Case 2:11-cv-01426-GMS Document 40 Filed 11/14/11 Page 1 of 7

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GINGRAS LAW OFFICE, PLLC 3941 E. CHANDLER BLVD., #106-243 PHOENIX, ARIZONA 85048

David S. Gingras, #021097 Gingras Law Office, PLLC 3941 E. Chandler Blvd., #106-243 Phoenix, AZ 85048 Tel.: (480) 668-3623 Fax: (480) 248-3196 David@GingrasLaw.com Attorney for Plaintiff Xcentric Ventures, LLC UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA XCENTRIC VENTURES, LLC, an Arizona limited liability company, Plaintiff, v. LISA JEAN BORODKIN et al., Defendants. Plaintiff XCENTRIC VENTURES, LLC (Plaintiff or Xcentric) respectfully submits the following Response to Defendant LISA BORODKINs (Ms. Borodkin) Motion to Strike (Doc. #36). Because the issues raised in Ms. Borodkins motion are very simple, this response will be as brief as possible. Ms. Borodkin argues that the Court should strike five paragraphs ( 2, 42, 44, 50 and 51) from Xcentrics Complaint because they contain scandalous and/or unsubstantiated allegations of various wrongful conduct by Ms. Borodkin and her codefendants. In short, the allegations at issue primarily accuse Ms. Borodkins former clients (Defendants RAYMOND MOBREZ and ILIANA LLANERAS; the Mobrez Defendants) of committing perjury and related crimes (i.e., false swearing) during the course of the prior lawsuit they commenced against Xcentric. Ms. Borodkin argues that all such allegations should be stricken from the Complaint because, inter alia, None of Defendants has ever been prosecuted for or convicted of the crimes of perjury, subornation of perjury, or false swearing. Mot. at 3:1617.
RESPONSE TO MOTION TO STRIKE

Case No.: 11-CV-1426-GMS PLAINTIFFS RESPONSE TO DEFENDANT LISA BORODKINS MOTION TO STRIKE

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GINGRAS LAW OFFICE, PLLC 3941 E. CHANDLER BLVD., #106-243 PHOENIX, ARIZONA 85048

Oddly, to support her argument Ms. Borodkin cites authority such as Naults Automobile Sales, Inc. v. American Honda Motor Co., Inc., 148 F.R.D. 25 (D.N.H. 1993). Rather than showing that the instant motion should be granted, Naults largely stands for the opposite premise; motions to strike alleged redundant, immaterial, impertinent or scandalous matter are not favored. Matter will not be stricken from a pleading unless it is clear that it can have no possible bearing upon the subject matter of the litigation. Naults, 148 F.R.D. at 30 (emphasis added) (quoting Skadegaard v. Farrell, 578 F.Supp. 1209, 1221 (D.N.J. 1984)); see also Freeman v. Apker, 2011 WL 5024300 (D.Ariz. 2011) (noting, Motions to strike are generally regarded with disfavor and should not be granted unless it is clear that the matter to be stricken could have no possible bearing on the subject matter of the litigation.) (quoting Rosendahl v. Bridgepoint Educ., Inc., 2011 WL 4914948, 9 (S.D.Cal. 2011); Brown & Williamson Tobacco Corp. v. U.S., 201 F.2d 819, 822 (6th Cir. 1953)). The facts of Naults illustrate the rationale for Rule 12(f), but the facts of Naults bear no similarity to this case. In Naults, the underlying case involved a relatively generic breach of contract action between an automotive dealership (Naults) and the manufacturer (Honda). As the contract case progressed, the relationship between

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opposing counsel became hostile and acrimonious, and each side began hurling largely gratuitous accusations of misconduct at the other, most of which related to arguments about highly technical discovery disputes. See 148 F.R.D. at 2728 (describing the lawyers deteriorating relationship and noting, With each passing week the pleadings assumed a more hostile and accusatory tone. Terms such as perjury, contempt, liar, and suborning of perjury became almost routine in Naults pleadings.) These allegations of misconduct were entirely collateral to the underlying contractual dispute; they did not relate in any way to the actual merits of the breach of contract case. Nevertheless, the court performed an extensive review of the allegations which included receiving several days of testimony on the matter. After a full hearing, the court concluded that Naults counsel failed to prove that Hondas counsel committed 2
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GINGRAS LAW OFFICE, PLLC 3941 E. CHANDLER BLVD., #106-243 PHOENIX, ARIZONA 85048

perjury or other criminal activity, and as a result the court ordered those allegations stricken and ordered Naults lawyers to apologize. See 148 F.R.D. at 37 (explaining, During the February 2224 hearing Nault failed to prove even one of its charges against counsel for Honda. While there is little chance that counsel at Lyon & Lyon will ever be commended for their cooperative and professional handling of this case, insufficient evidence has been presented to justify a finding that Naults counsels conduct was objectively reasonable in repeatedly asserting that Lyon & Lyon attorneys engaged in contempt, perjury, subornation of perjury or criminal activity.) Here, unlike in Nault, Ms. Borodkin attempting to obtain what amounts to a summary disposition of the merits of Xcentrics allegations without a hearing and without providing the Court with any evidence other than her own counsels arguments as to her innocence. This effort is both procedurally inappropriate and factually unwarranted; The opinion of a lawyer on the question of probable cause is not admissible. Carroll v. Kalar, 112 Ariz. 595, 599, 545 P.2d 411, 415 (1976). Here, unlike in Nault, the allegations that the Mobrez Defendants committed perjury and other unlawful conduct, or that Ms. Borodkin and/or Mr. Blackert suborned perjury from them and otherwise acted unethically and unlawfully, are directly relevant and material to the merits of this case. See De Lamos v. Mastro, 2010 WL 3809936, *3 (D.Ariz. 2010) (explaining that in the context of a motion to strike, Matter is immaterial if it has no essential or important relationship to the claim for relief. [Citation] Statements are impertinent if they do not pertain, and are not necessary, to the issues in question.) (quoting Fantasy, Inc. v. Fogerty, 984 F.2d 1524, 1527 (9th Cir. 1993)). Far from being immaterial or impertinent, the allegations identified in Ms. Borodkins Motion to Strike are at the very core of this case. Despite their harsh nature, these allegations are not gratuitous; they are relevant to affirmative elements of both of Xcentrics malicious prosecution claims, specifically: 1.) lack of probable cause for the prior proceeding, and 2.) malice. See Carroll, 112 Ariz. at 596, 545 P.2d at 412 (explaining, The essential elements [of] a malicious prosecution action are: (1) the institution of a proceeding, (2) 3
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GINGRAS LAW OFFICE, PLLC 3941 E. CHANDLER BLVD., #106-243 PHOENIX, ARIZONA 85048

actuated by malice, (3) without probable cause by the defendant in this action, (4) which terminated in plaintiffs favor, (5) and caused him damages.) Put differently, saying that a defendant acted with malice or acted without probable cause are mere conclusory labels which do not explain how the action was malicious or why the defendant lacked probable cause. Without including more detail about the specific conduct involved, these types of unsupported conclusory labels would have failed to nudge Xcentrics claims across the line from merely conceivable to plausible; a plaintiffs obligation to provide the grounds of his entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 550, 127 S.Ct. 1955, 196465 (2007) (quoting Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986)). In order to satisfy Twomblys standards and to provide a sufficient factual foundation for the elements of malice and lack of probable cause, Xcentrics Complaint alleges that the Mobrez Defendants invented completely untrue allegations in the prior action which included offering false sworn testimony in two affidavits and, in the case of Mr. Mobrez, offering false testimony during a deposition. The Complaint refers to these actions as perjury and false swearing because this is exactly what occurred. Obviously, if these serious allegations are proved at trial, this would support Xcentrics position that the prior California proceeding was initiated without probable cause. If Mr. Mobrez and Ms. Llaneras lied about the material facts of their claims, then a fortiori they could not have had probable cause to reasonably believe[] in the existence of the facts upon which the claim is based . Restatement (Second) Torts 675 (defining probable cause as element of a claim for wrongful use of civil proceedings); see also Chalpin v. Synder, 220 Ariz. 413, 419, 207 P.3d 666, 672 (App. 2008) (explaining, The proper test [for probable cause in a malicious prosecution case] is subjective and objective. The initiator of the action must honestly believe in its possible 4
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GINGRAS LAW OFFICE, PLLC 3941 E. CHANDLER BLVD., #106-243 PHOENIX, ARIZONA 85048

merits; and, in light of the facts, that belief must be objectively reasonable.) (emphasis added) (quoting Bradshaw v. State Farm Mut. Auto. Ins. Co., 157 Ariz. 411, 417, 758 P.2d 1313, 1319 (1988)). Here, Xcentric has alleged and intends to prove that the Mobrez Defendants did not honestly believe in the merits of their prior case against Xcentric. On the contrary, the evidence will show that they lied about the merits of the case by manufacturing a false story which simply never occurred. This fact, if proved, would establish that the prior California action was commenced without probable cause, that the Mobrez Defendants knew the case lacked probable cause, and that because of their malice towards Xcentric, they were willing to go to extreme lengths including, but not limited to, committing perjury in an effort to wrongfully destroy the Ripoff Report website. By the same token, Xcentric has alleged that during her involvement in the prior action, Ms. Borodkin also engaged in unlawful and unethical conduct which relates to both her knowledge that the case lacked probable cause and also her malice towards Xcentric. The fact that these allegations may be embarrassing does not justify striking them from the Complaint at this early stage of the litigation. In the prior California case, Ms. Borodkin did not hesitate to repeatedly accuse Xcentric of serious criminal conduct including extortion, attempted extortion and wire fraud. Although those allegations

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against Xcentric were factually false, the alleged criminal conduct was a material part of the claims in that case. As such, rather than asking the court to strike the claims, Xcentrics remedy was simply to prove that the allegations were groundless, as it ultimately did. The same is true here. The allegations of unethical, criminal, and tortious conduct by Ms. Borodkin and her co-defendants relate directly to the merits of Xcentrics claims this case. Despite Ms. Borodkins efforts to characterize the issues as impertinent and scandalous, striking these allegations at the pre-Answer stage would be tantamount to granting summary judgment in favor of Defendants. 5
RESPONSE TO MOTION TO STRIKE

Such a process would be

inconsistent with both Rule 56 and with the general rule that when considering a Motion

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GINGRAS LAW OFFICE, PLLC 3941 E. CHANDLER BLVD., #106-243 PHOENIX, ARIZONA 85048

to Strike under Rule 12(f), [a]ny doubt concerning the redundancy, immateriality, impertinence, scandalousness or insufficiency of all or part of a pleading must be resolved in favor of the non-movant. XY Skin Care & Cosmetics, LLC v. Hugo Boss, USA, Inc., 2009 WL 2382998, *1 (D.Ariz. 2009) (emphasis added) (also discussing disfavored nature of Motions to Strike and repeating general rule that Matter will not be stricken from a pleading unless it is clear that it can have no possible bearing upon the subject matter of the litigation; if there is any doubt as to whether under any contingency the matter may raise an issue, the motion may be denied.) (quoting Wailua Assoc.'s v. Aetna Cas. & Sur. Co., 183 F.R.D. 550, 55354 (D.Haw. 1998)). Because the material described in Ms. Borodkins Motion to Strike is relevant and material to the merits of the claims against her, her motion should be denied. DATED November 14, 2011. GINGRAS LAW OFFICE, PLLC /S/ David S. Gingras David S. Gingras Attorneys for Plaintiff

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RESPONSE TO MOTION TO STRIKE

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GINGRAS LAW OFFICE, PLLC 3941 E. CHANDLER BLVD., #106-243 PHOENIX, ARIZONA 85048

CERTIFICATE OF SERVICE

I hereby certify that on November 14, 2011 I electronically transmitted the attached document to the Clerks Office using the CM/ECF System for filing, and for transmittal of a Notice of Electronic Filing to the following: Hartwell Harris, Esq. LAW OFFICE OF HARTWELL HARRIS 1809 Idaho Avenue Santa Monica, CA 90403 Attorney for Defendants Raymond Mobrez Iliana Llaneras and Asia Economic Institute, LLC John S. Craiger, Esq. David E. Funkhouser III, Esq. Quarles & Brady LLP One Renaissance Square Two North Central Avenue Phoenix, Arizona 85004-2391 Attorney for Defendant Lisa J. Borodkin And a courtesy copy of the foregoing delivered to: HONORABLE G. MURRAY SNOW United States District Court Sandra Day OConnor U.S. Courthouse, Suite 622 401 West Washington Street, SPC 80 Phoenix, AZ 85003-215

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/s/David S. Gingras

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