4W4fFor those that are too lazy to open..."Hardball"..thanks PSY...
Case 2:06-cv-00146-WCO Document 98 Filed 02/02/2009 Page 1 of 8
IN THE UNITED STATES COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
GAINESVILLE DIVISION
Jill and Ron Ryan, et al.,
individually and on behalf of others
similarly situated,
Plaintiffs,
-against-
Hidden Lake Academy, Inc., et al.,
Defendants.
No. 2:06-CV-0146 (WCO)
Class Action
REPLY MEMORANDUM IN FURTHER SUPPORT OF THE
SETTLEMENT CLASS REPRESENTATIVES' MOTION
TO ENFORCE SETTLEMENT AND JUDGMENT
The Settlement Class Representative' plaintiffs, individually and on behalf
of the Class, respectfully submit this memorandum oflaw in further support of
theirmotion to enforce settlement and judgment (Doc. no. 96) (the "Motion"), and
in reply to the Defendants' opposition (Doc. no. 97) (the "Opposition").
All capitalized terms not otherwise defmed have the meanings set
forth in the parties' Stipulation of Settlement dated and filed with the Court on
December 13,2007 (the "Stipulation") (Doc. 85-3). The Settlement Class
Representative plaintiffs include DoffMeyer, Robin Brecker, Walter Coles,
Theresa Pines, Dr. Edward Roberson and Madeleine RobeCase 2:06-cv-00146-WCO Document 98 Filed 02/0212009 Page 2 of 8
ARGUMENT
A. Defendants Present No Basis to Oppose Proposed Order
The Defendants concede in their Opposition that they have failed to timely
pay to the Class the $400,000 Settlement Fund, and thus that they have violated the
parties ' Settlement and the Court's Order directing the parties to consummate the
Settlement (Doc. no. 94, Order and Final Judgment at ~ 6). Nothing in Defendants'
Opposition provides a basis to deny plaintiffs ' Motion for post-judgment relief -
which, in fact, actually affords the Defendants additional time to pay the
Settlement Fund.'
In circumstances far less compelling than here, courts have frequently
ordered parties to comply with the terms of settlement agreements. See, e.g.,
2 Specifically, the proposed Order plaintiffs submitted with their
Motion directs that Defendants pay the already past-due Settlement Fund within
ten days from the entry of the proposed Order, or show cause why they should not
be held in contempt and subject to sanction. (Doc. no. 96-2, ~ 1). The Order also
provides for a reasonable allowance of interest and costs in favor ofplaintiffs.
Accord Davis v. Whitford, 282 Ga. App. 143, 148, S.E.2d 849,853 (2006) (holding
that "interest on the principal amount of a judgment accrues until such amount is
paid"); see also 28 U.S.C. ~ 1961(a) ("Interest shall be allowed on any money
judgment in a civil case recovered in a district court.") . In any event, the issues of
possible contempt and sanctions are not at issue now, and indeed would only be at
issue if the Defendants fail to pay in accordance with the Order, and fail to show
Cause for such non-compliance.
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._ -_•._.....•.._-------. ------~~-rson.
Case 2:06-cv-00146-WCO Document 98 Filed 02/0212009 Page 3 of 8
Resnick v. Uccello Immobilien GMBH, Inc., 227 F.3d 1347 (lith Cir. 2000)
(affirming motion to enforce the settlement agreement because defendant had
failed to timely comply with the terms of the agreement); Ramos-Gomez v.
Education Dev. Ctr., Inc., 164 Fed. Appx. 942,943-44 (11th Cir. 2006) (affirming
the district court's order requiring defendant to pay settlement fund).
Further, Defendants' Opposition actually provides additional support for
granting the post-judgment relief plaintiffs seek. In particular, in their Opposition
the Defendants state that they "intend" to pay the Settlement Fund at some
undetermined time in the future following some undefined alleged refinancing they
"intend" to take again at some undefined time in the future. See Opposition at p. 2.
They give no indication, or even any estimate, as to when the alleged refinancing
will take place; what specific steps the Defendants are undertaking to pursue the
refinancing; how much debt, equity and other assets they have; why they have not
made even a partial payment to the Class; and, even more fundamentally, how long
the Court and the Class are supposed to continue to wait.
Such gamesmanship should be no more comforting to the Court than it is to
the plaintiffs or the Class. Indeed, Defendants' Opposition does not even come
close to providing sufficient evidence supporting each Defendant's professed
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inability to pay anything "meaningful" (quoting defendant Buccellato's Jan. 19,
2009 affidavit at ~ 10) (Doc. no. 97). See Commodity Futures Trading Comm 'nov.
Wellington Precious Metals, Inc. , 950 F.2d 1525, 1530 (11th Cir. 1992) (holding
that burden of proving fmancial inability to comply was not satisfied where the
court found defendant's explanations unworthy ofbeliet); Accord In re Lawrence,
279 F.3d 1294, 1298 (11th Cir. 2002); United States v. Roberts, 858 F.2d 698, 701
(11th Cir. 1988) (holding that "alleged contemnor must produce detailed evidence
specifically explaining why he cannot comply") (citing United States v. Rylander,
460 U.S. 752, 757 (1983)).
B. Defendants' Purported Financial Status Is Insufficiently Documented
As noted, Defendants' mere assertions that they lack sufficient funds are
woefully incomplete. However, even if those assertions are true, they provide no
basis to deny plaintiffs the narrow and reasonable post-judgment relief plaintiffs
seek.
Defendants agreed to pay the $400,000 Settlement Fund to the Class more
than twelve months ago. Conclusorily asserting by affidavit that Defendants "have
worked diligently" to refinance HLA's properties during that time (quoting
Buccellato Jan. 19,2009 affidavit at 111), does not even give rise to a reasonable
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excuse for their abject failure to pay, much less come close to providing a
sufficient evidentiary showing. Indeed, in the very next paragraph of his affidavit,
defendant Buccellato admits that he had initiated discussions with some
unidentified "new fmancial entity" only beginning in "early December 2008" -
again, despite having agreed to the Settlement, and being personally liable himself
to pay the amount in full, more than one year ago. [d. at ~ 12: Meanwhile,
defendant Buccellato says nothing about his own personal current financial assets,
and provides no facts whatsoever to update his October 3, 2007 affidavit and
Defendants' sworn accompanying fmancial disclosures which were included with
the parties' Settlement and filed with the Court on December 13,2007. See Doc.
no. 85-3. 3
Further, at no time during the interim twelve months did the Defendants
advise the Class, or (to plaintiffs' knowledge) the Court, that Defendants' financial
condition had deteriorated in any respect; in fact, plaintiffs received no
communication from the Defendants or their counsel during that time at all
) Although Defendants' prior financial disclosures have not been
updated, information as to the Defendants' current financial condition has been
formally requested through plaintiffs' post-judgment discovery request for the
production of documents (Doc. 96-4) and interrogatories (Doc. 96-5). Defendants'
responses to plaintiffs' post-judgment discovery requests are due February 9,2009.
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Case 2:06-cv-00146-WCO Document 98 Filed 02/0212009 Page 6 of 8
concerning their fmancial condition or their intention to not make the required
payment. And, in direct contrast to their mere assertions that they are fmancially
imperiled, plaintiffs understand that defendant Buccellato has apparently started
two new residential boarding schools, Mountain Brook Academy and Creekside
Wilderness Academy, within the past several weeks - a fact completely omitted
from Defendants' Opposition. See
http://www.creeksidewildernessacademy.com;http://www.mountainbrookacademy.org. See also Commodity Futures Trading
Comm 'n., 950 F.2d at 1529 (the "inability to comply" defense requires noncompliant
party to produce sufficient evidence for its failure to pay). Indeed, these
.facts appear to contradict directly defendant Buccellato's assertion that Defendants
lack an ability to pay anything "meaningful" (quoting Buccellato Jan. 19, 2009
affidavit at ~ 10).
Along these lines, it bears emphasis that not just the HLA entities but each
ofthe Defendants - including defendant Buccellato personally - "collectively and
individually, are each bound and obligated to timely pay personally the full
Settlement Fund." Quoting ~ 4(a) of the parties' Stipulation (Doc. no. 85-3). See
also Order and Final Judgment (Doc. no. 94) at ~ 6 (directing the parties "to
consummate the settlement in accordance with the terms and provisions of the
Stipulation"); id. at ~ 12 (reserving exclusive jurisdiction for the Court "over all of
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Case 2:06-cv-00146-WCO Document 98 Filed 02/0212009 Page 7 of 8
the parties ... for all matters relating to this Action, including the ... enforcement of
the Stipulation").
Despite the facts, plaintiffs' Motion provides the Defendants with even more
time to pay, or to show cause by making an actually proper evidentiary showing
concerning their professed inability to pay. See In re Lawrence, 279 F.3d at 1300
(holding that the inability to comply defense is not available where a party created
their own inability). Cf United States v. Hayes, 722 F.2d 723, 725 (11th Cir.
1984) (holding that evidence indicating "some effort" to comply does not rebut a
prima facie showing of a violation of a court order). This relief is both reasonable
and even narrow in view of Defendants' undisputed conduct here. And while
Defendants attempt to make much of it in their Opposition, the truth is that the
issue of sanctions and contempt is not now ripe - and may never be if the
Defendants either pay as plaintiffs seek, or make an actually proper evidentiary
showing."
But in no event should the Defendants be permitted to further string along
the Court or the plaintiff Class.
4 Along these lines, plaintiffs reserve all of their rights, including the
right to file involuntary bankruptcy petitions against each of the Defendants.
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Case 2:06-cv-00146-WCO Document 98 Filed 02/0212009 Page 8 of 8
CONCLUSION
The Settlement Class Representative plaintiffs respectfully request that the
Court grant their motion for post-judgment reliefto enforce the parties' Settlement.
Dated: February 2, 2009
BERGER & MONTAGUE, P.C.
/s/ Lawrence 1. Lederer, Esq.
Merrill G. Davidoff, Esq.
llederer@bm.netLane L, Vines, Esq.
danziska@bm.net1622 Locust Street
Philadelphia, Pennsylvania 19103
Telephone: (215) 875-3000
Fax: (215) 875-4604
Respectfully submitted,
GORBY PETERS & ASSOCIATES,
LLC
/s/ Michael 1. Gorby, Esq.
Michael J. Gorby, Esq.
mpeters@gorbypeters.com(Georgia Bar No. 573595)
Two Ravina Drive, Suite 1500
Atlanta, Georgia 30346-2106
Telephone: (404) 239-1150
Fax: (404)239-1179
.Counselfor the Settlement Class Representatives and the Class
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