United States District Court, D. Colorado
PDX Pro Co., Inc., an Oregon Corporation, Plaintiff: Richard
Albert Oertli, Richard A. Oertli, Attorney at Law, Conifer,
CO; Wes P. Wollenweber, Ciancio Ciancio & Brown,
P.C-Broomfield, Broomfield, CO.
Dish Network Service, L.L.C., a Colorado Limited Liability
Company, Defendant: Darren E. Nadel, LEAD ATTORNEY, Alyson
Alexis Smith, Jennifer S. Harpole, Michelle Lynn Gomez,
William Edward Trachman, Littler Mendelson, PC-Denver,
Denver, CO; Richard Robert Olsen, Olsen Law Firm, P.C., The,
Richard A. Oertli, Interested Party: Bennett S. Aisenberg,
Bennett S. Aisenberg, P.C., The Law Offices of, Denver, CO;
Richard Albert Oertli, Richard A. Oertli, Attorney at Law,
William Carl Groh, Interested Party: Nancy Lin Cohen,
MiletichCohen, PC, Denver, CO.
P. Wollenweber, Interested Party: Scott Frederick Reese, LEAD
ATTORNEY, Scott F. Reese, P.C., Louisville, CO; Wes P.
Wollenweber, Ciancio Ciancio & Brown, P.C-Broomfield,
REGARDING DEFENDANT'S REQUEST FOR SANCTIONS
B. Shaffer, United States Magistrate Judge.
the toils of Sisyphus, who was condemned to perpetually roll
a large boulder up a steep hill, lawsuits and discovery
disputes should come to an end. No one can reasonably dispute
that the instant case has run its course, at least at the
matter comes before the court on Defendant Dish Network
Service, LLC's (hereinafter " Dish" ) Motion
for Allocation of Sanction Fees (doc. #249). With these
submissions, Dish seeks an order holding Plaintiff A PDX Pro,
Co., Inc. (hereinafter " PDX" ) and two of its
attorneys, Richard Oertli and William Groh, jointly and
severally liable for financial sanctions attributable to
discovery violations in this case. More specifically, the
pending motion seeks an order allocating $127,455.75 in fees
that Defendant incurred based upon sanctionable conduct that
Dish attributes to Mr. Oertli and Mr. Groh. Messrs. Oertli
and Groh filed separate response briefs (docs. #253 and #251,
respectively), which were followed by Dish's Reply in
Support of Its Motion for Allocation of Sanction Fees (doc.
#254). On July 31, 2015, Dish filed a Supplement to Motion
for Allocation of Sanction Fees (doc. #261), which prompted
additional submissions from Mr. Oertli (doc. #265) and Mr.
Groh (doc. #266). This court held a two-hour hearing on the
pending motion on September 8, 2015.
following pertinent facts have been gleaned from the
court's file and exhibits
proffered by Dish and Mr. Oertli and Mr. Groh in support of
their respective positions relative to the pending motion.
commenced this litigation on June 29, 2012 with the filing of
a Complaint (doc. #1) that asserted claims for breach of
contract, quantum meruit, negligent representation,
breach of the duty of good faith and fair dealing, civil
conspiracy, breach of retail agreements, and declaratory
relief. Plaintiff contended that after executing an
Installment Service Agreement to install satellite television
equipment on behalf of Dish, PDX was provided " with
Business Rules that deprived [Plaintiff] of the previously
promised independence and subjected PDX to control by
Dish." See Complaint, at ¶ 9. The
Complaint alleged, in part, that
The Business Rules gave DISH unfettered and unreasonable
discretion to deny contractors payment for the reasonable
value of their services and to impose unnecessarily
complicated documentation requirements in order to provide
DISH with an excuse for non-payment based on contractors'
errors in completing paperwork. The Business Rules obligate
contractors to comply with extremely tight timelines to
resolve payment issues, even though they purport to allow
DISH to go back indefinitely with no time constraints on its
efforts to recover from alleged overpayments to its
Id. at ¶ ¶ 10 and 11.
initially estimated its damaged at $965,225.32, plus an
unknown amount for receivers that PDX purchased from and then
returned to Dish. As to the latter category of damages, PDX
claimed that it could not quantify its losses more precisely
without " complete equipment payment and RA records
[from Dish], as well as all retail exchanges and receiver
purchase orders by PDX in order to determine how many
receivers are involved and exactly what amount, if any,
[Dish] owes PDX for them." See Scheduling Order
(doc. #33), at 9-10.
argued, to the contrary, that " the Business Rules at
issue here govern, inter alia, payment disputes for
labor and equipment" and establish " specific
deadlines in which a payment must be disputed and explicit
instructions setting forth the manner and method by which to
do so." According to Defendant, " [d]espite these
unambiguous directions, including warnings that jobs
submitted outside [the established] deadlines would be
rejected by [Dish], PDX consistently failed to adhere to the
Business Rules," which meant that " many of
Plaintiff's claims for relief are . . . barred by the
Business Rules." Id. at 5.
served its first set of written discovery on December 14,
2012, including Interrogatory No. 4 which asked PDX to
identify all transactions in dispute in this case and to
provide detailed information regarding those transactions,
including a list of the documents supporting PDX's
request for payment on each disputed transaction, and the
dates of PDX's compliance with various aspects of the
applicable Business Rules between the parties. Plaintiff
responded, without objection, to Interrogatory No. 4 on
February 11, 2013 by invoking Fed.R.Civ.P.
33(d) and identifying four pages of computer
hard-drive pathways contained in a hard-drive that PDX did
not contemporaneously produce. That interrogatory response
was signed by PDX's counsel, Richard
Oertli, and verified as " true and
complete to the best of his knowledge" by Michael
Paxton, PDX's Chief Operating Officer.
series of communications between counsel, Dish challenged the
adequacy of PDX's response to Interrogatory No. 4 during
a telephone discovery conference with the district judge on
June 6, 2013. Dish complained that PDX had produced
spreadsheets that reflected all the transactions between the
parties, and not specifically the unpaid transactions that
formed the bases for Plaintiff's alleged damages.
See Transcript of Proceedings on June 6, 2013 (doc.
#66), at 8. In response, Plaintiff's counsel advised
Judge Jackson that his client did not have " complete
data to prove" its damages and needed additional
information from Dish.
As I understand it, Your Honor, its mostly work orders that
were sent in electronically. And my client doesn't have a
complete record of what he sent in electronically, so he
can't reconstitute a lot of his claims.
Id. at 10. Judge Jackson directed Dish to "
produce all the work orders" and then had the following
colloquy with Mr. Oertli:
The Court: And if [Dish does that], then Mr. Oertli, you
think you can provide an answer to interrogatory 4 that's
Mr. Oertli: Well, I certainly hope the client can, Your
The Court: Pardon me?
Mr. Oertli: I suspect the client can, Your Honor. Yes.
The Court: Well, if the client can't produce the
information, it's going to be hard for the client to
prove its case, isn't it?
Mr. Oertli: It's going to be difficult on that damages
Id. at 12-13. At the conclusion of the June 6, 2013
discovery conference, Judge Jackson directed PDX to provide a
complete response to Interrogatory No. 4 by July 15,
2013. Id. at 13. See also
Minute Order (doc. #63) of June 6, 2013.
3, 2013, Mr. Oertli requested that Dish provide work order
data in native Excel format, rather than the PDF format
contemplated under the parties' January 9, 2013
Scheduling Order (doc. #33). Dish honored that request on
July 12, 2013 by providing Mr. Oertli with a thumb-drive
containing the requested information. Apparently Mr. Paxton
did not receive that data from his counsel until July 16,
2013. Because of that delayed transmittal, Plaintiff's
Supplementation of its Computation of Damages; and Related
Responses to Interrogatory No. 4 did not incorporate the very
information that Mr. Oertli earlier told Judge Jackson was
essential to allow his client to prepare a "
complete" response to Interrogatory No. 4. See
Exhibit O submitted with Defendant's Exhibits for Hearing
on Allocation of Sanction Fees (acknowledging in paragraph 6
of page 2 that " PDX will not know until July 16, 2013,
at the earliest, whether it can use the information on the
third thumb drive and whether it will need to supplement
again its responses regarding its damages and Interrogatory
No. 4" ).
surprisingly, Dish believed that Plaintiff's July 15th
supplement still failed to provide the detailed information
required by Interrogatory No. 4 and did not identify any
supporting documentation. Moreover, Dish insisted that PDX
actually had been paid for many of the 21,632 transactions
referenced in the most recent supplement.
September 25, 2013, PDX provided a Second Supplementation of
its Computation of Damages; and Related Second Supplemented
Responses to Interrogatory No. 4 that referred to 18,079
challenged transactions (down from the prior claim of 21,632
transactions). See Exhibit Q (doc. #88-17) attached
to Defendant's Motion to Compel. The Second
Supplementation stated that Plaintiff could not provide a
complete computation of its damages either because Dish had
not provided necessary documentation or PDX lacked essential
information in its own files. Plaintiff also asserted that it
would " determine with more precision the amount of
profits and revenues Dish caused it to lose by its bad faith
conduct and punitive actions," once Judge Jackson
determined " that PDX can recover loss of profits and
revenues, in spite of the unconscionable provision in the
Installment Agreement purporting to limit the damages PDX may
representations were squarely at odds with Plaintiff's
initial response to Interrogatory No. 4. By invoking Rule
33(d), PDX implicitly represented that all of the information
requested in that interrogatory could be gleaned through the
computer hard-drive pathways previously identified. But
see Smith v. Sentinel Insurance Co., Ltd., No.
10-CV-269-GKF-PJC, 2011 WL 2883433, at *2 (N.D. Okl. Jul. 15,
2011) (finding that defendant's initial invocation of
Rule 33(d) was improper and that its interrogatory response
was " sloppy, evasive, and deceitful," particularly
in light of defense counsel's concession (three months
later) that the documents in question did not contain the
requested information). Cf. In re Lithium Ion
Batteries Antitrust Litigation, No. 13-md-0420-YGR
(DMR), 2015 WL 4999762, at *2 (N.D. Cal. Aug. 21, 2015)
(finding that defendants' reliance on Rule 33(d) was
improper given that the referenced documents were plainly
incomplete and did not fully contain the information
requested in the interrogatory at issue).
October 3, 2013, Dish filed a Motion to Compel
Plaintiff's Response to Interrogatory No. 4, for Order
Requiring Compliance with Prior Order, and for Sanctions
(doc. #87). Dish conceded that PDX had produced on September
25, 2013 a new Excel file that identified 8,942 allegedly
" unpaid transactions" and 9,137 disputed
receivers. Defendant insisted, however, that this spreadsheet
still did not cure all the deficiencies in Plaintiff's
earlier responses to Interrogatory No. 4.
For example, the over 9,000 receivers on which Plaintiff
requests payment are identified only by part number, with no
information regarding (a) work order numbers; (b) account
numbers; (c) reconciliation type; or (d) return authorization
numbers, among other missing information. PDX simply states,
" We could not determine on what accounts this receiver
was activated on." This is troubling since PDX would
have physically installed any of the receivers it could be
paid for, and since it should have records containing all of
the information sought by [Dish].
See Defendant's Motion to Compel, at 5. Dish
argued that " many of the 'unpaid transactions'
remain similarly deficient," that PDX continued to list
" transactions on which PDX has been paid," and had
failed " to identify any documents supporting the
payment amounts requested for any of the over 9,000 receivers
and for more than 2,000 of the allegedly 'unpaid
transactions.'" Id. at 6. In closing
its Motion to Compel, Dish argued that PDX should be
prohibited " from presenting any evidence regarding any
of the transactions for which its response (sic) are
deficient either at trial or in response to dispositive
motions filed by [Dish]" and that Defendant " be
awarded its reasonable attorney fees pursuant to Rule
Response to Defendant Dish's Motion to Compel (doc. #94),
PDX maintained that its most recent supplemental response to
Interrogatory No. 4 " identified the 'transactions
in dispute'" and, indeed, reduced Plaintiff's
" claims for damages by $611,934" based on the
additional information provided by Dish. PDX also questioned
" why a Motion
to Compel should be filed for the production of information
PDX has repeatedly stated it cannot provide without more data
from Dish." Mr. Oertli assured Dish and the court that
he had " been instructed by PDX to be an 'open
book' and produce everything relevant." Id.
conclusion of a hearing on October 17, 2013, I directed PDX
to provide " a full and comprehensive [Fed. R. Civ. P.
Rule] 26(a)(1) disclosure" that included " a
computation of your damages by category." See
Transcript of Proceedings on October 17, 2013 (doc. #107), at
58. This court also required PDX to " identify each and
every document [it] relies upon and intends to use at trial
to support [its damages] computation,"  and to "
identify with particularity in [its Rule] 26(a)(1)
disclosures those categories of damages for which [PDX] is
lacking documentation,"  with the added warning
that these disclosures would be subject to Fed.R.Civ.P.
26(g)'s certification requirement. Id. at 58-59.
Counsel was advised not to " let your client send
something . . . for which you are not willing to live with
the consequences, because under [Rule] 26(g) if I find that a
lawyer has failed to comply with their certification
requirement," the court would be required to award fees
and costs. Id. After Mr. Oertli expressed some
uncertainty as to his obligations under Rule 26(g), the court
explained that the Rule
does not require the signing attorney to certify the
truthfulness of the client's factual responses, rather
the signature certifies that the lawyer has a made a
reasonable effort to assure that the client has provided all
the information and documents available to him that are
Id. at 60. In closing, the court granted in part and
denied in part Dish's motion to compel, and specifically
declined to award fees and costs to either side. Id.
during the hearing on October 17, 2013, Mr. Oertli orally
moved to withdraw from his representation of PDX, suggesting
that he had " discussed" that prospect several
times with his client. Id. at 69. Mr. Oertli
explained " the client is unhappy with me" and
" [t]he feeling is mutual," but then declined to
provide more particularized grounds for his request.
Id. at 70. This court stated that it would not
consider counsel's motion to withdraw " until all
discovery is complete," id. at 70, and " I
resolve all of the disputes about written discovery."
Id. at 96.
October 21, 2013, PDX served its Third Supplementation of its
Computation of Damages and Related Third Supplemented
Responses to Interrogatory No. 4 (doc. #98). For several
categories of damages, PDX once again claimed it could not
provide a " total figure" without additional
information from Dish. Mr. Oertli closed ...