Celtig v. Patey et al

Filing 192

ORDER ADOPTING REPORT AND RECOMMENDATIONS re 183 Report and Recommendations re 141 Motion for Default Judgment. Signed by Judge Jill N. Parrish on 9/19/2019. (jds)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH
CELTIG, LLC, a Tennessee limited liability company;
Plaintiff,

ORDER ADOPTING REPORT
AND RECOMMENDATION

v.
AARON A. PATEY, an individual; EVERGREEN Case No. 2:17-cv-01086
STRATEGIES, LLC, a Nevada limited liability
company; PSD INTERNATIONAL, LLC, a Utah District Judge Jill N. Parrish
limited liability company; and RELAY ADVANCED
MATERIALS, INC., a Delaware Corporation;
Defendants.

EVERGREEN STRATEGIES, LLC, a Nevada
limited liability company; and RELAY ADVANCED
MATERIALS, INC., a Delaware Corporation;
Counterclaimants,
v.
CELTIG, LLC, a Tennessee limited liability company;
Counterclaim-Defendant.

EVERGREEN STRATEGIES, LLC, a Nevada
limited liability company; and RELAY ADVANCED
MATERIALS, INC., a Delaware Corporation;
Counterclaim and
Third-Party Plaintiffs,
v.
BRENT BENJAMIN WOODSON; PHILLIP COX;
MICHAEL GUNDERSON; DAVID NIELSON;
IMPEL SALES, LLC, a Utah Limited Liability
Company; and UTAH LAKE LEGACY COALITION
LLC, a Utah limited liability company;
Third-Party Defendants.

Plaintiff Celtig, LLC, brought this lawsuit against Defendants Aaron Patey, Evergreen
Strategies, LLC, PSD International, LLC, and Relay Advanced Materials, Inc. (collectively
“Defendants”) seeking damages and declaratory relief for alleged breach of contract. ECF No. 17.
Defendants filed counterclaims against Plaintiff and third-party claims against two sets of ThirdParty Defendants: Utah Lake Legacy Coalition, LLC, Brent Benjamin Woodson, and David
Nielson (collectively “ULLC Third-Party Defendants”), and Impel Sales, LLC, Phillip Cox, and
Michael Gunderson (collectively “Impel Third-Party Defendants”). ECF No. 22. The court
referred this matter to Magistrate Judge Evelyn J. Furse pursuant to 28 U.S.C. § 636(b)(1)(A). ECF
No. 9. After a series of discovery disputes, including Defendants failing to appear at properly
noticed depositions in November 2018 and January 2019, Plaintiffs filed a “motion for entry of
default judgment against all defendants and counterclaimants” (the “motion”) on February 14,
2019. ECF No. 141. Defendants filed a response in opposition to the motion on February 28, 2019,
and Plaintiffs replied on March 14, 2019. ECF Nos. 149, 162. During this time, both ULLC ThirdParty Defendants and Impel Third-Party Defendants also filed motions for entry of default
judgment against Defendants, and Judge Furse issued two Reports and Recommendations granting
the motions by striking all of Defendants’ third-party claims. ECF Nos. 185, 186. This court
adopted the Reports and Recommendations in full on September 9, 2019. ECF. No. 190.
After reviewing the parties’ briefing and holding oral argument on June 25, 2019, Judge
Furse issued a Report and Recommendation advising this court to grant in part and deny in part
the Plaintiff’s motion for default judgment. ECF No. 183. The report recommends imposing
sanctions on Defendants by “striking Evergreen and Relay’s counterclaims against Celtig,
prohibiting the Patey Defendants from putting Mr. Patey and Mr. Davidson on the stand, and
barring the Patey Defendants from presenting any evidence they have not yet produced in

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discovery.” Id. at 2. The report also specified that, pursuant to Fed. R. Civ. P. 72(b)(2), the parties
were to file any objections with the court within fourteen (14) days of service. Id. at 20. The time
to object expired on September 3, 2019, and the court has received no objections. Defendants’
failure to object waived any argument that the Report and Recommendation was in error. See
United States v. One Parcel of Real Prop., 73 F.3d 1057, 1060 (10th Cir. 1996). But the court
notes that it need not apply this waiver rule as a procedural bar if “the interests of justice so dictate.”
Id. (quoting Moore v. United States, 950 F.2d 656, 659 (10th Cir. 1991)).
Having reviewed the Report and Recommendation and its conclusion that the Plaintiff’s
motion should be granted in part and denied in part, the court concludes that the Report and
Recommendation is not clearly erroneous and finds that the interests of justice do not warrant
deviation from the waiver rule. Accordingly, the court ORDERS as follows:
1. The court ADOPTS IN FULL the Report and Recommendation regarding the
Plaintiff’s motion for default judgment (ECF No. 183).
2. The court grants the motion by “striking Evergreen and Relay’s counterclaims against
Celtig, prohibiting the Patey Defendants from putting Mr. Patey and Mr. Davidson on
the stand, and barring the Patey Defendants from presenting any evidence they have
not yet produced in discovery.” ECF No. 183 at 2.
SO ORDERED September 19, 2019
BY THE COURT:

______________________________
Jill N. Parrish
United States District Court Judge

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