American Trails et al v. Sims et al

Filing 94

MEMORANDUM DECISION denying 78 Plaintiff's Motion to Strike Defendants' Pleadings ; denying 85 Plaintiff's Motion Re: the Status Quo. Signed by Judge Paul Warner on 1/13/12. (jlw) Modified on 1/13/2012 by correcting judge who signed order (jlw).

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH
CENTRAL DIVISION

AMERICAN TRAILS COMPANY, a
joint venture; AMERICAN TRAILS
VENTURES GROUP, LLC, a limited
liability company; and DARWIN KADE
CLINGER;

MEMORANDUM DECISION AND
ORDER

Plaintiffs,
Case No. 2:09cv1113
v.
JEFFERY S. SIMS; ACO
ENTERPRISES, INC., a corporation;
AMERICAN TRAIL VENTURES, INC.,
a corporation; and ROBERT J. SIMS,

District Judge Dee Benson

Defendants.

Magistrate Judge Paul M. Warner

This matter was referred to Magistrate Judge Paul M. Warner by District Judge Dee
Benson pursuant to 28 U.S.C. § 636(b)(1)(A).1 Before the court are (1) American Trails
Company, American Trails Ventures Group, LLC, and Darwin Kade Clinger’s (“Clinger”)
(collectively, “Plaintiffs”) motion for an order striking Jeffery S. Sims (“Jeffery”), ACO
Enterprises, Inc., American Trail Ventures, Inc., and Robert J. Sims’s (collectively,
“Defendants”) answer and entering Defendants’ default;2 and (2) Plaintiffs’ motion for an order

1

See docket no. 60.

2

See docket no. 78.

requiring Defendants to maintain the status quo.3 The court has carefully reviewed the motions
and memoranda submitted by the parties. Pursuant to civil rule 7-1(f) of the United States
District Court for the District of Utah Rules of Practice, the court elects to determine the motions
on the basis of the written memoranda and finds that oral argument would not be helpful or
necessary. See DUCivR 7-1(f).
(1) Plaintiffs’ Motion to Strike Defendants’ Pleadings
Plaintiffs move this court for an order striking Defendants’ answer to Plaintiffs’ second
amended complaint and entering default against Defendants. Plaintiffs argue that the record
before the court “establishes that Defendants have willfully engaged in an unconscionable and
fraudulent course of conduct herein designed to improperly influence the Court’s decision with
regard to the most basic and fundamental issues and merits of this case.”4 Specifically, Plaintiffs
assert that Defendants’ denial of the allegations set forth in paragraphs 10 through 17 of the
second amended complaint “notwithstanding their knowledge, as shown by the record herein, of
the actual terms and conditions of the [joint venture between the parties] is inexcusable,
perjurious, contemptuous, fraudulent and in egregious bad faith.”5 Plaintiffs further contend that
their version of the terms and conditions of the joint venture is “conclusively established by

3

See docket no. 85.

4

Docket no. 78 at 1-2.

5

Docket no. 79 at 9.
2

[Jeffery’s] voluntary confirmation of the same as re[f]lected by the transcript[s]” of meetings
with Jeffery and personally transcribed by Clinger.6
In response, Defendants argue that their answer complies with rules 8 and 11 of the
Federal Rules of Civil Procedure in that they merely denied the allegations set forth in
paragraphs 10 through 17 based on their understanding of the facts. Defendants assert that a
meeting of the minds regarding the joint venture never occurred and that they set forth their
version of the facts in paragraphs 14 through 22 of their answer and counterclaim. Defendants
contend that through those pleadings, they have attempted “to inform the parties and the court of
their position so that subsequent discovery and proceedings could follow in an orderly fashion,”7
rather than perpetrate a fraud on the court or obstruct justice, as alleged by Plaintiffs.
Rule 8(b) of the Federal Rules of Civil Procedure provides the rules for pleading
defenses, admissions, and denials. See Fed. R. Civ. P. 8(b). Specifically, it states in relevant
part:
(1) In General. In responding to a pleading, a party must:
(A) state in short and plain terms its defenses to each claim asserted
against it; and
(B) admit or deny the allegations asserted against it by an opposing party.
(2) Denials—Responding to the Substance. A denial must fairly respond to the
substance of the allegation.
(3) General and Specific Denials. A party that intends in good faith to deny all the
allegations of a pleading—including the jurisdictional grounds—may do so by a
general denial. A party that does not intend to deny all the allegations must either
specifically deny designated allegations or generally deny all except those
specifically admitted.

6

Docket no. 83 at 4.

7

Docket no. 80 at 5.
3

Id. While “it is appropriate in some situations to strike a pleading for gross violation of Rule 8
. . . or when the material contained in the pleading is scandalous, immaterial or redundant,” the
rules “are designed to avoid basing decisions on the merits on pleading technicalities.” Tanner
v. Johnston, No. 2:11-cv-28 TS, 2001 WL 6019845, at *2 (D. Utah Dec. 2, 2011) (quotations
and citations omitted).
The court cannot conclude that Defendants’ answer is scandalous, immaterial, or
redundant or that it warrants the extreme sanction sought by Plaintiffs. As Defendants have
admitted, they probably “could have somehow parsed out a more specific answer to Paragraphs
10 through 17.”8 However, Defendants’ simple denial of those paragraphs does not constitute a
“fraud on the Court” nor is it a “scheme to improperly influence the Court.”9 Plaintiffs are
convinced that the evidence before the court conclusively disproves Defendants’ denials, and
they are welcome to seek a resolution of the matter on the merits through an appropriate
dispositive motion. “The Court is not persuaded, however, that the intent of the Federal Rules,
and more specifically [rule 8], is to provide for speedy resolution of claims through default
judgment.” Id. at *3. Accordingly, Plaintiffs’ motion to strike is DENIED.

8

Docket no. 80 at 3.

9

Docket no. 79 at 9.
4

(2) Plaintiffs’ Motion Re: the Status Quo
Plaintiffs seek an order requiring Defendants to maintain the status quo. Specifically,
Plaintiffs move the court to:
1. Maintain the status quo with regard to the business operations (“Business
Operations”) they have heretofore been, are now and may hereafter be or become,
engaged in related to the promotion and marketing of luggage, bags, packs, boxes,
cargo containers, attachments and accessories for use with all terrain vehicles,
motorcycles, snowmobiles and other sports, recreational and outdoor related
equipment.
2. Maintain the ownership of the American Trails trademark, as presently
registered in the name of American Trails Ventures, Inc.
3. Not take any action directed toward changing in any significant way the
aforementioned Business Operations; and
4. Not assign, transfer, convey, encumber or damage all or any portion of said
Business Operations or any of the assets, rights, or existing or prospective
contractual relations related thereto.10
Defendants assert that Plaintiffs are, in essence, seeking a preliminary injunction similar
to the one Judge Benson denied on July 22, 2010.11 This court agrees. As such, Plaintiffs’
motion for an order requiring Defendants to maintain the status quo is DENIED.
In summary, IT IS HEREBY ORDERED that:
(1)

Plaintiffs’ motion to strike Defendants’ amended answer and counterclaim and
enter default12 is DENIED, and

10

Docket no. 85 at 1-2.

11

See docket no. 57.

12

See docket no. 78.
5

(2)

Plaintiffs’ motion for an order requiring Defendants to maintain the status quo13 is
DENIED.

IT IS SO ORDERED.
DATED this 13th day of January, 2012.
BY THE COURT:

PAUL M. WARNER
United States Magistrate Judge

13

See docket no. 85.