The Adam Group, Inc. of Middle Tennessee v. Tunnell et al

Filing 24

INITIAL CASE MANAGEMENT ORDER: Motion to Amend Pleadings due by 12/29/2013. Discovery due by 3/31/2014. Dispositive Motions due by 8/1/2014. Jury Trial set for 12/9/2014 09:00 AM before District Judge Kevin H. Sharp. Pretrial Conference set for 1 1/17/2014 at 1:30 PM before District Judge Kevin H. Sharp. Telephone Conference set for 2/18/2014 at 9:30 AM. Counsel for plaintiff shall initiate this call. Signed by Magistrate Judge John S. Bryant on 5/21/13. (DOCKET TEXT SUMMARY ONLY-ATTORNEYS MUST OPEN THE PDF AND READ THE ORDER.)(dt)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF TENNESSEE
NASHVILLE DIVISION
THE ADAM GROUP, INC. OF MIDDLE
TENNESSEE, d/b/a PLAYMAKER CRM,
Plaintiff,
vs.
DANIEL CHRISTOPHER TUNNELL,
KEAGAN BROWN, ANNIE TUNNELL
McDANIEL, and KARL DUMAS,
Defendants.

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Case No.: 3:13-CV-00258
Judge Sharp
Magistrate Judge Bryant
JURY TRIAL DEMANDED

INITIAL CASE MANAGEMENT ORDER
I.

Status of Service and Responsive Pleadings

Defendants have each been served and have filed a motion to dismiss. Plaintiffs
have filed an opposition to Defendants’ motion to dismiss and Defendants have
sought leave to file a reply in support of their motion to dismiss.
II.

Jurisdiction and Venue

The parties agree that this Court has subject-matter jurisdiction on federal
question and diversity grounds. Defendants contend that venue is improper in
this case as it should have been filed as a compulsory counterclaim in related
litigation. Plaintiff contends that Defendants have waived the defense of
improper venue by failing to assert that defense in their Motion to Dismiss,
pursuant to Fed. R. Civ. P. 12.

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III.

Parties’ Theories of the Case
a. Plaintiff’s Theory of the Case
This case is brought under the Racketeer Influenced and Corrupt

Organizations Act, 18 U.S.C. § 1961 et seq. (“RICO”). PlayMaker seeks damages
and other relief pursuant to the provisions of 18 U.S.C. § 1964(c) based on the
Defendants’ violations of 18 U.S.C. §§ 1962(c) & (d).
RICO provides a civil cause of action for “[a]ny person injured in
his business or property by reason of a violation of Section 1962 of this
chapter.” 18 U. S. C. § 1964(c). Section 1962, in turn, prescribes four
different categories of violations, in subsections (a) through (d),
respectively.

Two such categories of violations are applicable in this

case.
First, Section 1962(c) makes it “unlawful for any person employed
by or associated with any enterprise engaged in, or the activities of which
affect, interstate . . . commerce, to conduct or participate, directly or
indirectly, in the conduct of such enterprise’s affairs through a pattern of
racketeering activity.”1 Second, Section 1962(d) makes it “unlawful for
any person to conspire to violate any of the provisions of subsection (a),
(b) or (c) of this section.” Section 1962(d) thus makes it unlawful for

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Hereinafter, for ease of reference, an enterprise to which the prohibitions of
Section 1962(c) are applicable - i.e., an enterprise engaged in, or the activities
of which affect, interstate commerce - will be referred to as an “interstate
enterprise.” An interstate enterprise whose affairs are conducted, or
participated in, through a pattern of racketeering activity will be referred to as
a “RICO enterprise.”

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persons to conspire, inter alia, to violate Section 1962(c)’s prohibition
against persons employed by or associated with an interstate enterprise
conducting, or participating in, the affairs of the enterprise through a
pattern of racketeering activity.
Thus, a plaintiff can recover against defendants to the extent that it has
been injured by reason of the defendants’: (1) violation of Section 1962(c)’s
prohibition against persons employed by an interstate enterprise conducting,
or participating in the affairs of, the enterprise through a pattern of
racketeering activity; and (2) conspiracy to have persons employed by an
interstate enterprise conduct, or participate in, the affairs of the enterprise
through a pattern of racketeering activity.
Civil RICO claims against the Defendants
In this lawsuit, PlayMaker alleges that each Defendant is liable to
PlayMaker because PlayMaker was injured as a result of that respective
Defendant: (1) while employed by Homecare CRM, LLC (“HCRM”), conducting
HCRM’s affairs through a pattern of racketeering activity, in violation of 18
U.S.C. § 1962(c); and (2) conspiring to have persons employed by HCRM
conduct, and participate in, the affairs of HCRM through a pattern of
racketeering activity, in violation of 18 U.S.C. § 1962(d).
More specifically, PlayMaker contends that HCRM at all relevant times
was an interstate enterprise, namely, a Georgia LLC which was engaged in
interstate commerce and whose activities affected interstate commerce.
Moreover, each Defendant was employed by HCRM in the specific capacities

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alleged in paragraphs 2-5 of the Complaint, respectively. Accordingly, each
Defendant violated: (1) Section 1962(c) to the extent that he or she conducted,
or participated in, the affairs of HCRM through a pattern of racketeering
activity; and (2) Section 1962(d) to the extent that he or she conspired with one
or more other persons to have one or more persons employed by HCRM
conduct, or participate in, the affairs of HCRM through a pattern of
racketeering activity.
1. Defendants’ violations of 18 U.S.C. § 1962(c).
PlayMaker contends that each Defendant violated Section 1962(c) by
personally conducting or participating in HCRM’s affairs through a pattern of
racketeering activity, namely, at least two of the eight specific crimes alleged in
paragraphs 109-146 of the Complaint (the “RICO Predicate Offenses”). Each of
the RICO Predicate Offenses was carried out in furtherance of HCRM’s
business and was otherwise related to HCRM and its affairs. Moreover, the
RICO Predicate Offenses, and indeed any two of them, constituted a pattern of
racketeering activity because each such offense was related to all other RICO
Predicate Offenses (as explained in paragraph 148 of the Complaint) and
amounted to and posed a threat of continued criminal activity (as explained in
Paragraph 149 of the Complaint).
In particular, PlayMaker contends that Defendant Tunnell conducted
and participated directly and indirectly in the affairs of HCRM through
racketeering activity that included all or almost all of the RICO Predicate
Offenses, excluding at most only certain witness tampering in violation of 18

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U.S.C. §§ 1512(b)(2)(A) & (B) as set forth in Paragraphs 141 through 146 of the
Complaint.
PlayMaker

contends

that

Defendant

McDaniel

conducted

and

participated directly and indirectly in the affairs of HCRM through racketeering
activity that included several of the RICO Predicate Offenses, namely at least:
wire fraud in violation of 18 U.S.C. § 1343, as set forth in Paragraphs 110
through 113 of the Complaint; wire fraud in violation of 18 U.S.C. § 1343, as
set forth in Paragraphs 114 through 123 of the Complaint; identity theft in
violation of 18 U.S.C. § 1028(a)(7), as set forth in Paragraphs 124 through 126
of the Complaint; aggravated identity theft in violation of 18 U.S.C. §
1028A(a)(1), as set forth in Paragraphs 127 through 128 of the Complaint;
interstate transmission of PlayMaker’s stolen property in violation of 18 U.S.C.
§ 2314, as set forth in Paragraphs 129 through 132 of the Complaint; and
interstate receipt of PlayMaker’s stolen property in violation of 18 U.S.C. §
2315, as set forth in Paragraphs 133 through 134 of the Complaint.
PlayMaker contends that Defendant Dumas conducted and participated
directly and indirectly in the affairs of HCRM through racketeering activity that
included multiple RICO Predicate Offenses, namely at least: wire fraud in
violation of 18 U.S.C. § 1343, as set forth in Paragraphs 110 through 113 of
the Complaint; wire fraud in violation of 18 U.S.C. § 1343, as set forth in
Paragraphs 114 through 123 of the Complaint; and certain witness tampering
in violation of 18 U.S.C. §§ 1512(b)(2)(A) & (B), as set forth in Paragraphs 141
through 146 of the Complaint.

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PlayMaker contends that Defendant Brown conducted and participated
directly and indirectly in the affairs of HCRM through racketeering activity that
included several of the RICO Predicate Offenses, namely at least: wire fraud in
violation of 18 U.S.C. § 1343, as set forth in Paragraphs 110 through 113 of
the Complaint; wire fraud in violation of 18 U.S.C. § 1343, as set forth in
Paragraphs 114 through 123 of the Complaint; identity theft in violation of 18
U.S.C. § 1028(a)(7), as set forth in Paragraphs 124 through 126 of the
Complaint; aggravated identity theft in violation of 18 U.S.C. § 1028A(a)(1), as
set forth in Paragraphs 127 through 128 of the Complaint; interstate
transmission of PlayMaker’s stolen property in violation of 18 U.S.C. § 2314, as
set forth in Paragraphs 129 through 132 of the Complaint; and interstate
receipt of PlayMaker’s stolen property in violation of 18 U.S.C. § 2315, as set
forth in Paragraphs 133 through 134 of the Complaint.
2.

Defendants’ violations of 18 U.S.C. § 1962(d).

PlayMaker also contends that all Defendants violated Section 1962(d) by
joining in a single conspiracy to conduct the affairs of HCRM through a pattern
of racketeering activity. That is, each Defendant tacitly or expressly agreed with
one or more co-defendants that Section 1962(c) would be violated in that
persons employed by and associated with HCRM would conduct the affairs of
HCRM through what amounts to a pattern of racketeering activity. Each
Defendant did so by tacitly or expressly joining a common agreement with
other Defendants that, among other things: (1) the affairs of HCRM would be
conducted by HCRM employees through the commission of two or more acts

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that each constituted racketeering activity as defined by 18 U.S.C. § 1961(1)
(“racketeering acts”) and which collectively constituted a pattern of racketeering
activity; and (2) two or more racketeering acts would be committed by at least
one conspirator.
In particular, each Defendant agreed with at least one other person
(including at least one co-defendant) that one or more HCRM employees would
conduct the affairs of HCRM through the commission of racketeering acts –
including at least two of the RICO Predicate Offenses – that collectively
constituted a pattern of racketeering activity. Each Defendant also agreed with
at least one other person (including at least one co-defendant) that at least one
conspirator would commit at least two racketeering acts, including at least two
of the RICO Predicate Offenses.
3.

Playmaker’s injury as a result of Defendants’ violation of 18 §§
1962(c) & (d).

As noted above, PlayMaker has a right of action against Defendants
under 18 U.S.C. § 1964(c) if it was injured as a result of Defendants’ violations
of Section 1962(c) and/or Section 1962(d). This does not mean that the Plaintiff
must show injury resulting from the (illegal) conducting of the affairs of the
RICO enterprise that constituted the Section 1962(c) violation, or from the
conspiracy to illegally conduct the affairs of the RICO enterprise that
constituted the Section 1962(d) violation. Rather, as the U.S. Supreme Court
has noted, to recover based on defendants’ violations of either Section 1962(c)
or Section 1962(d), a plaintiff must show injury resulting from racketeering acts

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that formed the pattern of racketeering underlying the Section 1962(c) or
Section 1962(d) violation. See Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 497
(1985) (relating to Section 1962(c)); Beck v. Prupis, 529 U.S. 494, 507 (2000)
(relating to Section 1962(d)).
In the present case, PlayMaker has been directly and proximately injured
as a result of some or all of the RICO Predicate Offenses. Accordingly,
PlayMaker is entitled to relief under Section 1964(c), including treble damages
and a reasonable attorney’s fee, in amounts to be proven at trial.
b. Defendants’ Theory of the Case
As a threshold matter, Defendants have pending a motion to dismiss,
based upon two arguments: (1) that the claims are due to be dismissed
because they are compulsory counterclaims in an action pending in the United
States District Court for the Northern District of Georgia, styled Homecare
CRM, LLC v. The Adam Group, Inc, et al., Civil Action No. 1:12:cv-01958 (“the
Georgia Action”); and (2) that a RICO claim has not properly been alleged
because there has been no allegation that the RICO persons who are
defendants are separate, and not part of the “enterprise” pursuant to 18 U.S.C.
§1962 (c).

To the extent that the Defendants’ argument that these claims are

compulsory counterclaims in the Georgia Action, and therefore due to be
dismissed, are arguments relating to this court’s subject matter jurisdiction or
venue, Defendants’ theory of the case is that this court has no jurisdiction, and
the venue for this action is improper.

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Defendants deny each of the material allegations in the Complaint. More
specifically, Defendants deny that they have: (a) committed any predicate acts
necessary to prove RICO liability that have been alleged in the case; (b)
Defendants deny that they are separate from HCRM, in terms of RICO analysis,
or that, substantially, they participated in the affairs of HCRM through any
pattern of wire fraud, 18 U.S.C. §1343; identity theft, 18 U.S.C. §1028;
transmission of stolen property, 18 U.S.C. §2314; receipt of stolen property, 18
U.S.C. §2315; or witness tampering, 18 U.S.C. §1512.
Defendants contend that they have not conspired to conduct the affairs
of HCRM through a pattern of racketeering activity, and that there has been no
agreement, tacit or otherwise, to do so. Moreover, HCRM contends that
PlayMaker can prove no damage or injury as a result of its action. Defendants
contend that PlayMaker will not be able to show: (1) any lost revenue as the
result of any action by Defendants; (2) any lost sales as the result of any
actions by Defendants; or even (3) any lost business opportunity as the result
of any actions by Defendants. In short, PlayMaker has not suffered any
compensable damages as the result of any action by any Defendants.
IV.

Identification of the Issues

The parties do not dispute personal jurisdiction or subject matter jurisdiction.
All other matters remain in dispute.

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V.

Counterclaims, Cross-Claims and Third Party Claims

The parties cannot anticipate at this time whether any counterclaims, crossclaims or third party claims will be filed.
VI.

Initial Disclosures and Staging of Discovery
a. Rule 26(a)(1) Disclosures: Initial Disclosures shall be served no
later

than

fourteen

days

following

the

case

management

conference.
b. Close of Discovery: All discovery will be completed no later than
March 31, 2014. All written discovery shall be served no later than
February 28, 2014.
c. Expert Discovery: Expert witness disclosures under Federal Rules
of Civil Procedure 26 will be made by Plaintiff no later than March
28, 2014, and by Defendants by April 28, 2014. Plaintiff shall
disclose rebuttal expert witnesses, if any, by not later than May 12,
2014. All expert discovery, including but not limited to depositions,
will be completed by June 13, 2014.
d. Electronic Discovery: The Parties agree to attempt to enter into an
agreement concerning the discovery of Electronically Stored
Information

(“ESI”)

within

fourteen

days

after

the

case

management conference. If no agreement is reached, the parties
will request a conference on unresolved issues with the Court.
e. Discovery Disputes: No motions related to discovery or for a
protective order shall be filed until a discovery/protective order

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dispute conference has taken place in a good faith effort to resolve
the dispute.
VII.

Amendments to Pleadings
The deadline for filing motions to amend the pleadings or add parties is
December 29, 2013.

VIII.

Dispositive Motions
Dispositive motions will be filed no later than August 1, 2014. Responses
to dispositive motions shall be filed within 21 days after service. Briefs
shall not exceed 20 pages without leave of Court. Optional replies,
limited to five pages, shall be filed within fourteen days after service of
the response. If dispositive motions are filed early, the response and reply
dates are moved up accordingly.

IX.

Alternative Dispute Resolution
On or before December 1, 2013 counsel and clients will discuss whether
this case can be resolved without further discovery proceedings.

X.

Consent to trial before the Magistrate Judge
The parties do not consent.

XI.

XII.

Subsequent Case Management Conferences.
A telephone conference to discuss case progress is set for February 18, 2014,
at 9:30 a.m. Counsel for plaintiff shall initiate this call.
Jury Trial Date.
Jury trial is set to begin on December 9, 2014, at 9:00 a.m. A pretrial
conference shall be held on November 17, 2014, at 1:30 p.m. before Judge Sharp.
Trial is expected to take ten (10) days.

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It is SO ORDERED:
s/ John S. Bryant
______________________________
John S. Bryant, U.S. Magistrate Judge
Respectfully submitted,
/s/ Paige Waldrop Mills
Eli J. Richardson
Paige Waldrop Mills
Joshua R. Denton
Bass, Berry & Sims PLC
150 Third Avenue South
Suite 2800
Nashville, TN 37201
Telephone: [phone]
Facsimile: [phone]
[e-mail]
[e-mail]
[e-mail]
Attorneys for Plaintiff The Adam Group, Inc.,
d/b/a PlayMaker CRM
___________________________
Brian M. Clark
Craig L. Lowell
WIGGINS CHILDS QUINN & PANTAZIS
The Kress Building
301 19th Street North
Birmingham, AL 35203
David M. Smythe
SMYTHE & HUFF
144 Second Avenue N.
The Pilcher Building
Suite 333
Nashville, TN 37201
Attorneys for Defendants

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CERTIFICATE OF SERVICE
The undersigned hereby certifies that on the 8th day of May, 2013, a
copy of the foregoing was filed electronically. Notice of this filing will be sent by
operation of the Court’s electronic filing system to the following parties as
indicated on the electronic filing receipt. Parties may access this filing through
the Court’s electronic filing system.

Brian M. Clark
Craig L. Lowell
WIGGINS CHILDS
QUINN & PANTAZIS
The Kress Building
301 19th Street North
Birmingham, AL 35203
David M. Smythe
SMYTHE & HUFF
144 Second Avenue N.
The Pilcher Building
Suite 333
Nashville, TN 37201
Attorneys for Defendants
/s/ Paige Waldrop Mills

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