications identified herein and introduced at the Show Cause hearing were acquired by
KCI in third-party discovery and via subpoenas. See ECF No. 331 at PageID#: 5736.
i. Undisclosed Communications and Documents3
11. Defendants failed to produce blog posts dating back to 2008 demonstrating that
Healthcare Essentials advertised its rental services for KCI VACs and other products during and
before that time period. Hearing Ex. 1 (“You are able to rent Wound VACS through a GPO
called Healthcare Essentials at half the cost.”).
12. Defendants failed to produce an e-mail dated December 6, 2011, in which Ryan
Tennebar represents to a third party that he had forty-four (44) KCI VACs in his inventory and
that he “received them from Canada.” Hearing Ex. 7.
13. Defendants failed to produce an e-mail dated December 9, 2011, in which Ryan
Tennebar e-mailed Colin Tennebar and other Healthcare Essentials employees stating that there
was “a $240,000 annual account for us I just closed. All of these homes are very high acuity and
run between 8

12 VACS at any given time.” Hearing Ex. 8. In providing this information,

Ryan Tennebar asked Colin Tennebar how he wanted to proceed. Id. The e-mail also contains
Ryan Tennebar’s communication with Healthcare Essentials’ customer, in which he offered
“$70/Day for the KCI VAC Fleet as first available” and represents that “[t]he Smith and Nephew
VAC and KCI VAC Therapy are exactly identical to one another.” Id.

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These communications establish that Healthcare Essentials was, indeed, doing
business prior to 2012 and was and is in possession of responsive documents and
information from the time period of at least 2008 2011. The Court notes that these are
only a few of the multitude of such undisclosed communications. See Hearing Exs. 2, 3,
4, 6, 9, 10, 24, 32, 37, 38, 42, 51, 53, 55, 57, 63, 84, 94, and 126.
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14. Importantly, all of the above communications occurred prior to 2012 and during the
time period in which Ryan Tennebar testified that Healthcare Essentials was not in business and
did not exist. Hearing Ex. 91. Furthermore, Defendants failed to produce an email
communication dated March 10, 2014 from Ryan Tennebar to a healthcare facility, in which
Ryan Tennebar states as follows:
“We have been in business for six years. We import our inventory and
have a direct supply channel with both KCI and Smith and Nephew. In
Ohio alone, we have over 200 customers from NFP chains to FP
customers. I work with KCI Corporate on a higher level than a field
services rep because of the home-care business I generate for them.
Nothing is illegal about this operation.”
Hearing Ex. 48.
15. Furthermore, Defendants failed to produce an e-mail dated October 10, 2012 that was
sent to Ryan Tennebar, containing a list of KCI supplies available for acquisition. Hearing Ex.
12.
16. Defendants failed to produce an e-mail dated October 18, 2012, in which Ryan
Tennebar states to a customer that a “KCI VAC was dropped and it snapped the power port out
of the device,” that “KCI didn’t pick-up their two KCI VAC Freedoms so we placed one of their
KCI VAC Freedoms on [a patient] so he could resume VAC Therapy,” and requested that the
customer “make certain KCI suspends your billing for [a patient] because ours was placed
10/16/2012.” Hearing Ex. 13.
17. Defendants failed to produce a contract between Healthcare Essentials and a
third-party healthcare facility dated December 14, 2012, signed by Ryan Tennebar. Hearing Ex.

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16. The contract provides that Healthcare Essentials was to provide “KCI Portable VAC
‘Freedom’” devices and “all necessary . . . KCI Wound VAC components[.]” Id.
18. Defendants failed to produce an email dated February 27, 2013 from Ryan Tennebar,
in which he states that Healthcare Essentials “is the only company in the USA that distributes
Smith and Nephew Renasys and KCI to Hospitals, LTACS and Long-Term Care Facilities . . .
We have one primary supplier in another country for our KCI inventory.” Hearing Ex. 31.
19. Defendants failed to produce an email dated June 2, 2013 from Ryan Tennebar to
Colin Tennebar, in which Ryan Tennebar forwards e-mails between himself and a KCI
representative regarding the purchase of Healthcare Essentials’ VAC Division. Hearing Ex. 38.
20. Defendants failed to produce an e-mail communication dated December 10, 2013
from Ryan Tennebar to a KCI representative, in which Ryan Tennebar states “Colin and I really
would like to work together and come to some sort of an agreement . . . Colin and I are twins and
a package deal.” Hearing Ex. 45.
21. Defendants failed to produce an e-mail dated July 11, 2014 from Ryan Tennebar to a
third-party representative at a healthcare facility, in which he responded to allegations of expired
KCI supplies and wound kits that Defendants relabeled with other expiration dates. Hearing Ex.
56. In the e-mail, Ryan Tennebar states “[w]e receive thousands of kits per month from the KCI
manufacturing plant, to a third party distributor and then to me . . . We had an issue with strictly
our white foam and that was field destroyed months ago.” Id.
22. Defendants failed to produce an e-mail chain dated November 24, 2014 from Ryan
Tennebar to a Healthcare Essentials customer, in which the customer’s representative stated that

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she “personally saw expired dressings, as well as there were other concerns. We also have
discussed numerous times of you guys taking a KCI vac which has never been brought back.”
Hearing Ex. 66.
23. Defendants failed to produce an “Executive Summary” dated March 28, 2015, that
was saved on Healthcare Essentials’ office computer in which Defendants summarized the
formation and business operations of Healthcare Essentials. Hearing Ex. 88. The Executive
Summary boasts “$2 Million in revenue” and states that: Healthcare Essentials “is owned by both
Ryan and Colin Tennebar with each having a fifty percent equity in the company. We are
identical twin brothers and work together through our different partner channels to make this
operation both clinically sound and financially successful.” Id. The Executive Summary also
states that “[f]rom January 2013 to January 2014 the [negative pressure wound vacuums therapy]
(“NPWT”) line grew over 100% during the course of that calendar year.” Id. (alterations added).
24. Defendants failed to produce an e-mail dated August 17, 2015 from Ryan Tennebar
to Healthcare Essentials’ employees and Colin Tennebar. Hearing Ex. 119. In the e-mail, Ryan
Tennebar states that Healthcare Essentials is “merging forces with Healthcare Essentials South
with Phil [Alhir] and Derek’s team,” whose “multiple businesses exceeds $20 Million dollars
annually.” Id. Healthcare Essentials South is a former defendant in this case that agreed to entry
of a permanent injunction in KCI’s favor. ECF No. 161.
25. Defendants failed to introduce an e-mail dated November 24, 2015 from a Healthcare
Essentials’ customer to Phillip Alhir and Ryan Tennebar, in which the customer states “[w]e

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received 3 [KCI] activacs instead of 2! The condition of 2 was deplorable and marla said she
would not want to put on anyone.” Hearing Ex. 126.
26. Defendants failed to produce numerous communications between Defendant Ryan
Tennebar and pro se Defendant Abel Cortez, who is a former Temporary Process Technician at
KCI. ECF No. 331 at PageID#: 5783. These undisclosed communications establish that a clear
pattern and scheme through which Ryan Tennebar acquired stolen KCI VACs, supplies, and
VAC security codes from Defendant Abel Cortez. See Hearing Exs. 17

23, 25

28, 30. The

undisclosed communications include:
(1) an email dated January 11, 2013, in which Defendant Cortez attaches a “pic of
the FedEx receipt with tracking # for the 4 vacs” he sent to Ryan Tennebar. Hearing Ex. 17.
Ryan Tennebar responds that he needs “those service passcode for each vac so when the timer
locks it up I’m not screwed. Your buddyy [sic] knows what I’m talking about.” Id.; and,
(2) an e-mail chain also dated January 11, 2013, in which Abel Cortez states that
he has “the codes . . . $100 each,” and Ryan Tennebar responds “[p]lease help for another $100.
I have a VAC Freedom that needs reset. Can you ask your friend very quickly how to reset a
VAC Freedom and which buttons to press please.” Hearing Ex. 18.
Healthcare Essentials needed the “codes” to restart VACs that had shut down because they had
not been cleaned or serviced by Defendants.
27. Defendant Colin Tennebar stored KCI-related records at his residence well after the
Injunction Orders were issued and attempted to show these records to law enforcement on April
12, 2017. See Hearing Ex. 157.

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ii. Fabricated Invoices and Inventory Spreadsheets Produced in
Discovery and Filed With the Court
28. Defendants created and submitted false invoices and inventory spreadsheets of
Healthcare Essentials’ KCI VAC inventory to demonstrate legal purchases of KCI VACs to the
Court and in response to KCI’s discovery requests. See ECF No. 328-1 at PageID#: 5693

94

(former Healthcare Essentials employee, Rose Edgar, testified that Defendant Ryan Tennebar
requested that she create fictitious invoices to demonstrate purchases of KCI VACs); ECF No.
333-4 at PageID#: 5954

56 (Defendant Ryan Tennebar testified at his September 1, 2016

deposition that the lists of KCI VACs and inventory spreadsheet Defendants produced to KCI
and submitted to the Court were “not legitimate” and “fabricated.”).
2. Defendants’ Violations of the Court’s Injunction Orders
29. On July 1, 2016, the Court granted KCI’s Motion for a preliminary injunction and
enjoined Defendants from (1) representing that they were in any way affiliated with KCI; and
from (2) marketing, distributing, selling, leasing, servicing, obtaining, or otherwise disseminating
any KCI VAC Therapy System and any other KCI products related to that therapy system. ECF
No. 162.
30. On July 21, 2016, KCI filed an Emergency Motion to Show Cause based on evidence
that Healthcare Essentials had violated and was in continued violation of the preliminary
injunction order. ECF No. 177. On August 5, 2016, and following a hearing on KCI’s Motion,
the Court held Defendant Ryan Tennebar in civil contempt for violations of the preliminary
injunction order, as well as for Defendants’ failure to produce a list of all “VAC’s in use.” ECF
Nos. 182 and 208.
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31. In response to the Court’s multiple Orders (June 30, 2016 Minutes of Proceedings;
ECF Nos. 168, 171, 182), Colin Tennebar executed a false affidavit attesting that “Defendants’
Supplement to Plaintiff’s Memorialization of Discovery Status is true and accurate,” and that
“Health Care Essentials, Inc. and Healthcare Essentials, LLC have fully and truthfully answered
all of KCI USA’s discovery requests.” See ECF No. 203. The Court subsequently released Ryan
Tennebar from federal custody on August 8, 2016. ECF No. 216.
32. On August 9, 2016, the Court issued an Amended Injunction Order based on a
stipulation of the parties, enjoining Defendants from marketing, distributing, selling, leasing,
servicing, or otherwise disseminating any device or product to treat patient wounds in a hospital,
post-acute setting, nursing home facility, home care, or any other treatment facility. ECF No.
218. The prohibition specifically included treatment of wounds with negative pressure wound
therapy (“NPWT”) devices or products including, but not limited to devices or products
manufactured by KCI, Smith & Nephew, Medela, or any other manufacturer. Id. at PageID#:
4075. The Amended Injunction Order required Defendants to remove all NPWT devices from
the market by 12:00 p.m. on August 15, 2016. Id. at PageID#: 4075

76.

33. On August 16, 2016, the Court issued a Modified Amended Injunction Order,
extending the deadline for Defendants to remove their NPWT devices from the market to August
25, 2016. ECF No. 226. All remaining prohibitions in the July 1, 2016 Preliminary Injunction
and the Amended Injunction Order remained intact. Id. The Court’s preliminary injunction
orders (ECF Nos. 162, 218, 226) are collectively referred to as the “Injunction Orders.”

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34. On August 26, 2016, KCI filed a Motion to Show Cause for additional violations of
the Court’s Injunction Orders and for other discovery violations by Defendants. ECF Nos. 177,
243. The Court’s September 23, 2016 Order, put Defendants on notice that, “should the Court
find by clear and convincing evidence any violation of court orders, the Court will impose any
sanction it considers appropriate, including but not limited to adverse inferences; prohibiting
Defendants from supporting or opposing designated claims or defenses; prohibiting introduction
of designated matters into evidence; entering default judgment against Defendants and in
Plaintiff’s favor on Plaintiff’s claims[.]” ECF No. 250 at PageID#: 4628.
35. Despite numerous Court Orders prohibiting Defendants from conducting business
and selling medical devices, while litigation was pending, Defendants continued to sell medical
products to healthcare facilities after the Amended Injunction Order and Modified Amended
Injunction Order. See Hearing Exs. 144

47. Ryan Tennebar’s PayPal records also show

purchases of NPWT products following the Injunction Orders from July 1, 2016 to November 5,
2016. Hearing Ex. 137. Additionally, the voicemail recordings introduced at the November 9,
2017 Show Cause hearing demonstrate that Defendants continued to conduct business selling
wound care vacuums well after the Court’s Injunction Orders. See ECF No. 338-1.
3. Defendants’ Spoliation of Evidence
i. Deletion of Data From Electronic Devices
36. In direct violation of the Court’s July 28, 2016 Order, Defendants failed to timely
deliver their work and personal electronic devices to the Court on Friday, July 29, 2016.

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ECF No. 191. The Court sanctioned Defendants $5,000.00, jointly and severally, for failing to
timely comply with the Court’s Order. ECF No. 197.
37. Based on third-party consultant Vestige Digital Investigation’s (“Vestige”) inventory,
data analysis, and deletion analysis with respect to Defendants’ electronic devices, Defendants
installed several data removal programs on their ASUS computer and cellular phones that
overwrote and deleted files on these devices.4 See ECF Nos. 254, 269-2. In accordance with this
finding, Vestige was able to conclude that a program called “Eraser” was installed on
Defendants’ ASUS office computer that deleted information contained in the ASUS’ hard drive
folder and “Recycle Bin.” ECF No. 269-2 at PageID#: 4843

45, ¶¶ 6

19. Additionally,

Vestige received an iPhone 6 and a Samsung Galaxy S6 Edge Plus (“Samsung”) on or about
December 14, 2016. Id. at ¶ 20. These devices were not deposited with the Court as ordered or
when ordered and instead were provided to KCI’s counsel in December 2016, months later. ECF
Nos. 262, 263, 269-3. The Samsung has a telephone number of 216-644-6455 and belongs to
Ryan Tennebar. See ECF No. 266-3 at PageID#: 4800. Vestige also discovered deletion
programs on the Samsung device. ECF No. 269-2 at PageID#: 4845, ¶ 20.

4

Pursuant to the Court’s November 4, 2016 Order, KCI was permitted to engage
a third-party consultant to inventory and analyze Defendants’ hardware deposited with the
Court. ECF No. 254. KCI’s Motion to Show Cause contains a declaration from Greg
Kelley, the Chief Technology Officer of Vestige. ECF No. 269-2. Mr. Kelley testified
that Vestige performed an inventory, data analysis, and deletion analysis with respect to
the electronic devices acquired from the Court on November 8, 2016 that were delivered
by Defendants. See, e.g., Hearing Ex. 160. His testimony contains several findings,
which remain unrebutted, and Defendants have not submitted any evidence to contradict
his testimony.
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Specifically, Vestige discovered four deletion programs installed on the Samsung: History
Cleaner, iShredder 4 Professional (“iShredder”), Fill Device Memory, and MobileGo. Id.5
ii. Witness Intimidation and Interference
38. Defendants intimidated and intefered with KCI’s gathering of witness testimony
when Defendant Ryan Tennebar sent an email to a non-party fact witness, Mary Lou Diaz,
warning her to stay out of his “business affairs.” Hearing Ex. 103. In the email, Ryan Tennebar
also stated that he still had the receipt from when he purchased Cleveland Cavaliers tickets for
Ms. Diaz and her husband, and that if she is subpoenaed, “accepting the Cavs tickers is a clear
violation.”6 Id.
39. Defendants intimidated and intefered with KCI’s gathering of witness testimony
when Ryan Tennebar e-mailed Phillip Alhir, a witness subpoenaed by KCI, and stated “SAY
YOUR [sic] OUT OF TOWN. DISCOVERY ENDS 10-22 and thecant [sic] pursue after that
date.” Hearing Ex. 124.

5

History Cleaner is an application designed to delete browser history, messages,
call logs, and call statuses on a mobile phone. On July 29, 2016, “message cleaner” was
searched for in the Google Play Store. History Cleaner was subsequently installed on the
Samsung on July 29, 2016 at 12:15 p.m. ECF No. 269-2 at PageID#: 4846,¶ 21.
iShredder is an application designed to wipe and erase free space on a device, delete file
folders, and delete photos and contacts. Id. at ¶ 22. iShredder was first searched for in
the Google Play Store on November 16, 2016 at 3:26 p.m. Id. Fill Device Memory is
designed to overwrite these deleted files with plain text files, making the data truly
unrecoverable. Id. at ¶ 23. MobileGo is an application designed to delete cache files on
devices and can erase photos and videos. Id. at ¶ 24.
6

This email was forwarded to Colin Tennebar. See Hearing Ex. 103.
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iii. Physical Destruction of KCI Products and Relevant Documents
40. On July 1, 2016, Defendants produced to KCI’s counsel a large plastic bin of broken
and destroyed KCI VACs. ECF Nos. 177 at PageID#: 3461; 177-6. Subsequent to Defendants’
delivery of these broken KCI VACs and KCI’s notice of same (ECF No. 177), on July 22, 2016,
the Court ordered Defendants to deliver all KCI VACs in their actual or constructive possession
to KCI’s counsel on or before July 25, 2016. ECF No. 182 at PageID#: 3675. In an effort to
make KCI VACs untraceable, Defendants delivered a large bin containing fifteen (15) KCI
VACs without any Healthcare Essentials’ identifying information. See ECF No. 185-1; 185-2.
Additionally, Defendants altered the serial numbers embedded in KCI VACs. See Hearing Ex.
62.
41. On April 12, 2017, Ryan and Colin Tennebar removed boxes containing Healthcare
Essentials’ records, documents, and other items of evidentiary value to the litigation from a selfstorage facility in Brecksville, Ohio. Hearing Ex. 159.
42. Any conclusion of law deemed to be a finding of fact is hereby included as a finding
of fact.
II. CONCLUSIONS OF LAW
A. Preliminary Matter
1. As a preliminary matter, the Court addresses whether Defendants Ryan and Colin
Tennebar are liable under the piercing the corporate veil theory. The Sixth Circuit has held that
“when a corporation exists solely for the purpose of serving as an alter ego for its owners, the
courts will not permit themselves to be blinded or deceived by mere forms or law.”

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Flynn v. Greg Anthony Constr. Co., 95 F. App’x 726, 733 34 (6th Cir. Nov. 7, 2003) (internal
quotation marks omitted). Rather, the courts “will deal with the substance of the transaction
involved as if the corporate agency did not exist and as the justice of the case may require.” Id.
2. Under Ohio law, courts will disregard the corporate entity and hold an individual
liable when the corporate form is abused. See Rutherlan Enter., Inc. v. Zettler Hardware, 60 F.
Supp. 3d 828, 837 (S.D. Ohio Nov. 14, 2014) (explaining that a corporation’s veil may be
pierced and individual shareholders held liable when: (1) the shareholders to be held liable
exercised control over the corporation such that it had no mind, will, or existence of its own; (2)
the shareholders used their control over the corporation to commit fraud, an illegal act, or a
similarly unlawful act; and (3) the plaintiff suffered injury or unjust loss as a result) (citing
Dombroski v. WellPoint, Inc., 119 Ohio St.3d 506, 511, 895 N.E.2d 538, 543 (2008) (quoting
Belvedere Condo. Unit Owners’ Ass’n v. R.E. Roark Cos., Inc., 67 Ohio St.3d 274, 288 89, 617
N.E.2d 1075, 1086 (1993)).
3. By virtue of the conduct described above, Defendants Ryan and Colin Tennebar
created Healthcare Essentials, Inc. and Healthcare Essentials, LLC, with each as the sole
member/shareholder, respectively. By virtue of the misconduct described above, at all relevant
times, there is overwhelming proof to support a finding that Defendants failed to follow
corporate formalities and used the companies for illegal purposes. By reason of the foregoing,
Defendants shall be held jointly and severally liable under theory of piercing the veil.

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B. Authority for Granting Default Judgment
4. Default judgment and terminating sanctions for violating discovery orders and the
spoliation of evidence is warranted in instances in which the disobedient party, who, having
control over the evidence had an obligation to preserve it at the time it was destroyed, “knew the
evidence was relevant to some issue at trial and . . . [their culpable] conduct resulted in its loss or
destruction.” Beaven v. U.S. Dep’t. of Justice, 622 F.3d 540, 553

54 (6th Cir. 2010) (internal

quotation marks omitted). Culpable conduct exists when a party intentionally chooses not to
preserve relevant evidence and deliberately orders its destruction. See Beaven, 622 F.3d at 554.
Bad faith is not relevant to whether a sanction should be imposed, but rather is more
appropriately considered when deciding the type of sanction to impose following a finding of
spoliation. Johnson v. Metro. Gov’t of Nashville & Davidson Cty., Tenn., 502 F. App’x 523, 533
(6th Cir. Oct. 18, 2012).
5. The court may remedy the violation of discovery orders and spoliation of evidence
with case-terminating sanctions under: (1) Fed. R. Civ. P. 37(b)(2), which permits the court to
sanction a party for disobeying a discovery order; (2) the court’s inherent authority to sanction
abusive litigation practices; and (3) Fed. R. Civ. P. 37(e), which permits the Court to sanction a
party for the spoliation of electronic evidence. Each of these authorities have different
requirements, although courts often follow the same analysis when considering terminating
sanctions under Rule 37(b)(2) and the court’s inherent power.
6. Under Rule 37(b)(2), a court may sanction a party for failing to comply with discovery
orders, including dismissing the action or entering default judgment against the disobedient party.

18

(1:14CV549)
Bank One of Cleveland, N.A. v. Abbe, 916 F.2d 1067, 1073 (6th Cir. 1990). Similarly, the Sixth
Circuit has held that a federal court’s inherent powers include broad discretion to impose
terminating sanctions such as “dismissing the case [or] granting summary judgment” when
crafting proper sanctions for spoliated evidence. Adkins v. Wolever, 554 F.3d 650, 651 (6th Cir.
2009). Fed. R. Civ. P. 37(e) applies when “electronically stored information” that should have
been preserved “is lost” and “cannot be restored or replaced through additional discovery.” If the
court finds that the spoliating party “acted with the intent to deprive another party of the
information’s use in the litigation,” the court may “presume that the lost information was
unfavorable to the party” or dismiss the action altogether. Fed. R. Civ. P. 37(e); see Fharmacy
Records v. Nassar, 379 F. App’x 522, 524

25 (6th Cir. June 7, 2010) (explaining that under the

Rule 37(e)(2), it is not an abuse of discretion for a court to dismiss an action when a party
deliberately deletes electronic data, thereby depriving the other party of primary evidence in the
case).
7. Furthermore, Fed. R. Civ. P. 16(f)(1)(C) permits a district court to “issue any just
orders, including those authorized by Rule 37(b)(2)(A)(ii)-(vii), if a party or its attorney . . . fails
to obey a scheduling or other pretrial order.” Fed. R. Civ. P. 16(f)(1)(C). This includes granting
default judgment or dismissal if a party violates a district court’s preliminary injunction order.
See Stryker Corp. v. Prickett, No. 1:14-CV-1000, 2017 WL 2262846, at *2 (W.D. Mich. May 24,
2017) (granting default judgment in plaintiff’s favor for defendant’s “continued” violations of a
preliminary injunction “even after the Court found Defendants in contempt for violating the
preliminary injunction[.]”).

19

(1:14CV549)
8. A case-terminating sanction for abusive discovery practices under these authorities
requires a finding of “willfulness, bad faith, or fault.” See Schafer v. City of Defiance Police
Dept., 529 F.3d 731, 737 (6th Cir. 2008). In other words, the party to be sanctioned has
displayed “either an intent to thwart judicial proceedings or a reckless disregard for the effect of
his conduct on those proceedings.” Id.
9. Four factors are generally considered when determining whether default judgment is
the appropriate sanction for a discovery violation under Rule 37: (1) whether the disobedient
party acted with willful bad faith; (2) whether the opposing party suffered prejudice; (3) whether
the court warned the disobedient party that failure to cooperate could result in a default
judgment; and (4) whether less drastic sanctions were imposed or considered. See Fharmacy
Records, 379 F. App’x at 524 (explaining that the factors considered when reviewing a dismissal
of an action or default judgment under Rule 37(b) or a court’s inherent power are largely the
same). See also Wu v. T.W. Wang, Inc., 420 F.3d 641, 643 (6th Cir. 2005); Grange Mut. Cas.
Co. v. Mack, 270 F. App'x 372, 376 (6th Cir. Mar. 17, 2008) (citing Bank One of Cleveland,
N.A., 916 F.2d at 1073). “Although typically none of the factors is outcome dispositive, . . . a
case is properly dismissed by the district court where there is delay or contumacious conduct,”
i.e., conduct that is “‘perverse in resisting authority’ and ‘stubbornly disobedient.’” Schafer, 529
F.3d at 737 (quoting Webster’s Third New International Dictionary 497 (1986)).
10. Dismissal or entry of default judgment is the sanction of last resort but the Sixth
Circuit has taken the position that, “if a party has the ability to comply with a discovery order and
does not, dismissal [or entry of default judgment] is not an abuse of discretion.”

20

(1:14CV549)
Stamtec, Inc. v. Anson, 195 F. App’x 473, 478 (6th Cir. 2006) (internal citation omitted)
(alteration added). Furthermore, the Sixth Circuit had held that when a party destroys evidence
to conceal information, sanctions lesser than case termination will not suffice. See Grange Mut.
Cas. Co., 270 F. App’x at 377.
11. By virtue of the conduct the Court described herein, all of the factors articulated by
the Sixth Circuit support granting default judgment in KCI’s favor under the Court’s inherent
authority and Rule 37 against Defendants Healthcare Essentials, Inc., Healthcare Essentials, LLC,
Healthcare Essentials Medical Devices, LLC, RT Acquisition, Inc., Ryan Tennebar, and Colin
Tennebar.
1. Willfulness, Bad Faith and Fault
12. In considering this first factor, it is important to underscore that this is not a case in
which merely a few documents were omitted from the production of discovery. Rather, the
record reveals that Defendants engaged in a protracted, repeated, and willful pattern of
obstructing discovery and delaying the progress of this case. First, with respect to the Court’s
discovery Orders, Defendants blatantly and willfully disregarded multiple Orders requiring
production of: all KCI property; all customer information; a list of inventory; a list of locations of
all KCI VACs; all electronic devices; as well as failed to generally cooperate in discovery. See
ECF No. 182 (Court Order requiring Defendants to produce evidence responsive to discovery
requests including, “[a]ll KCI V.A.C.’s in possession of Defendants,” and “a list identifying the
KCI V.A.C.’s by serial number, location of the facility where the unit is in use, and the
anticipated date that the unit will no longer be in use.”); ECF No. 191 at PageID#: 3751 (“[D]ue

21

(1:14CV549)
to the Court’s concerns with Defendants Healthcare Essentials, Inc., Healthcare Essentials, LLC,
RT Acquisition, Inc., Colin Tennebar, and Ryan H. Tennebar’s failure to comport with the letter
and spirit of the Court’s prior orders, . . . Defendants shall immediately relinquish all of their
company and personal hard drives, mobile devices, and desktop computers to the Court.”); ECF
No. 197 at PageID#: 3894 (“Despite confirmation of receipt of the Court’s Order and assurance
of compliance, Defendants failed to produce ‘all company hard drives and laptop computers’ to
the Court.”); ECF No. 208 at PageID#: 3999 (“Despite the Court’s written and oral articulations .
. . Defendants have failed to comply with the Court’s orders, including that requiring the
production of a list of all “V.A.C.’s in use” identified by KCI’s serial number and additional
identifying information. ECF No. 182 at PageID#: 3675.”).
13. As indicated in the “Findings of Fact” section, KCI has identified myriad responsive
documents and communications willfully withheld by Defendants in violation of the Court’s
Orders. See, e.g., Hearing Exs. 1

8 (Defendants failed to produce communications establishing

that Healthcare Essentials was in business and existed prior to 2012, despite Ryan Tennebar’s
testimony that Healthcare Essentials created in 2012); Hearing Exs. 8, 16, 31

32, 48, 56 (e-mail

communications in which Defendants indicate that they are legally selling KCI VACs); Hearing
Ex. 12 (an undisclosed email dated October 10, 2012, containing a list of KCI supplies for
acquisition); Hearing Ex. 42 (an undisclosed email chain dated October 11, 2013 regarding a
Healthcare Essentials’ customer receiving an expired “bridge unit” (wound kits/bandages), in
which Ryan Tennebar states “[d]oesn’t matter. Their [sic] still good.”); Hearing Ex. 157 (both
Ryan and Colin Tennebar continued to store KCI VACs and KCI supplies at an undisclosed

22

(1:14CV549)
storage location, well after the Injunction Orders and up to April 12, 2017; and, Defendant Colin
Tennebar stored KCI-related records at his residence well after the Injunction Orders and
attempted to show these records to law enforcement).
14. Instead of producing the requested discovery, Defendant Ryan Tennebar, on behalf of
Healthcare Essentials, executed and submitted false affidavits to the Court, in which he testified
that Healthcare Essentials: (1) fully complied with the Court’s discovery Orders, (2) produced all
responsive information to KCI, and (3) was not in existence from 2007 through 2011. See Hrg.
Exs. 91 and 136. Moreover, in response to the Court’s multiple Orders (June 30, 2016 Minutes
of Proceedings; ECF Nos. 168, 171, 182), Colin Tennebar executed a false affidavit attesting that
“Defendants’ Supplement to Plaintiff’s Memorialization of Discovery Status is true and
accurate,” and that “Health Care Essentials, Inc. and Healthcare Essentials, LLC have fully and
truthfully answered all of KCI USA’s discovery requests.” See ECF No. 203.
15. In addition to the foregoing, Defendants also thwarted discovery by creating fake
invoices and inventory spreadsheets purporting to show the lawful purchase of KCI products.
See ECF Nos. 328-1 at PageID#: 5693; 333-4 at PageID#: 5954. And, despite numerous
Injunction Orders enjoining Defendants from engaging in the business of selling, servicing, or
otherwise disseminating any device or product to treat patient wounds in a treatment facility,
Defendants Healthcare Essentials and Ryan Tennebar continued to provide NPWT products to
healthcare facilities in violation of the Court’s Orders. See Hearing Exs. 137, 144

149. See

also ECF No. 338-1 (voicemail recordings introduced at the November 9, 2017 Show Cause

23

(1:14CV549)
hearing demonstrate that Defendants continued to conduct business selling wound care vacuums
well after the Court’s Injunction Orders).
16. In regards to spoliation of evidence, Defendants deliberately destroyed electronically
stored information during this case and in direct violation of the Court’s Orders. The testimony
of KCI’s third-party consultant, Vestige, remains unrebutted and the Court adopts that testimony
in holding that Defendants’ spoliated evidence with respect to the electronic devices identified.
See ECF No. 269-2. See also Beaven, 622 F.3d at 554

55 (explaining that a court may rely on

third party testimony regarding destroyed evidence when considering whether to issue sanctions
for the spoliation of relevant evidence). Furthermore, Defendants delivered intentionally broken
and destroyed VAC units and stripped labels off of others, knowing that the labels
corresponded to the maintenance, cleaning, sterilization records

that

were critical to KCI’s

identification of the stolen VACs. See Hearing Ex. 62 (KCI introduced at least one
communication from Ryan Tennebar that he sent during this litigation in which he states that he
was “getting these embedded serial numbers erased” on KCI VACs in his possession); ECF No.
177-6 (evidence of VACs with indiscernible or altered serial numbers). Defendants also tried to
block Plaintiff’s attempt to take discovery from third-party witnesses. See Hearing Exs. 103 and
124. Lastly, both Colin and Ryan Tennebar traveled to a storage unit where they both
encountered KCI property, and began throwing them in a nearby dumpster. See Hearing Exs.
154, 155, 158, and 159.
17. Accordingly, the substantial evidence supports a finding of willfulness, bad faith and
fault on the part of Defendants. See Fharmacy Records, 379 F. App’x at 527 (affirming

24

(1:14CV549)
dismissal of action because the plaintiff and his counsel destroyed and misrepresented evidence,
and made late disclosures of responsive documents). The first factor, therefore, weighs heavily
in favor of default judgment.
2. Prejudice to KCI
18. It is also evident that the prejudice to KCI is palpable. For nearly three years its
efforts to procure information crucial to its case have been as unsuccessful as they have been
persistent. Since KCI first served Defendants with comprehensive discovery requests KCI still
has not received adequate answers to interrogatories and document production requests. See
ECF No. 167-8. See, e.g., Universal Health Grp. v. Allstate Ins. Co., 703 F.3d 953, 956 (6th Cir.
2013) (granting dismissal and finding the plaintiff’s failure to provide adequate discovery
responses prejudiced the defendant “by preventing it from obtaining evidence essential to the
preparation of its defense”); Harmon v. CSX Transp., Inc., 110 F.3d 364, 367 (6th Cir.1997)
(finding that it was not an abuse of discretion for the district court to grant defendant’s Rule 37
motion to dismiss because plaintiffs had not complied with defendant’s discovery requests or
court orders for over nine months). Defendants have deprived KCI of, at the least, evidence
demonstrating to whom KCI VACs were leased and when, Defendants’ financial data,
Defendants’ email correspondence, the number of KCI VACs acquired by Defendants,
Defendants’ telephone records, and serial numbers on VACs that were utilized and distributed by
Defendants.

25

(1:14CV549)
19. As a result of the discovery misconduct, Plaintiff has been deprived of its right to
discoverable evidence which it could have used to properly litigate this case before the Court. In
light of the foregoing, this factor also weighs heavily in favor of default judgment.
3. Fair Warning
20. With respect to the third factor, Defendants received more than adequate notice that
default judgment was a potential sanction for their discovery misconduct. The Court issued
multiple orders

each Order clearly warning Defendants that additional sanctions and litigation

disadvantages would be issued if they continued to violate court orders and refuse to cooperate in
discovery. See ECF Nos. 197, 208, 218, 226, 250. The Court specifically threatened the “entry
of default judgment” if Defendants continued to violate and resist the Court’s Orders. ECF No.
250. The Court also fined Defendants $5,000.00, jointly and severally, and incarcerated
Defendant Ryan Tennebar for contempt in an effort to force compliance with its Orders and
cooperation in discovery. ECF Nos. 197 and 208. Therefore, this factor also weighs in favor of
default judgment.
4. Alternative Sanctions
21. As to the last factor, the situation in the present case is so extreme that consideration
of lesser sanctions does not militate against a default judgment. While district courts may
“impose many different kinds of sanctions for spoliated evidence,” the appropriate sanction
“should serve both fairness and punitive functions.” Beaven, 622 F.3d at 554. As indicated
above, Defendants have willfully fabricated, tampered with, and concealed evidence; repeatedly
disobeyed the Court’s orders; and, deliberately destroyed electronically stored information and

26

(1:14CV549)
KCI VACs in their possession, all while litigation was pending. The Sixth Circuit has held that,
“it is in cases like this one, where the obstruction prevented the other party from accessing
evidence needed to bring the case, that default is most likely to be the appropriate sanction.”
Grange Mut. Cas. Co., 270 F. App’x at 377 (affirming the district court’s holding that default
judgment was the appropriate sanction against the defendants who destroyed and withheld
evidence and otherwise refused to cooperate in discovery). See, e.g., Bass v. Jostens, Inc., 71
F.3d at 237, 241 (6th Cir. 1995) (affirming the district court’s dismissal of the plaintiff’s
complaint with prejudice because the plaintiff “failed to comply with four discovery orders of the
court, failed to appear for a properly noticed deposition, and never sought any type of protective
order from the court”); Tech. Recycling Corp. v. City of Taylor, 2006 WL 1792413, at *6 (6th
Cir. June 28, 2006) (finding default judgment proper when party failed to comply with four court
orders to produce discovery); Ndabishuriye v. Albert Schweitzer Soc’y, USA, Inc., 2005 WL
1386475, at *5 (6th Cir. June 6, 2005) (finding default proper when party caused delay, failed to
produce discovery after court orders and produced no financial information whatsoever).
22. The Court does not arrive at this conclusion lightly. The facts of this case and the
level and extent of willful misconduct dictate default judgment against Defendants.
Consequently, a default judgment shall be imposed against Defendants Healthcare Essentials,
Inc., Healthcare Essentials, LLC, Healthcare Essentials Medical Devices, LLC, RT Acquisition,
Inc., Ryan Tennebar, and Colin Tennebar on all counts in KCI’s Third Amended Complaint.7

7

In rendering a default judgment under Rule 37, all “well-pleaded allegations
relating to liability are taken as true.”
(continued...)
27

(1:14CV549)
23. To the extent any findings of fact are construed to be conclusions of law, they are
hereby adopted as such.
III. ORDER ON MOTION TO SHOW CAUSE
In accordance with the Findings of Fact and Conclusions of Law stated herein, the Court
orders that:
1. Default judgment on all counts in Plaintiff’s Third Amended Complaint be entered
against Defendants Healthcare Essentials, Inc., Healthcare Essentials, LLC, Healthcare Essentials
Medical Devices, LLC, RT Acquisition, Inc., Ryan Tennebar, and Colin Tennebar. Defendant
Healthcare Essentials, LLC’s counterclaims (ECF Nos. 10 and 85) are hereby dismissed.
2. Entry of a permanent injunction, as requested by KCI in its Third Amended
Complaint, is warranted, in the form described in the Court’s prior Injunction Orders, specifically
ECF Nos. 162, 218, and 226.
3. KCI is entitled to its reasonable attorney’s fees and costs in prosecuting this action and
defending against Defendants’ former counterclaims.
The Court will conduct a hearing to determine the extent of Plaintiff’s damages and its
reasonable attorney’s fees and costs. The Court will allow the prevailing party to offer evidence
of fees and expenses and allow the nonprevailing party to challenge the reasonableness of them.

7

(...continued)
In re Family Resorts of Am., Inc., 972 F.2d 347 (Table), 1992 WL 174539, at *4 (6th Cir.
July 24, 1992). The judgment amount is determined by the Court, which has the
discretion to hold a hearing or refer the matter to accounting. Id.; see also Fed. R. Civ. P.
55(b)(2).
28

(1:14CV549)
IV. MOTIONS FOR DEFAULT JUDGMENT AS TO TEXAS DEFENDANTS
Plaintiff also seeks relief against Defendants Abel Cortez, Daniel Rader, and Anthony
Estrada for violations of the Ohio Deceptive Trade Practices Act, Ohio Revised Code § 4165.02
(Count One); for conversion under Ohio common law (Count Two); for unfair competition under
Ohio common law (Count Three); for civil theft under Ohio Revised Code § 2307.60 and §
2913.51 (Count Six); for replevin under Ohio law (Count Seven); for violations of the Racketeer
Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1961 et seq. (Count Nine) and
the Ohio Corrupt Activities Act (“OCA”), O.R.C. § 2923.31 et seq. (Count Ten); and for a
permanent injunction (Count Five).8 ECF No. 276.
Pending are Plaintiff’s Motions for Default Judgment Against Defendants Daniel Rader
and Anthony Estrada (ECF No. 355), and Defendant Abel Cortez (ECF No. 359), filed and
served on February 28, 2018 and March 30, 2018, respectively. The Court has been advised,
having read the file and reviewed the applicable law.
Defendants Anthony Estrada and Abel Cortez were duly served with summons and the
Third Amended Complaint (ECF No. 276) by personal service, see ECF Nos. 284 and 287; but,
have failed to plead or otherwise defend. Defendant Daniel Rader was duly served with
summons and the Third Amended Complaint (ECF No. 276) by ordinary mail, see ECF No. 293;
but, also has failed to plead or otherwise defend. On August 3, 2017, the Clerk entered the

8

Pursuant to the Court’s Order (ECF No. 274), Plaintiff filed its Third Amended
Complaint on February 23, 2017, adding new party Defendants Abel Cortez, Daniel
Rader, and Anthony Estrada. ECF No. 276.
29

(1:14CV549)
default of Defendants Anthony Estrada, Abel Cortez, and Daniel Rader pursuant to Fed. R. Civ.
P. 55(a). ECF No. 310.
For good cause shown, Plaintiff’s Motions for Default Judgment Against Defendants
Daniel Rader and Anthony Estrada (ECF No. 355), and Defendant Abel Cortez (ECF No. 359)
on Count One, Count Two, Count Three, Count Five, Count Six, Count Seven, Count Nine, and
Count Ten of the Third Amended Complaint, are granted as to the issue of liability alone.
V.
A hearing shall be held to allow the Court to determine the amount of damages due
Plaintiff. This hearing shall address damages with respect to all Defendants.
The hearing shall be held on July 13, 2018 at 10:00 a.m. Fed. R. Civ. P. 55(b)(2).
Plaintiff’s brief in support of its damages shall be filed not later than 14 days before the hearing.
Any responsive brief shall be filed not later than 7 days prior to the hearing. If necessary,
Plaintiff may reply not later than 3 days before the hearing.

IT IS SO ORDERED.

/s/ Benita Y. Pearson
Benita Y. Pearson
United States District Judge

June 29, 2018
Date

30