Incentive Capital v. Camelot Entertainment Group et al

Filing 117

OBJECTIONS to 116 Attorney Planning Meeting / Defendant Peter Jarowey's Objections to Plaintiff's Proposed Attorneys' Planning Meeting Report filed by Peter Jarowey. (Shapiro, David)

Marc E. Kasowitz
David J. Shapiro
KASOWITZ, BENSON, TORRES
& FRIEDMAN LLP
1633 Broadway
New York, New York 10019
Telephone: [phone]
Wayne G. Petty (#2596)
MOYLE & DRAPER, P.C.
175 East 400 South, No. 900
Salt Lake City, Utah 84111
Telephone: [phone]
Attorneys for Defendant Peter Jarowey

UNITED STATES DISTRICT COURT
DISTICT OF UTAH, CENTRAL DIVISION

INCENTIVE CAPITAL, LLC, a Utah Limited
Liability Company,
Plaintiff,
v.
CAMELOT ENTERTAINMENT GROUP,
INC., a Delaware Corporation; CAMELOT
FILM GROUP, INC., a Nevada Corporation;
CAMELOT DISTRIBUTION GROUP, INC., a
Nevada Corporation, ROBERT P. ATWELL,
an individual; JAMIE R. THOMPSON, an
individual; STEVEN ISTOCK, an individual;
TED BAER, an individual; PETER
JAROWEY, an individual,
Defendants.

DEFENDANT PETER JAROWEY’S
OBJECTIONS TO PLAINTIFF’S
PROPOSED ATTORNEYS’ PLANNING
MEETING REPORT
Civil No. 2:11-CV-00288
Judge Clark Waddoups

Defendant Peter Jarowey (“Jarowey”), by and through his attorneys, respectfully
submits his objections to the “Proposed Attorneys’ Planning Meeting Report” submitted
by Plaintiff Incentive Capital, LLC (“Incentive”) on October 10, 2011 (the “Proposed
Report”) (Docket No. 116).
Summary of Objections
Pursuant to the Proposed Report, Incentive has requested that the Court enter an
order forcing Jarowey to participate in expensive and time-consuming discovery when (i)
the parties have settled, (ii) Jarowey has not been served, (iii) Jarowey is not a principal
of the corporate defendant, and (iv) dispositive motions are pending. Under these
circumstances, entry of an order authorizing the discovery set forth in the Proposed
Report would be oppressive, unduly burdensome, and an inefficient use of the parties’
resources.1
Argument
Incentive’s request for an order authorizing discovery against Jarowey as set forth
in the Proposed Report should be denied for the following reasons:
1. The Parties Have Settled.
Counsel for Camelot (with the express authority of co-defendants Ted Baer
(“Baer”) and Jarowey), and counsel for Incentive, settled this matter by agreeing to the
essential business terms of a deal. Under Utah law, that agreement to settle is binding on
Incentive. A finalized, formal and detailed “settlement agreement” is not required.
McKelvey v. Hamilton, 211 P.3d 390 (Utah Ct. App. 2009) (letters between the parties'
attorneys prove that the parties had entered into an enforceable settlement agreement).
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Attempts to negotiate a Proposed Report, which would have taken these facts into consideration, were
unsuccessful.

2

The agreement to settle can only be set aside if Incentive can prove that its counsel (Mr.
Pia) did not have the authority to settle on behalf of his client (Incentive). See, e.g.,
Johnson v. Utah State Tax Comm'n, 2000 U.S. App. LEXIS 23175, 8-9 (10th Cir. 2000)
(“Once it is shown that an attorney has entered into an agreement to settle a case, a party
who denies that the attorney was authorized to enter into the settlement has the burden to
prove that authorization was not given.") (quoting Turner v. Burlington N. R.R., 771 F.2d
341, 345-46 (8th Cir. 1985) and applying Utah law).2
Because the parties have entered into an enforceable settlement agreement,
forcing Jarowey to expend time and money participating in discovery would be
inappropriate.
2. Jarowey Has Not Been Served, And His Motion To Quash Is Pending.
On May 31, 2011, Jarowey moved to quash the service of the summons and
complaint based on the undisputed fact that Incentive’s counsel had served Jarowey’s
son, instead of Jarowey. (Docket No. 47). Incentive conceded the error via a
“Stipulation.” (Docket No. 86). Incentive then tried again, and, in violation of
Massachusetts law, failed to properly serve Jarowey. (Docket No. 72). Therefore, on
August 22, Jarowey moved to quash service based on, among other things, the fact that
the Process Server filed a fraudulent affidavit, asserting that he personally served
Jarowey at this home, which is impossible because Jarowey was hundreds of miles away
that day. (Docket Nos. 95, 96 and 97). Incentive served its opposition to the motion on

2

We understand that Camelot and Incentive may soon move the Court for an order staying the litigation.
Theses objections are necessary, however, to protect Jarowey’s interests should that motion, for whatever
reason, not be made.

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September 6 (Docket No. 106), and Jarowey’s reply is due on October 28 (Docket No.
115).
Incentive’s Proposed Report would require Jarowey to exchange his Rule 26(a)
Initial Disclosures by November 9, only days after his reply papers are due and well in
advance of a ruling by the Court on the motion to quash. An order endorsing the
Proposed Report would require Jarowey to sit for a deposition, answer up to 25
interrogatories and produce documents at a time when he is not yet a proper party to the
action. As a matter of federal law, persons who have not been served, and who are not
parties to a lawsuit, are not subject to discovery in the pending action. They must be
subpoenaed for information: nonparties are served with subpoenas, and only parties are
served with notices. Fed.R.Civ.P 45 (outlining procedures for issuing subpoenas on nonparties), 26 (requiring parties to provide initial disclosures), 33(a) (“a party may serve on
any other party no more than 25 written interrogatories”) (emphasis added).
Until Jarowey is a party to this case, he should not be subject to the discovery
demands of the Proposed Report.
3. Jarowey Is An Independent Contractor, Not A Principle Of Camelot.
It is undisputed that Jarowey was never an employee of the defendant corporation
and he is not a signatory to any of the loan-related documents at issue in this action. See
Amended Complaint (Docket No. 2). He is not a public corporation that trades shares on
the open market with deep pockets for protracted discovery. He never should have been
sued in the first place. To force him to provide initial disclosures and documents in these
circumstances would amount to nothing more than an oppressive tactic by Incentive.

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4. Baer’s Motion To Dismiss Is Pending And Jarowey Is In The
Same Position As Baer Vis-à-Vis This Court’s Lack Of Jurisdiction
Over Him.
On May 16, 2011, based on his lack of any meaningful contact with the State of
Utah, co-defendant and fellow independent consultant Baer moved to dismiss the
Amended Complaint for lack of jurisdiction. (Docket No. 42). That motion has been
fully briefed and is sub judice. If Baer’s motion is granted, and if it is found that Jarowey
has been served, then Jarowey will immediately move for the same relief because
Jarowey – like Baer – had no meaningful contacts with Utah. It would, therefore, be
oppressive and unduly burdensome to force Jarowey to participate in discovery when, in
the not-too-distant-future, it may very well be determined that Jarowey is not a party to
this case.
The wiser course, it is respectfully submitted, is to wait until the dispositive
motions have concluded. And this Court has the power, under its discretionary authority,
to do just that. Dochterman v. Res. Realizations, 2003 U.S. App. LEXIS 3442 (10th Cir.
2003) (magistrate judge did not abuse his discretion in staying discovery pending a ruling
on a dismissal motion).

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CONCLUSION
For the foregoing reasons, Jarowey respectfully objects to the Proposed Report
and Incentive’s request that the Court enter an order authorizing the discovery as set forth
in that report.
Dated: October 12, 2011
Respectfully submitted,
KASOWITZ, BENSON, TORRES
& FRIEDMAN LLP
Marc E. Kasowitz
David J. Shapiro
and
MOYLE & DRAPER, P.C.

By: /s/ David J. Shapiro
David J. Shapiro
Attorneys for Defendant Peter
Jarowey

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Certificate of Service
I hereby certify that on this 12th day of October, 2011, I caused a true and correct
copy of the foregoing PETER JAROWEY’S OBJECTIONS TO PLAINTIFF’S
PROPOSED ATTORNEYS’ PLANNING MEETING REPORT as indicated upon
the following:

Jonathan M. Levitan, Esq.
LAW OFFICES OF JONATHAN MARK LEVITAN
12400 Wilshire Blvd., Suite 1300
Los Angeles, CA 90025

Sent via U.S. Mail
Sent via EMail
Sent via CMECF Filing

Joseph G. Pia, Esq.
PIA ANDERSON DORIUS REYNARD & MOSS LLC
222 South Main Street, Suite 1800
Salt Lake City, UT 84101

Sent via U.S. Mail
Sent via EMail
Sent via CMECF Filing

Michael O’Brien
VANCOTT BAGLEY
36 S. State St., Suite 1900
Salt Lake City, UT 84111

Sent via U.S. Mail
Sent via EMail
Sent via CMECF Filing

Dennis R James, Esq.
MORGAN MINNOCK RICE & JAMES
136 S MAIN STE 800
Salt Lake City, UT 84101

Sent via U.S. Mail
Sent via EMail
Sent via CMECF Filing

/s/ David J. Shapiro

David J. Shapiro
Attorney for Defendant Peter
Jarowey

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