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CGC Holding Company, LLC v. Hutchens

United States District Court, D. Colorado

November 16, 2016

CGC HOLDING COMPANY, LLC, a Colorado limited liability company; CRESCENT SOUND YACHT CLUB, LLC, a Florida limited liability company; HARLEM ALGONQUIN LLC, an Illinois limited liability company; and JAMES T. MEDICK; on behalf of themselves and all others similarly situated, Plaintiffs,
SANDY HUTCHENS, a/k/a Fred Hayes, a/k/a Moishe Alexander, a/k/a Moshe Ben Avraham, et al, Defendants.


          R. Brooke Jackson United States District Judge

         Presently pending are (1) plaintiffs' motion in limine seeking an order precluding the “Hutchens Defendants” from presenting live testimony at trial if the witnesses won't appear for examination during plaintiffs' case in chief; (2) the Hutchens Defendants' motion to alter or amend the Court's summary judgment order issued April 29, 2016 in certain respects; and (3) plaintiffs' motion to compel the Hutchens Defendants to produce certain discovery information.[1]This order addresses the first two motions. The third has been referred to Magistrate Judge Mix.

         I. Facts.

         I have summarized the basic claims and defenses several times in previous orders and will repeat only so much as might be helpful to give the pending motions some context. Plaintiffs represent a class of entities and individuals in the United States who, desperate for loans, learned of lenders headquartered in Toronto, Ontario who had money to lend. They submitted applications through loan brokers, received loan commitment agreements, and paid nonrefundable loan commitment fees that were required by the lenders. Thereafter, in each case the lenders determined that the would-be borrower failed to meet some eligibility condition, terminated the loan commitment, and retained the commitment fee.

         Plaintiffs claim that from the outset the purported lenders had neither the intent nor the ability to fund more than a tiny fraction, if any, of the loans to which they committed. Instead, Plaintiffs claim that this was a fraudulent scheme designed to swindle them out of the loan commitment fees. The purported mastermind was Sandy Hutchens, although they did not know that at the time because he and his associates concealed his identity and his criminal past by the use of a number of aliases.

         Although it was not clear when the case was first filed, plaintiffs have since stipulated that there were legitimate reasons for which a bona fide lender could have declined the loans. However, plaintiffs claim that they never would have applied for the loans and paid the up-front commitment fees had they known of the facts that Mr. Hutchens and his associates concealed from them. Plaintiff initially asserted a variety of causes of action, but what remains for trial are claims under the Racketeer Influenced and Corrupt Practices Act, sometimes referred to as civil RICO.

         The Hutchens Defendants argue that Sandy Hutchens was a reformed man and a legitimate lender. They submit that he and his associated entities had both the ability and the intent to fund loans to qualified borrowers. However, after receiving the commitment fees, the Hutchens Defendants discovered during the course of their due diligence investigation that applicants either were not qualified or had omitted material facts from their applications, or both. For those reasons the loans were not funded, and plaintiffs have no grounds to claim entitlement to return of their application fees.

         II. Case History.

         This case was filed on April 15, 2011. Plaintiffs named as defendants the lenders and several lawyers and a real estate agent who allegedly assisted Mr. Hutchens in the perpetration of the fraud. During the course of the case many motions have been filed, many orders have been issued, one interlocutory appeal has been taken, and the case has been set and re-set for trial several times. Along the way plaintiffs' claims against all defendants other than the Hutchens Defendants have either settled or have been dismissed. The trial of plaintiffs' RICO claims against the Hutchens Defendants is set for April 10, 2017.

         III. Pending Motions.

         A. Plaintiffs' Motion in Limine to Preclude Any of the Hutchens Defendants from Testifying Live in Defendants' Case-in-Chief if the Hutchens Defendants Refuse to Make Them Available During Plaintiffs' Case-in -Chief [ECF No. 694]: GRANTED.

         Plaintiffs have apparently taken depositions of Sandy and Tanya Hutchens and Jennifer Araujo, but they prefer to call them as live witnesses at trial. However, the Hutchens Defendants have declined to commit to their presence. Therefore, plaintiffs seek an order precluding the defendants from calling these individuals as live witnesses during the defense case if they did not make themselves available to be called live by the plaintiffs.

         The Hutchens Defendants respond that the motion is premature and speculative. It is unlikely, they suggest, that one of these individuals would be unavailable to testify during plaintiffs' case but available during defendants' case. ECF No. 709 at 1. But if that “speculative improbability” were to occur, the Court could keep plaintiffs' case in chief open until the witness is called by the defense and then permit plaintiffs' counsel to cross-examine the witness fully at that time. Id. at 1-2. Or, if the witnesses are present during plaintiffs' case in chief, the Court could “mitigate the potential unfairness to a defendant of having its witness presented in the plaintiffs' case-in-chief by permitting the witness to be presented as an out-of-order defense witness.” Id. at 2.

         It appears from defendants' proposed alternatives that they do anticipate that the individuals will be present at least at some point during the trial. Therefore, the dispute is a tactical one, apparently turning on which party gets to present the live testimony first. But it is neither unusual nor improper for a plaintiff to wish to call the opposing party during the plaintiff's case in chief. Absent some irreconcilable scheduling conflict, there generally is no compelling reason to let a defendant call ...

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