Blacks in Technology International v. Blacks in Technology LLC et al

Filing 309

MEMORANDUM OPINION AND ORDER: The Court GRANTS Schultz's 292 motion for leave to file answer, SETS a deadline for fourteen days from this Order for a specific discovery request from BIT International on Schultz's new answer, and DENIES WITHOUT PREJUDICE Schultz's 276 motion for summary judgment. (Ordered by Judge Brantley Starr on 2/5/2024) (cfk)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
BLACKS IN TECHNOLOGY
INTERNATIONAL,

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Plaintiff,
v.
GREGORY GREENLEE, DENNIS
SCHULTZ, AND BLACKS IN
TECHNOLOGY, LLC,
Defendants.

Civil Action No. 3:20-CV-3008-X

MEMORANDUM OPINION AND ORDER
Before the Court are Defendant Dennis Schultz’s motion for leave to file
answers (Doc. 292) and motion for summary judgment (Doc. 276). For the reasons
below, the Court GRANTS the motion for leave to file answers, SETS a deadline for
fourteen days from this Order for a limited and specific discovery request from
Plaintiff Blacks in Technology International’s (“BIT International”) on Schultz’s new
answer to BIT International’s second amended complaint, and DENIES WITHOUT
PREJUDICE the summary-judgment motion.
I. Background
Last summer, the Court handled a good share of the “litany of claims and
counterclaims” in this case. 1 Relevant here, the Court granted summary judgment
to Defendant Gregory Greenlee on BIT International’s tortious interference with

1

Doc. 260.

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contract claim. In its opinion, the Court acknowledged that BIT International still
maintained two claims against Schultz (tortious interference and breach of contract). 2
Having not heard from Schultz in a while, the Court ordered him to file a status
report in fourteen days or the Court would order BIT International to move for default
judgment against Schultz. 3 In the status report, Schultz told the Court he would seek
leave to file a summary judgment motion on BIT International’s two remaining
claims against him. 4 Schultz claimed that it was a fine time to file a summaryjudgment motion because “discovery has closed and remains closed.” 5 The Court
granted him leave, and Schultz filed it. Schultz not only sought summary judgment
on the two remaining claims against him, he raised a volunteer immunity defense for
the first time. 6 Schultz had never answered or otherwise filed responsive pleading to
BIT International’s second amended complaint 7 or to BIT Texas’s and Blacks United
in Leading Technology International (“BUiLT”)’s third-party counterclaims. 8 BIT
International raised this point in its response to Schultz’s summary-judgment
motion, 9 though it never sought default judgment against Schultz. Schultz then filed
a motion for leave to file a (very late) answer. 10

2

Id. at 2.

3

Doc. 266.

4

Doc. 271.

5

Id. at 2.

6

Doc. 277.

7

Doc. 46 (filed on July 12, 2021).

8

Doc. 232 (filed on September 14, 2022).

9

Doc. 287.

10

Doc. 292.

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This case has gone on for over three years. Discovery has been closed and
dispositive motions have been filed. But here comes Schultz with an answer to BIT
International’s second amended complaint. 11 Alas, the “procedural purgatory” must
continue. 12
II. Legal Standard
The Court looks at four factors in determining whether to modify a scheduling
order: (1) “the explanation for the failure to [timely answer]; (2) the importance of the
[answer]; (3) potential prejudice in allowing the [answer]; and (4) the availability of
a continuance to cure such prejudice.” 13
As to the first factor, Schultz claims that when BIT International filed its
second amended complaint back in July 2021, it was a few months before Schultz’s
counsel appeared in the case. 14 Schultz further seeks to justify the failure to answer
on the “extensive pleadings and unnecessary complexity injected into this case by the
BIT Int’l [p]arties.” 15 The Court agrees. Just last month in this case, the Court
granted BIT LLC and Greenlee’s motion to file a late answer to other claims “given
the hyperactivity of the docket.” 16 For the second factor, Schultz’s answers are
important, since they would be his only answers to BIT International’s second

To his motion for leave to file answer, Schultz also attached an answer to BIT Texas’s and
BUiLT’s second amended counterclaims. Doc. 292.
11

12

Doc. 260 at 1.

13

S&W Enters., L.L.C. v. SouthTrust Bank of Alabama, NA, 315 F.3d 533, 536 (5th Cir. 2003).

14

Doc. 292 at 2.

15

Id.

16

Doc. 306 at 4.

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amended complaint and BIT Texas’s and BUiLT’s second amended counterclaims—
raising a new defense too. As to prejudice, BIT International claims it would suffer
prejudice because discovery has ended and dispositive motions have been filed. 17 The
Court agrees with BIT International that this case has gone on for quite some time.
Schultz himself even acknowledged that discovery was closed. 18 Over two years have
passed since BIT International filed its second amended complaint against him, and
discovery has wrapped up.
But the Court makes two observations on potential prejudice to BIT
International. First, the Court notes that BIT International never moved for default
against Schultz. It was the Court to notice Schultz’s silence on the docket when it
ordered Schultz to file a status report or else it would order BIT International to move
for default judgment against him. 19 BIT International delayed just like Schultz did.
And second, even in BIT International’s response to Schultz’s summary-judgment
motion, it sought more discovery itself to “prove up [its] damages.” 20

BIT

International can’t make both arguments: that it would be prejudicial to allow the
case to continue and reopen discovery for a late answer on the one hand, and, that
discovery needs to be reopened to beef up its own claims on the other. So this brings
us to the fourth factor, whether there’s a way to cure the prejudice. The Court doesn’t
find prejudice here. The Court does find that BIT International should have the

17

Doc. 305 at 4–5.

18

Doc. 271 at 2.

19

Doc. 266.

20

Doc. 287 at 10.

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chance to request limited and specific discovery regarding Schultz’s new answer
only—no additional discovery.
In short, the factors weigh in favor of modifying the scheduling order and
allowing Schultz’s late answers. Now that Schultz will have new responsive pleading,
should BIT International seek limited and specific discovery on Schultz’s new answer,
the Court will allow such a request within fourteen days. 21 The Court is reluctant to
let a party seek more discovery without telling the Court exactly what it needs.
The Court accordingly GRANTS Schultz’s motion for leave to file answers to
BIT International’s second amended complaint and BIT Texas’s and BUiLT’s thirdparty counterclaims.

A limited and specific request for discovery on Schultz’s

answers is due in fourteen days from the date of this Order, if in fact BIT
International seeks such discovery. And since the Court is allowing a discovery
request on a new defense, ruling on Schultz’s motion for summary judgment now
would be premature.

The Court DENIES WITHOUT PREJUDICE Schultz’s

summary-judgment motion.
III. Conclusion
For the foregoing reasons, the Court GRANTS Schultz’s motion for leave to
file answer, SETS a deadline for fourteen days from this Order for a specific discovery
request from BIT International on Schultz’s new answer, and DENIES WITHOUT
PREJUDICE Schultz’s motion for summary judgment.

21 BIT International may not end up seeking discovery on this point since it addressed Schultz’s
volunteer immunity defense on the merits in its response to Schultz’s motion for summary judgment,
though the defense had never been pled.

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IT IS SO ORDERED this 5th day of February, 2024.

BRANTLEY STARR
UNITED STATES DISTRICT JUDGE

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