BRIAN BARRY #13563 1JILL LEVINE BETTS #208065LAW OFFICES OF BRIAN BARRY1801 Avenue of the Stars, Suite 307Los Angeles, California 9006 7Telephone : 310 788-0831Facsimile : 310 788-084 1

Attorneys for Class Action Plaintiffs[Additional Counsel on Signature Page]

UNITED STATES DISTRICT COURTCENTRAL DISTRICT OF CALIFORNIA - WESTERN DIVISION

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

In re HERITAGE BOND LITIGATIO N

David Sinow , Howard P reston , Lan donParrill , Ray Stits, Barrett Anderson , LaurencePilgeram, Scott McKenry, Ralph Allman, andGilbert Kivenson , On behalf of themselves andall others similarly situated,

Plaintiffs,V .

U.S . Trust Company of Texas, N .A., U.S.Trust Corporation, Tarrant County HealthFacilities Development Co rporation , JeroldGoldstein , Onofrio V . Bertolini , Stephen P .Goodman , Evan Greenspan, Estate of AndrewKornreich , Deceased , Cary Medill , Estate ofEmery Rubin , Larry A. Rubin , HerbertSaltzman , Virgil Lim, Clarke Underwood,Donald B . Chalker, Marshall Wexler , RobertKasirer , Debra Kasirer, Bistra & MunkacsHoldings, Inc ., JDDJ Holdings , L.P., HealthCare Holdings, LLC, CareContinuum, LLC,Louis Pontarelli , William Filippone, LeoDierckman , Alan Pollak , Geri Ostlund,Richard Kuhl , WRS Architects, Inc ., James E .Iverson , Victor P. Dhooge, John M . Clarey,James F. Dlugosh , Edward J . Hentges,Kenneth R . Larsen , Jerome E. Tabolich,Steven W . Erickson , Paul R . Ekholm, KennethE. Dawkins , Joel T . Boehm, Sabo & Green,Atkinson , Andelson , Loya, Ruud & Romo,Valuation Counselors Group , Inc ., CoddingtonAppraisal Services , Capital Consulting Group,Inc ., Healthcare Financial Solutions Group,Inc ., Zelenofske, Axelrod & Co., Ltd ., Bermanand Bertolini , Inc. aka Berman & Associates,Michael Sobelman , Sobelman Cohen &Sullivan LLP , Foley & Lardner as Doe No.2and Wildman Harrold Allen & Dixon as DoeDefendant No . 3 and Does 4-10,

Defendants .

02-ML-1475-DT (RCx )

Consolidated With Case Nos :CV-01-5752 DT (RCx)CV 02-382 DT (RCx)CV 02-993 DT (RCx)CV 02-6484 DT (RCx)CV 02-6841DT ( Cx)CV 02-2745 DT RC)CV 02-9221 DT (RCx )

Companion CaseCV 02-6512 DT (RicX. )

This Document Relates To :

CV 02-382 DT (RCx)

PLAINTIFFS' OPPOSITIONTO DEFENDANTVALUATIONCOUNSELORS' MOTIONTO WITHDRAWADMISSIONS DEEMEDADMITTED AND TORECONSIDER MAG.CHAPMAN'S RULING;MEMORANDUM OFPOINTS ANDAUTHORITIES INSUPPORT THEREOF

Date/Time: June 28, 200410:00 a.m.Courtroom: 880Hon. Dickran Tevrizian

Discovery Cutoff : 8/27/04Pre-Trial Conf: 11/1/04

PLAINTIFFS' OPPOSITION TO DEFENDANT VALUATION COUNSELORS .MOTION FOR RECONSIDERATIO N

6-14-04OppCBIZ Recon .Mot.wpd

1

2

3

4

5

6

7

8

9

1 0

11

12

13

14

15

16

17

1 8

19

20

21

22

23

24

25

26

27

28

TABLE OF CONTENTS

PAGE

TABLE

1 . INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I

III. ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

A . This Court Should Not Hear Defendant ' s Dilatory Motion . . . . . . . . . 3

1 . Local Rule 72-2 .1 Bars Defendant's Dilatory Motion . . . . . . . . . 3

2 . Fed. R . Civ. P. 60(b) Does Not Apply to Relieve Defendant forFiling Dilatory Motion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

3 . This Court's Standing Order Bars Defendant's Dilatory Motio n

4 . Public Policy Mandates Dismissal of Defendant's DilatoryMotion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

B . Defendant Fails to Demonstrate that Judge Chapman's Discovery OrderIs Clearly Erroneous or Contrary to Law . . . . . . . . . . . . . . . . . . . . . . 8

C. Defendant Fails to Meet the Two- Prong Test Under Fed . R. Civ . P.36(b) to Justify Withdrawal or Amendment of Its Admissions

1 . Admissions Do Not Subserve Defendant ' s Case On Its Merits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 3

2 . Defendant's Withdrawal or Amendment of Its Admissions WillPrejudice Plaintiffs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 8

D. Fed . R . Civ . P. 60(b ) Does Not Apply to Relieve Defendant forFailure to Provide Timely Responses to Plaintiffs' Requests forAdmissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

E. Defendant is Responsible for Its Own Actions and Omissions . . . . . 23

IV. CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

PLAINTIFFS' OPPOSITION TO DEFENDANT VALUATION COUNSELORS MOTION FOR RECONSIDERATIO N

6-14-O40ppCBIZ Recon .Mot .wpd

1

2

3

4

5

6

7

8

9

1 0

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

TABLE OF AUTHORITIESPAGE

TABLE

999 v . C.LT. Corp.776 F . 2d 966 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,15,1 8

Anderson v. Liberty Lobby, Inc .477 U . S .242 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 3

Arizona Western Ins . Co. v. L . L. Constantin & Co .247 F.2d 388 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Asea, Inc. v. Southern Pac ific Transp. Co .669 F.2d 1242 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,1 8

Baker v. Potter212 F.R .D.8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13-1 8

Bily v. Arthur Young & Co .3 Cal.4th 370 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 5

Bryant v. Ford Motor Co.844 F.2d 602 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Budd v. Nixen6 Cal.3d 195 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 3

Chang v. Smith778 F .2d 83 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6, 7

Chism v. National Heritage Life Insurance Co .637 F .2d 1328 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,5, 8

Comiskey v. JFTJ Corp.989 F.2d 1007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

ap e & Prods. v . Constr. Laborers Pension TrustConcrete P~ ~508 U . S .602 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,9,1 0

Davis v. Nou al142 F . .D . 258 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Donovan v. Anderson1981 U.S . Dist. LEXIS 14051 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1

Easton v. Strassburger152 C l A 3d 90 1 7. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .a . pp. . . . . . .

Farm Const . Services, Inc. v. Fudg e831 F.2d 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

PLAINTIFFS' OPPOSITION TO DEFENDANT VALUATION COUNSELORS .MOTION FOR RECONS IDERATION

6-14-O4OppCBIZ Recon. Mot .wpd

1

2

3

4

5

6

7

8

9

1 0

11

1 2

13

1 4

15

1 6

17

18

1 9

20

21

22

23

24

25

26

27

28

Federal's, Inc . v. Edmonton Investment Co .555 F.2d 577 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Fidelity & Deposit Company of Maryland,196 F .R.D . at 378 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9

Fred M. Wells, Inc . v. Marshall & Steven s218 Cal .App.2d 256 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Green v. Baca219 F.R .D. 485 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Grimes v. City and County of San Francisco951 F . 2d 236 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

In re Heritage Bond Litigation220 F ~ R. D . 624 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 4, 9, 10, 18, 21

Kalis v . Colgate- Palmolive Co.231 13d 1049 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Lance, Inc. v. Dewco Services, Inc .422 F .2d 778 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Land v . Denny's,~~ Inc.1997 U .S . App . LEXIS 36421 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Ledwith v . Storkan2 F.R.D . 539 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Link v . Wabash Railroad Co .370 U .S . 626 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Lompoc Unified School Dist. v. Superior Court20 Cal.App .4th 1688 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Lubben v . Selective Service System Local Board No . 27453 F.2d 645 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Marshall v . Board of Education575 F .2d 417 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Martin v. Hall20 Cal .App.3d 414 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Merrill v. Navegar, Inc .26 Cal .4th 465 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Nally v . Grace Community Church47 Cal . 3d 278 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 3

PLAINTIFFS' OPPOSITION TO DEFENDANT VALUATION COUNSELORS .MOTION FOR RECONSIDERATION

6-14 .04OppCBIZ Recon .Mot .wpd

1

2

3

4

5

6

7

8

9

10

11

12

13

14

1 5

16

17

18

19

20

21

22

23

24

25

26

27

28

Pathman Constr . Co. v. Drum - Co Engineering Corp .402 N .E.2d 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22

People v. Young20 Cal .2d 832 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 6

Rabil v. Swa ord128 F.k .D.I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 4

Security Farms v. Intl Brotherhood of Teamsters124 F.3d 999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Soderberg v. McKinney44 Cal .App.4th 1760 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 6

Sonoda v. Cabrera255 F.3d 1035 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,1 9

Steingut v . National City Bank of New York36 F.Supp. 486 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Sudderth v. City and County of San. Fran ., et. al .2001 WL 764929 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Turpin v. Sortini31 Cal-3d 220 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 3

United States v. Erdoss440 F .2d1221 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

United States v. O'Neil709 F.2d 361 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Weva Oil Corp. v. Belco Petroleum Corp.R68 66 22F. .D . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 ,

Williams v . Five Platters, Inc .510 F .2d 963 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

CODES

Federal Rules of Civil Procedure36(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,21,22

Federal Rules of Civil Procedure60(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2, 5-7, 20-23, 25

Federal Rules of Civil Procedure7(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

PLAINTIFFS' OPPOSITION TO DEFENDANT VALUATION COUNSELORS .MOTION FOR RECONSIDERATION

6-14-O40ppCBIZ Recon .Mot .wpd

1

2

3

4

5

6

7

8

9

10

11

1 2

13

1 4

15

16

1 7

18

19

20

21

22

23

24

25

26

27

28

Federal Rules of Civil Procedure72(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,8,25

Federal Rules of Civil Procedure36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,9,10,14,22,25

Federal Rules of Civil Procedure36(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,10-15,18,20

Federal Rules of Civil Procedure60 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,6,21,25

Federal Rules of Evidence408 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2

Local Rule26-1(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Local Rule72-2 .1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-5,25

PLAINTIFFS' OPPOSITION TO DEFENDANT VALUATION COUNSELORS .MOTION FOR RECONSIDERATIO N

6-14-040ppCBIZ Recon .Mot .wpd

Class Plaintiffs hereby submit their Opposition to Defendant Valuatio n

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Counselors Group Inc .'s (hereinafter "Defendant") Motion to Withdra w

Admissions Deemed Admitted and to Reconsider Mag . Chapman's Ruling . 1

1 . INTRODUCTION

Nearly one year after the Honorable Rosalyn M . Chapman issued the General

Discovery Order in this complex class action and after breaching four separate

discovery extension deadlines, Z and then serving woefully deficient responses to

stymie Plaintiffs' discovery efforts, 3 Defendant now brings this motion to

overturn, in its entirety, Judge Chapman's April 22, 2004 Order deeming

Plaintiffs' First Set of Requests for Admissions admitted in toto .

However, before Defendant can even ask this Court to entertain its motion fo r

' As a threshold matter, this Court should note that neither the Caption nor Notice ofDefendant's Motion states that Defendant seeks to amend its admitted responses . Despite itsdeficient Notice of Motion, however, Defendant argues in its motion that this Court should allowit to amend its admitted responses, and has even attached the proposed responses as Exhibit D .(Declaration of Jeffery L . Le Pere ("Le Pere Declaration") at 129 ; Exhibit D) . Furthermore,Defendant's Notice of Motion fails to mention either Fed. R. Civ. P. 36 or Fed. R. Civ. P. 60,although Defendant seeks relief under both Rule 36 and Rule 60 in its Motion . (Defendant'sMotion, pp .11 :1-4; 18 :22-23). Because Fed. R. Civ . P. 7(b) requires a motion to state "withparticularity" the grounds on which it is made and the relief or order sought, this Court must denyDefendant's ill-noticed Motion. Fed. R. Civ. P. 7(b); Kalis v . Colgate-Palmolive Co., 231 F.3d1049, 1059 (7th Cir . 2000) (holding that a formal motion to amend or withdraw admissions ismandatory) ; Steingut v. National City Bank of New York, 36 F.Supp. 486 (E.D.N.Y. 1941)(denying the plaintiff's removal motion due to insufficient notice of motion) ; or in thealternative, this Court should, at a minimum, preclude Defendant from arguing the unnoticedissue of amendment of its deemed admissions, and strike Defendant's Exhibit D in its entirety .

The Defendants' abusive discovery tactics are discussed in detail in the Declaration ofBrian Barry filed concurrently herewith ("Barry Declaration") and in 115-12 of Jill Betts'Declaration filed in support of the initial Petition for Order to Show Cause Why Plaintiffs'Requests for Admissions Should Not Be Deemed Admitted . For the Court's convenience, theBetts Declaration is attached Exhibit 1 the Barry Declaration .

3 See, In re Heritage Bond Litigation, 220 F.R.D. 624, 626-627 (C .D. Cal . 2004) (findingthat Defendant not only served tardy responses, but also served legally deficient responses) . SeeExhibit 6 to Barry Declaration .

PLAINTIFFS' OPPOSITION TO DEFENDANT VALUATION COUNSELORS .MOTION FOR RECONSIDERATIO N

6-14-04OppCBIZ Recon .Mot.wpd 1

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

reconsideration, it must first comply with the ten-day filing deadline mandated by

Local Rule 72-2.1 and this Court's Standing Order. Defendant's motion was

brought eleven days after the expiration of the ten-day mandatory filing deadline,

and thus violated Local Rule 72-2 .1 and this Court's Standing Order . On that

basis alone, this Court should dismiss this ill-timed motion . Moreover,

Defendant's late filing of the instant motion does not warrant relief under Fed . R.

Civ. P. 60(b) because (1) there is no "final judgment, order, or proceeding" that

has adjudicated the timeliness of Defendant's instant motion, and (2) defense

counsel's "misinterpretation of the local rules governing the timing of this motion"

is not a "mistake" or "excusable negligent" for purposes of Rule 60(b) .

In any event, even if this Court were to address the merits of Defendant' s

motion, Defendant has wholly failed to carry its burden of demonstrating that

Judge Chapman's April 22 Order was "clearly erroneous or contrary to law" as

required under this Court's Standing Order, Federal Statute', and the United State s

Supreme Court' .

Additionally, Defendant does not and cannot meet the two-prong test unde r

Fed. R . Civ. P. 36(b) to justify withdrawal or amendment of its deemed

admissions . Finally, under the applicable decisional law, Fed . R. Civ. P. 60(b)

does not relieve Defendant and/or defense counsel from sanctions for failing to

provide timely responses to Plaintiffs' requests for admissions .

For any and all of these reasons, Defendant's dilatory and meritless motion

must be denied .

1111

4 28 U . S.C. § 636(b)(1)(A)

5 Concrete Pipe & Prods, v . Const. Laborers Pension Trust, 508 U.S. 602, 623, 113 S .Ct .2264 (1993) (setting forth the standard of proving a decision is "clearly erroneous") .

PLAINTIFFS ' OPPOSITION TO DEFENDANT VALUATION COUNSELORS . MOTION FOR RECONSIDERATION

6-14-04OppCBIZ Recon .Mot .wpd 2

II . ARGUMENT

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

A. This Court Should Not Hear Defendant 's Dilatory Motion

1. Local Rule 72-2.1 Bars Defendant's Dilatory Motio n

In form and in substance, Defendant's motion for reconsideration seeks t o

overturn Judge Chapman's April 22 discovery order in its entirety .' However,

before Defendant can even ask this Court to entertain its motion for

reconsideration of Judge Chapman's April 22 discovery order, Defendant must

first comply with the ten-day filing deadline mandated by Local Rule 72-2 .1 .

Local Rule 72-2.1 states :

L.R. 72-2.1 Motions for Review ofNondispositive Rulings . Any partyobjecting under F .R.Civ.P. 72(a ) to a Magistrate Judge's ruling on apretrial matter not dispositive of a claim or defense must file a motion forreview by the assigned District Judge, designating the specific portions ofthe ruling objected to and stating the grounds for the objection . Suchmotion shall be filed within ten ( 10) days of an oral ruling which theMagistrate Judge indicates will not be followed by a written ruling, orwithin ten (10) days of service of a written ruling .

California Central District Local Rules, Rule 72-2 .1 (Emphasis added) . Here,

Judge Chapman's Order - a "nondispositive" discovery ruling - was entered o n

April 22, 2004. However, Defendant ' s motion for reconsideration was filed o n

" In pertinent part, the Caption of Defendant's motion reads : "NOTICE OF MOTIONAND MOTION OF Defendant VALUATION COUNSELORS GROUP INC TO WITHDRAWADMISSIONS DEEMED ADMITTED AND TO RECONSIDER MAG . CHAPMAN'SRULING." (Emphasis added) . As the title of Defendant's motion itself makes perfectly clear,Defendant is moving this Court "to reconsider Mag . Chapman's Ruling" which applies to all ofDefendant's tardy responses, i .e ., the entirety of Plaintiffs' First Set of Requests for Admissions .Therefore, if this Court were to allow the withdrawal of the admissions , the Defendant'stardy responses would stand . However, as noted in footnote 1 above, in its brief, theDefendant also requests that this Court allow it to serve brand new responses to Plaintiffs'requests for admission . These "proposed responses" are, in fact, across-the-board denials . SeeLe Pere Declaration at Ex . D . When considering this request, this Court should be aware thatcounsel for the Defendant has informed Plaintiffs' counsel that the defendant intends toultimately ADMIT a number of the requests for admission . See Barry Declaration at 1 14 .Consequently, if this Court were to permit Defendant to amend its answers as requested, in alllikelihood, another motion to amend will shortly follow .

PLAINTIFFS' OPPOSITION TO DEFENDANT VALUATION COUNSELORS .MOTION FOR RECONSIDERATIO N

6-14-04OppCBIZ Recon. Mot .wpd

May 14, 2004, eleven days after the expiration of the ten-day filing deadlin e

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

stipulated by Local Rule 72-2 .1 . ' As a result, Defendant's motion fo r

reconsideration was brought untimely, and thus violated Local Rule 72-2.1 . 8

The district court "has a large measure of discretion in interpreting an d

applying" its own local rules . Lance, Inc . v. Dewco Services, Inc., 422 F.2d 778,

784 (9th Cir. 1970) . Moreover, Judges in this District Court are not hesitant to

dismiss motions, as well as to impose terminating sanctions, such as dismissal,

against litigants and attorneys who ignore the filing deadlines mandated by Local

Rules . In Chism v. National Heritage Life Ins . Co., 637 F.2d 1328, 1331-1332

(9th Cir. 1981), the Ninth Circuit reviewed an order of the District Court for the

Central District of California wherein the plaintiff's case was dismissed for his

continual flouting of discovery rules, failure to comply with pretrial conference

obligations, and repeated violation of local court rules . On appeal, the Ninth

Circuit affirmed the district court's dismissal, noting :

7 Defense counsel's preening concession that "[V]aluation' s motion is filed a mereeleven days late," even if Local Rule 72-2 .1 applies (Le Pere Declaration, 9130 :15-16) (emphasisadded), is the glaring proof of his utter disdain for Federal and Local Rules .

8 Notwithstanding Judge Chapman's explicit finding that "the requests for admissionspropounded by class plaintiffs to defendant would merely narrow the issuesfor trial . . . ." In reHeritage Bond Litigation, 220 F.R.D. 624, 626 (C .D. Cal . 2004), in an ill conceived attempt tocircumvent the mandatory filing deadline it missed, Defendant mischaracterizes JudgeChapman's April 22 discovery order as a dispositive ruling (Defendant's Notice of Motion, 2 :5 ;Le Pere Declaration at ¶9[3 and 10) . Plainly, a Magistrate Judge's ruling on a pretrial matter isnondispositive if it is "not dispositive of a claim or defense." Local Rule 72-2 .1 (emphasisadded) . Unlike a summary judgment order, Judge Chapman's April 22 discovery order is not"dispositive" within the meaning of Local Rule 72-2 .1 because it has neither partially norcompletely disposed of Plaintiffs' negligence claim against Defendant . See, Plaintiffs'Opposition, II . ARGUMENT, B. 1 ., infra . Thus, Local Rule 72-2 .1 governs the timing ofDefendant's motion for reconsideration of Judge Chapman's April 22 discovery order . Moreover,this Court's Standing Order does not distinguish between "dispositive" and "non-dispositive"orders for purposes of the ten-day filing deadline . Thus, this Court would have to go to greatlengths to deem this motion anything but untimely .

PLAINTIFFS' OPPOSITION TO DEFENDANT VALUATION COUNSELORS .MOTION FOR RECONSIDERATION

6-14-04OppCBIZ Recon . Mot.wpd 4

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Appellant showed continued disregard for his obligations to the cour tby late filing of oppositions to [the defendant ' s] motions. The local rulesestablished time limits to provide the cou rt adequate oppo rtunity toconsider papers filed by the parties . Appellant 's disregard of these rulesfrustrated that salient purpos e

Chism, supra, 637 F.2d at 1332 (emphasis added .) ; 9 see also, Land v . Denny's,

Inc., 1997 U.S . App. LEXIS 36421 at **2-3 (9th Cir. 1997) (affirming the District

Court for the Central District of California's dismissal, and imposition of

monetary sanctions, against the plaintiffs and their attorneys for their "clear

pattern of dilatory behavior, the numerous missed deadlines, and failure to comply

with Federal and Local Rules ."). Here, Local Rule 72-2.1 establishes the ten-day

time limits to provide the court adequate opportunity to consider papers filed by

the parties for review of a Magistrate Judge's nondispositive ruling . Clearly,

Defendant's conscious disregard of the mandatory filing deadline utterly

"frustrated that salient purpose ." Chism, supra, 637 F.2d at 1332 . Therefore, this

Court should deny Defendant's motion for reconsideration of Judge Chapman's

April 22 discovery order without further deliberation .

2. Fed. R. Civ . P. 60(b ) Does Not Apply to Relieve Defendant forFiling Dilatory Motion

In pertinent part, Fed . R . Civ. P. 60(b) states ". . . the court may relieve a party

or a party's legal representative from a final judgment, order, or proceeding for

the following reasons : (1) mistake, inadvertence, surprise, or excusable neglect . . .

." Fed. R. Civ. P. 60(b) (emphasis added). In this case, Defendant asks the Court

to grant relief for the late filing of its motion for reconsideration because o f

defense counsel's "misinterpretation of the local rules governing the timing of this

' Chism was subsequently overruled on the grounds entirely unrelated to the NinthCircuit's ruling on the plaintiff's violations of Local Rules . Land v. Denny's, Inc ., 1997 U.S .App. LEXIS 36421 at *3 (9th Cir . 1997) (noting that "Chism v . National Heritage Life Ins . Co .,637 F . 2d 1328, 1331 (9th Cir . 1981) overruled on other grounds by Bryant v . Ford Motor Co . ,844 F.2d 602 (9th Cir, 1987)) ." (Emphasis added) .

PLAINTIFFS' OPPOSITION TO DEFENDANT VALUATION COUNSELORS .MOTION FOR RECONSIDERATION

6-14-04OppCBIZ Recon .Mot.wpd 5

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

motion ." (Defendant's Motion, p . 19:23-26; Le Pere Declaration at1[31) . 10

However, Rule 60 is not a catch-all provision authorizing relief for every

imaginable misconduct of litigants and attorneys . Before Rule 60(b) can be

invoked as grounds for relief, there must exist "a final judgment, order, or

proceeding ." Fed. R. Civ . P. 60(b) . Plainly, absent "a final judgment, order, or

proceeding" adjudicating the timeliness of Defendant's instant motion, this Court

has no discretion to grant any relief under Fed . R. Civ. P. 60(b) for Defendant's

late filing of its motion for reconsideration . Here, a hearing for Defendant's

motion for reconsideration is set for June 28, 2004 ; and there is no "final

judgment, order, or proceeding" that has adjudicated the timeliness of Defendant's

instant motion . The statutory requirement that the court may grant relief under

Rule 60(b) only from "a final judgment, order, or proceeding" is the undoubted

law, axiomatic and elementary. Fed. R. Civ. P. 60(b) . Indeed, defense counsel's

interpretation of Rule 60 (and Local Rules) is mystifying .

Furthermore, defense counsel's "misinterpretation of the local rules

governing the timing of this motion" does not constitute "mistake" or "excusable

negligent" for purposes of Rule 60(b) . Chang v . Smith, 778 F.2d 83, 86 (1st Cir.

1985). In Chang, 778 F.2d 86, the First Circuit held:

Rule 60(b) cannot be used to relieve a litigant from improvidentstrategic choices . Marshall v. Board of Education, 575 F.2d 417, 424(3(~rd Cir . 1978) ; Federal's, Inc. v. Edmonton Investment Co., 555 F.2d577, 583 (6th Cir .1977) ; Lubben v. Selective Service System LocalBoard No. 27, 453 F.2d 645, 651-52 (1st Cir . 1972). Furthermore,ignorance or mistake of law is not a "mistake "for purposes ofRule60(b) . United States v . O'Neil, 709 F.2d 361, 373 (5th Lir . 1983) .Nor is it "excusable neglect" . United States v . Erdoss, 440 F.2d1221, 1223, cert. denied, 404 U.S . 849, 92 S . Ct. 83 (2nd Cir . 1971) .

1 0 Le Pere Declaration at 131 states "[I] became aware of the potential missed deadlinewhen securing a motion date and this Court's clerk reminded to revisit the Local Rules . Uponreconsidering the Local Rule, I then proceeded to modify this motion to incorporate Rule 60 as a

basis for the Court to grant Valuation's motion . "PLAINTIFFS' OPPOSmON TO DEFENDANT VALUATION COUNSELORS .MOTION FOR RECONSIDERATIO N

6-14-04OppCBIZ Recon .Mot.wpd 6

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Accordingly , defense counsel's ignorance and/or mistake of "the local rule s

governing the timing of this motion" is not a "mistake" for purposes of Rule 60(b) .

Chang, supra, 778 F.2d at 86 . Nor is it "excusable neglect." Ibid. Consequently,

Rule 60(b) cannot be used to relieve Defendant from its late-filing of the instant

motion. Id. at 86 .

3. This Court's Standing Order Bars Defendant's Dilatory Motion

Furthermore, Defendant's late-filing of its motion for reconsideration violate s

this Court's Standing Order. This Court's Standing Order at §4 states, in part :

Any party may file and serve a motion for review and reconsideration beforethis Court . The moving party must file and serve the motion within ten (10)days of the service of a written ruling . . . .

Judge Dickran Tevrizian's Standing Order With Regard to Newly Assigned Cases .

(Emphasis added) . ' 1 Defense counsel fails to explain how he "misinterpreted"

this Court's Standing Order which clearly makes the ten-day deadline applicable

to ANY Order from the Magistrate and is not limited to non-dispositive motions .

Plainly, Defendant's violation of this Court's Standing Order provides an

alternative ground for dismissing Defendant's dilatory motion .

4. Public Policy Mandates Dismissal of Defendant 's Dilatory Motion

Public policy militates against permitting Defendant's tardy motion to remai n

on this Court's docket . Undeniably, Defendant's motion for reconsideration was

necessitated by Defendant's and its counsel's own, multiple breaches of the

statutory discovery deadlines, Court ordered deadlines and the discovery extension

deadlines.12 Essential to this Court's ability to manage its own affairs and

maintain its institutional integrity is the due diligence that every litigant an d

11 A true and correct copy of Judge Dickran Tevrizian' s Standing Order With Regard toNewly Assigned Cases issued in this action is attached as Exhibit 5 to Barry Declaration .

12 See Barry Declaration at 191 11-18 and Exhibit 1 .PLAINTIFFS' OPPOSITION TO DEFENDANT VALUATION COUNSELORS . MOTION FOR RECONSIDERATIO N

6-14-04OppCBIZ Recon .Mot .wpd 7

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

attorney must exercise in complying with statutory and judicial deadlines . Yet,

this simple but critical point is seemingly lost on Defendant and its counsel .

Tellingly, even now, Defendant's motion for reconsideration was filed eleven days

after the applicable filing deadline had lapsed . Thus, allowing Defendant's

dilatory motion to remain on this Court's docket would do a great disservice to the

federal judicial system. Chism, 637 F .2d at 1332 (noting that the plaintiff's

disregard for the filing deadlines established by local rules "contributed to court

congestion by wasting valuable court time," and that "[I]ndulgent toleration for the

misconduct of lawyers and litigants is a luxury the overcrowded federal courts

cannot afford.") For all the foregoing reasons, this Court should order

Defendant's motion for reconsideration taken off calendar .

B. Defendant Fails to Demonstrate that Judge Chapman's DiscoveryOrder Is Clearly Erroneous or Contrary to Law

Even if this Court were to reach the merits of Defendant's motion fo r

reconsideration, Defendant has failed to demonstrate that Judge Chapman's April

22 Order was "clearly erroneous or contrary to law ." Fed. R. Civ. P. 72(a)

provides that a Magistrate Judges' ruling on non-dispositive motions may be set

aside or modified only if the District Court finds it to be "clearly erroneous" or

"contrary to law ." Grimes v. City and County of San Francisco, 951 F.2d 236, 241

(9th Cir . 1991) . This statutory standard for ruling on motion for reconsideration is

also reflected in this Court's Standing Order, which provides "[T]he decision of

the Magistrate Judge shall be final, subject to modification only where the

Magistrate Judge's order is clearly erroneous or contrary to law ." See, Judge

Dickran Tevrizian's Standing Order With Regard to Newly Assigned Cases .

In Green v. Baca, 219 F.R .D. 485, 489 (C .D. Cal . 2003), the court discussed

this standard of review:

The clearly erroneous standard , which applies to a magistrate judge'sPLAINTIFFS' OPPOSITION TO DEFENDANT VALUATION COUNSELORS .MOTION FOR RECONSIDERATIO N

6-14-O4OppCBJZ Recon .Mot.wpd 8

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

findings of fact , is "significantly deferential , requiring 'a definite andfirm conviction that a mistake has been committed .' ' Concrete Pipe& Prods. v. Constr. Laborers Pension Trust, 508 U .S . 602, 623, 113S .Ct. 2264, 124 L.Ed.2d 539 (1993 ) ; Security Farms v. IntlBrotherhood of Teamsters ,_ 124 F. 3d 999, 1014 (9th Cir.1997) . Incontrast , "[t]he 'contrary to law ' standard . . . permits independentreview of purely legal determinations by the magistrate 1ud~~ge."Fidelity & Deposit Company ofMaryland, supra, 196 F .R.I . at 378(citing Haines, supra, 975 F .2d at 91) .

Under Rule 36, requests for admission are automatically deemed admitted i f

a response is not timely served. Sudderth v. City and County of San Francisco,

et.al . , 2001 WL 764929 at fn 1 (N .D . Cal. June 27, 2001) . Here, Judge Chapman's

Order was an affirmation of the self-executing nature of Fed. R. Civ . P . 36 with

respect to Defendant's untimely responses to Plaintiffs ' requests for admissions . In

re Heritage Bond Litigation , 220 F.R.D . 624, 626 (C .D. Cal. 2004) (citing Asea,

Inc. v. Southern Pac. Transp . Co., 669 F.2d 1242, 1247 (9th Cir . 1981)) .

Specifically, Judge Chapman expressly held :

As an initial matter, defendant responded 12 days late to class plaintiffs'first set of requests for admissions . For this reason alone , all ten requestsfor admissions in the first set of requests for admissions should be deemedadmitted .

Id. (emphasis added) .13 Clearly, Judge Chapman found, and Defendant conceded,

that its responses to Plaintiffs' requests for admissions were 12 days late and

violated Fed. R . Civ. P. 36. Given the self-executing nature of Rule 36, under no

stretch of the imagination can Judge Chapman's Order be viewed as " contrary to

law ." Rather, Judge Chapman's Order simply avows the law .

Furthermore, Fed. R . Civ. P. 36(b) authorizes the court , in its discretion, t o

permit withdrawal or amendment of matters deemed admitted pursuant to Fed . R .

Civ . P. 36(a) . In pertinent part, Fed. R. Civ. P. 36(b) states :

13 Plaintiffs note that the responses were served twelve days late after four extension shad been given to the defendants - each of which was ignored. See Barry Declaration at 11[11 .for an abbreviated history of this discovery dispute betwee n the parties .

PLAINTIFFS' OPPOSIflON TO DEFENDANT VALUATION COUNSELORS .MOTION FOR RECONSIDERATIO N

6-14-04OppCBIZ Recon . Mot .wpd 9

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Any matter admitted under this rule is conclusively established unlessthe court on motion permits withdrawal or amendment of theadmission. . . . the court may permit withdrawal or amendment when thepresentation of the merits of the action will be subserved thereby andthe party who obtained the admission fails to satisfy the court thatwithdrawal or amendment will prejudice that party in maintaining theaction or defense on the merits .

Fed. R. Civ . P. 36(b). (emphasis added) . Thus, the language of Rule 36 itself i s

clear: the decision to permit withdrawal or amendment of matters deemed admitted

lies solely within the discretion of the Court. Here, after analysis of the effects of

the admissions on the defendant14, Judge Chapman specifically refused to invoke

the court's discretionary power, noting :

defendant asks the Court to use its equitable powers to find itsresponses to the requests for admissions to be timely . The Courtdeclines to do so . . . . such discretion should be exercised only"[uJnder compelling circumstances, " i .e ., where "there is nosufficient reason to orce the District Court to grant summary,judgment . . . where no prejudice is shown." Moosman, 358 F.d at688 . . . . Here, the requests for admissions propounded by classplaintiffs to defendant would merely narrow the issues for trial--oneof the purposes of Rule 36.

In re Heritage Bond Litigation, 220 F.R.D. at 626 (C.D. Cal . 2004) . (emphasis

added). Clearly, Judge Chapman did not find any "compelling circumstances"

which would have justified the Court's use of its equitable power to grant relief .

Therefore, Judge Chapman's "findings of fact" are clearly not erroneous . Green v.

Baca, 219 F.R .D. 485, 489 (C .D. Cal. 2003) . Plainly, Defendant's Motion for

Reconsideration is nothing more than a reassertion of stale facts which Judge

Chapman already considered and deemed insufficient to constitute "compellin g

14 In its Response to Plaintiffs' Petition for an Order to Show Cause Why Plaintiffs'Requests for Admission Should Not be Deemed Admitted, the defendant claimed argued that"[t]he practical effect of denying an extension in these circumstances would be the equivalent tothe ultimate sanction and prevent [the defendant] from putting forward a defense ." In addition,on April 22, 2004, at the hearing on the Order to Show Cause, Judge Chapman questionedcounsel to the parties on this very issue . See Barry Declaration at 1 13 . Thus, it is clear thatJude Chapman considered the potential effects on Defendant when issuing the A ri l 22 Order.

PLAINTIFFS' OPPOSITION TO DEFENDANT VALUATION COUNSELORS .MOTION FOR RECONSIDERATION

6-14-44OppCBIZ Recon .Mot.wpd 10

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

circumstances ."

As a discretionary decision, the Defendant must prove Judge Chapman' s

Order to be "clearly erroneous" and this Court must have "a definite and firm

conviction that a mistake has been committed ."' Concrete Pipe, supra, 508 U.S .

602, 623 (1993) . Notably, in its motion for reconsideration, Defendant neither

argues nor cites any authority to demonstrate that Judge Chapman's ruling was

"clearly erroneous ." No evidence has provided upon which this Court can rely to

firmly conclude that a "mistake has been committed." It is apparent that the

Defendant cannot meet its burden and, consequently, this Court should deny

Defendant's motion and affirm Judge Chapman's April 22 Order in its entirety .

C. Defendant Fails to Meet the Two-Prong Test Under Fed . R . Civ. P.36(b) to Justify Withdrawal or Amendment of Its Admissions

Furthermore, even if this Court reviews the matter de novo, it is clea r

defendant has wholly failed to meet the statutory requirements under Fed . R. Civ .

P. 36(b) for permitting withdrawal or amendment of its admissions . As a

threshold matter, it is critical for this Court to note the following :

First, as Defendant agrees, the test under Fed . R . Civ. P . 36(b) is a two-prong

test . See, Sonoda v. Cabrera, 255 F .3d 1035, 1039 (9th Cir. 2001) . As shown

below, Defendant has not and can not even meet the first prong of the test .

Second, in resolving the issue of whether Defendant's admitted response s

have the preclusive effect on its case, only the admitted responses themselves are

germane to this Court's analysis. Remarkably, in a misguided attempt to cloud the

Court's consideration of this crucial issue, Defendant strenuously and erroneously

asserts that its admitted responses, "combined with" Plaintiffs' deposition

testimonies , have the preclusive effect on the presentation of the merits of its case .

(Defendant's Motion, pp. 13 :1-7; 14 :1-14; 17 :14-15 ; Le Pere Declaration at 1117 ;

20; 21 ; 22) (Emphasis added). As Rule 36(b) unequivocally stipulates, however ,PLAINTIFFS' OPPOSITION TO DEFENDANT VALUATION COUNSELORS .MOTION FOR RECONSIDERATIO N

6-14-04OppCBJZ Recon.Mot .wpd 11

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

the court may permit withdrawal or amendment of admitted matters only when

"the presentation of the merits of the action will be subserved thereby . . . ." Fed.

R. Civ. P. 36(b) (Emphasis added) . Given the limiting language "thereby" in Rule

36(b), it is statutorily mandatory that this Court, when evaluating the potential

preclusive effect of the admissions, consider nothing but the admissions

themselves . For this reason, this Court should strike any and all references to

Plaintiffs' deposition testimonies in Defendant's instant motion and the supporting

Le Pere Declaration .

Third, defense counsel's euphemistic references to Plaintiffs ' increased offe r

to settle (Defendant's Motion, p . 14:13-14; Le Pere Declaration at 112) are as

irrelevant as they are unethical . Defendant cites no authority for permitting

withdrawal of admissions merely because a plaintiff "increased" her offer to settle .

To the contrary, the principle of judicial economy strongly encourages settlement

negotiations among the parties in civil litigation . If anything, Plaintiffs' increased

offer to settle is, in part, reflective of the general deterrent effect of the evidentiary

sanctions imposed against a recalcitrant party -- such as Defendant - whose

repeated discovery derelictions have caused undue delay in litigation and material

prejudice to other parties . Therefore, Plaintiffs' increased offer to settle is not a

valid basis, either factual or legal, that justifies Defendant's withdrawal or

amendment of the admissions . For these reasons, this Court should strike any and

all references to Plaintiffs' settlement demand in Defendant's instant motion and

the supporting Le Pere Declaration . 1 5

15 Defense counsel's deliberate disclosures of the key terms of Plaintiffs' settlementdemand violated the Fed . R. Evid. 408 confidentiality provision in Plaintiffs' demand letter,which expressly prohibits Defendant and defense counsel from disclosing the contents ofPlaintiffs' demand letter in this litigation for any purpose . Now that defense counsel hasbreached the confidentiality provision, it is necessary for Plaintiffs to provide this Court with afull picture of the context in which Plaintiffs increased their settlement demand . Aside from the

PLAINTIFFS' OPPOSITION TO DEFENDANT VALUATION COUNSELORS .MOTION FOR RECONSIDERATION

6-14-04OppCBIZ Recon .Mot.wpd 12

As demonstrated below, Defendant cannot meet the two-prong test under Fed .

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

R. Civ. P. 36(b). Accordingly, Defendant's motion must be denied to the exten t

that it is predicated upon, and/or pursuant to, Fed . R. Civ . P. 36(b).

1. Admissions Do Not Subserve Defendant's Case On Its Merit s

The merits of a party's claim are necessarily determined by the applicabl e

substantive law . Anderson v . Liberty Lobby, Inc., 477 U.S . 242 (1986) . A prima

facie case of Plaintiff's negligence claim has four elements : duty, breach,

causation, and damage . Nally v. Grace Community Church, 47 Ca1.3d 278, 253

(1988) ; Turpin v. Sortini, 31 Ca1.3d 220, 229-230 (1982); Budd v. Nixen, 6 Cal .3d

195, 200 (1971) . Therefore, to meet its burden of demonstrating that the

admissions subserve its case on the merits, Defendant must show that the

admissions "effectively bar, negate, or practically eliminate" Defendant from

disputing all of the four elements of a negligence claim. Baker v. Potter, 21 2

admissions granted by Judge Chapman, Plaintiffs recently discovered new documentary andtestimonial evidence of Defendant's negligence in the Heritage bond offerings . For instance,Plaintiffs discovered an appraisal of the Heritage Chicago facility Defendant conducted in 2000,which severely undermines the legitimacy of Defendant's earlier appraisal of the same propertyin 1997. In 1997, Defendant appraised the property at $17 million assuming $6 million inrenovations . In fact, $8 million was spent in renovations and yet this same Defendant appraisedthe property "as-is" at only $6 .4 million in 2000 . Moreover, the deposition testimony ofdefendant Larry Rubin suggests that the appraisers were given the option to choose theirvaluation from a range of prefixed dollar figures . This is supported by the deposition testimonyof Dan Gottlieb who stated that he came to question the objectivity and independence ofZelenkofske, the sister subsidiary of Defendant that performed financial feasibility studies for theHeritage bond offerings . Furthermore, Plaintiffs have discovered evidence of kickbacks fromMr. Zelenkofske to Kasirer in 1996 and 1997 . Given all the new evidence of Defendant'sliability, and Class Plaintiffs' loss of ninety million+ dollars, Plaintiffs' current settlementdemand of $12.5 million - which represents only half of Defendant's $25 million insurancepolicy - is indeed reasonable . It is unfortunate that defense counsel knowingly divulgedPlaintiffs' confidential settlement demand in his Declaration, as well as in Defendant's motion,not as part of a reasoned application of the law to the facts, but rather as a questionable litigationtactic designed to exploit the opportunity presented by Plaintiffs' offer to settle .

PLAINTIFFS' OPPOSITION TO DEFENDANT VALUATION COUNSELORS .MOTION FOR RECONSIDERATIO N

6-14-04OppCBIZ Recon.Mo[.wpd 13

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

F .R.D. 8, 13-14 (D .D. C. 2002) (emphasis added) (internal citations omitted) .

Thus, if the admissions leave room for Defendant to contest any of the four

elements of Plaintiffs' negligence claim, Defendant cannot satisfy the first prong

of the test under Fed . R. Civ . P. 36(b), i .e., the requisite showing that the

admissions subserve Defendant's case on its merits . Davis v. Noufal, 142 F.R.D.

258, 259 (D .D.C. 1992)(finding in a wrongful eviction suit that the merits prong

was met because the landlord's requested admissions "negated all of [plaintiff

tenant]'s allegations") (emphasis added .) ; Rabil v. Swafford, 128 F.R.D. 1, 2

(D.D .C. 1989) (finding in a legal fee dispute that "the first half of the test is clearly

satisfied since the effect of upholding the admissions [acknowledging debt] would

be to practically eliminate any presentation of the merits") (emphasis added) .

For example, in Baker, the employer's admission that the employee was an

individual with a disability was conclusively established by the employer's failure

to respond in a timely manner to the employee's request for admissions . Baker,

supra, 212 F.R.D . at 12 . However, noting that other elements of the employee's

disability discrimination claim remained to be established, the Baker court

concluded that the employer's admission did not subserve its case on the merits .

Id. at 13-14. As a result, the Baker court denied the employer's motion for leave

to withdraw the admission and substitute late-filed response since the employer

failed to satisfy the first prong of the Rule 36(b) test to justify withdrawal . Id.

Similarly, in 999 v. C.I.T. Corp., 776 F.2d 866 , 870 (9th Cir . 1985 ), a breach

of contract case, the Ninth Circuit affirmed the district court's denial of the

defendant's motion to withdraw a Rule 36 admission regarding the existence of

the contract in dispute . 999, supra, F.2d at 870. Notably, the Ninth Circuit's

ruling in 999 was based largely on the specific finding that the defendant "was not

prevented from contesting the existence of [the contract]" because "[t]he tria l

PLAINTIFFS' OPPOSITION TO DEFENDANT VALUATION COUNSELORS .MOTION FOR RECONSIDERATION

6-14-04OppCBIZ Recon .Mot .wpd 14

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

court never ruled [the admitted matter] constituted per se evidence of an

agreement . . . ." Id. at F.2d at 870, fn . 1 .

Pursuant to the foregoing applicable legal principles, to meet the first pron g

of the Rule 36(b) test, Defendant must prove that the deemed admissions subserve

its case on the merits . As fully analyzed below, the deemed admissions, taken

alone or together, do not "effectively bar, negate, or practically eliminate"

Defendant's case on its merits . Therefore, Defendant cannot show that the

admissions subserve its case on the merits . Thus, Defendant has failed to meet the

first prong of the Rule 36(b) test to justify withdrawal .

First, none of Plaintiffs' requests for admissions precludes Defendant fro m

contesting the existence of a duty of care in this case. The threshold question

raised in Plaintiffs' negligence claim is whether Defendant owed to Plaintiffs a

duty of care. Duty is a question of law . Merrill v. Navegar, Inc., 26 Cal .4th 465,

477 (2001) ; Bily v. Arthur Young & Co., 3 Cal.4th 370, 397 (1992) ; Lompoc

Unified School Dist. v. Superior Court, 20 Cal.App.4th 1688, 1697 (1993) ("The

issue of duty to the plaintiff is very definitely one of law, and can be nothing

else."). Thus, the issue of duty is within the province of the court, determined not

by the parties, but by the trial judge .

Here, the word "duty" does not even appear in any of Plaintiffs' requests for

admissions . Hence, Plaintiffs' requests for admissions do not "effectively bar,

negate, or practically eliminate" Defendant from contesting the issue of duty .

Baker, supra, 212 F.R.D. at 14. Furthermore, just like in 999, the court in this

case has not issued any ruling that the admissions automatically show a duty of

care owed by Defendant to Plaintiffs . 999, at F.2d at 870, fn . 1 . Clearly, because

Plaintiffs' requests for admissions do not encompass the issue of duty, Defendant

is free to raise and argue that issue . As a result, Defendant's case is not subserve d

PLAINTIFFS' OPPOSITION TO DEFENDANT VALUATION COUNSELORS .MOTION FOR RECONSIDERATION

6-14-O40ppCBIZ Recon .Mot.wpd 3- 5

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

on its merits by the admissions . Baker, supra, 212 F.R.D . at 13-14 (holding that

the merits of a case were not subserved by the admission if there remained othe r

elements to be established) .

Second, Plaintiffs' requests for admissions do not "effectively bar, negate, or

practically eliminate" Defendant from litigating the issue of breach . Baker, supra,

212 F.R.D. at 14. Breach occurs when a defendant's conduct falls below the

applicable standard of care . People v. Young, 20 Cal .2d 832 (1942). Where, as

here, the defendant is a professional, a special standard of care to which similar

professionals practicing in similar communities are held applies . Fred M. Wells,

Inc. v. Marshall & Stevens, 218 Cal.App .2d 256, 258-259 (1963) (holding that a

property appraiser was a professional and must use the degree of skill and care and

the methods that are customarily used by professional appraisers of that type of

property in that community) ; Soderberg v. McKinney, 44 Cal .App.4th 1760, 1763

(1996) (finding that realty appraiser hired by mortgage broker can be held liable

for professional negligence) .

Therefore, in order for the admissions to have the preclusive effect on th e

issue of breach, they must first conclusively establish the scope and degree of

Defendant's duty of care . Granted, Plaintiffs' requests for admissions inquire

about Defendant's specific misconduct in various instances concerning the

feasibility studies and appraisals Defendant performed in connection with the

Heritage bond offerings. Undeniably, however, none of the admissions has

conclusively established the scope and degree of the duty Defendant owed to

Plaintiffs . For instance, Plaintiffs' requests for admissions do not address the

issue of similar locality, the effect of Defendant's specialization, or the nature of

the professional-client relationship (in fact, it is often expert testimonies that are

used to show the standard of care applicable to professionals .) Without

PLAINTIFFS' OPPOSITION TO DEFENDANT VALUATION COUNSELORS .MOTION FOR RECONSIDERATIO N

6-14-O4OppCBIZ Recon .Mot .wpd 16

1

2

3

4

5

6

7

8

9

to11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

establishing the standard of care applicable to Defendant as a realty

appraiser/feasability consultant, Defendant's misconduct, although deemed

admitted, may not be sufficient to meet the element of breach in an action for

professional negligence . Therefore, contrary to Defendant's assertions, Plaintiffs'

requests for admissions do not preclude Defendant from contesting the issue of

breach . Baker, supra, 212 F.R.D. at 14 .

Third, Plaintiffs' requests for admissions do not address the question of actua l

or legal causation . As noted in the preceding sections , Defendant illogically and

improperly relies on Plaintiffs ' deposition testimonies to argue the preclusive

effect of the admissions on the issue of causation . (Defendant's Motion , pp. 13:1-

7 ; 14:1-14 ; 17:14-15 ; Le Pere Declaration at 1117, 20, 21, 22) . Defendant's

repeated use of evidence outside the admitted matters highlights its inability to

prove the admissions alone are sufficient to "effectively bar, negate, or practically

eliminate" Defendant from arguing the issue of causation . Baker, supra, 212

F.R.D. at 14 .

Fourth, Plaintiffs' requests for admissions do not touch the issue of damage .

Clearly, none of Plaintiffs' requests for admissions asks Defendant to admit to any

liquidated amount of damages Defendant is liable for . Therefore, the admissions

cannot "effectively bar, negate, or practically eliminate" Defendant from making

the argument that its conduct, even if wrongful, did not result in any damage to

Plaintiffs . Baker, supra, 212 F .R.D. at 14.

Fifth, Plaintiffs ' requests for admissions do not preclude Defendant from

asserting comparative negligence as a defense. A defense of comparative

negligence may be asserted in a professional negligence action . Easton v .

Strassburger, 152 Cal .App.3d 90 (1984); Martin v. Hall, 20 Cal.App.3d 414,42 8

(1971). Here, the admissions encompass Defendant ' s own misconduct, as well as

PLAINTIFFS' OPPOSITION TO DEFENDANT VALUATION COUNSELORS .MOTION FOR RECONSIDERATION

6-14-04OppCBIZ Recon . Mot.wpd 17

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

the undue influence Heritage insiders exerted on Defendant . Hence, rather than

precluding Defendant from asserting comparative negligence as a defense, the

admissions actually facilitate Defendant's efforts (if any) to file cross-claims

against other parties complicit in the Heritage debacle .

Lastly, it is again worth noting that Judge Chapman wrote in her April 2 2

discovery order : "the requests for admissions propounded by class plaintiffs to

defendant would merely narrow the issues for trial. . . ." In re Heritage Bond

Litigation, 220 F.R.D . 624, 626 (C .D. Cal . 2004) (Emphasis added) . Thus, Judge

Chapman has opined that the admissions, in and of themselves, do not have the

preclusive effect on Defendant's presentation of its case on the merits .

Based on all the foregoing analysis, there is little doubt that the deeme d

admissions, taken alone or together, do not "effectively bar, negate, or practically

eliminate" Defendant's case on its merit . Baker, supra, 212 F.R.D. at 14.

Consequently, if "the court concludes . . .the admissions would not subserve the

presentation of the merits of this case," it "need go no further" because "both

prongs of the Rule 36(b) test must be met to justify withdrawal ." Id. at 14 .

2. Defendant's Withdrawal or Amendment of Its Admissions WillPrejudice Plaintiffs

In any event, if this Court finds it necessary to analyze the second prong of th e

Rule 36 (b) test , it should be "cautious in exercising [its] discretion to permit

withdrawal or amendment of an admission ." 999 v. C.LT. Corp., 776 F.2d 866,

869 (9th Cir. 1985). Although courts are generally more likely to find prejudice

when withdrawal of admissions is sought in the middle of trial, there is no per se

rule that withdrawal must be permitted as long as it is requested before trial . In

fact, the Ninth Circuit upheld the district court's denial of a motion for withdrawal

of deemed admissions which was brought weeks before trial . Asea, Inc. v.

Southern Pacific Transp. Co., 669 F.2d 1242, 1245 (9th Cir. 1981 ) (denyingPLAINTIFFS' OPPOSITION TO DEFENDANT VALUATION COUNSELORS . MOTION FOR RECONSIDERATIO N

6-14-04OppCBIZ Recon .Mot.wpd 18

motion to withdraw deemed admissions brought five weeks prior to trial) . As a

2

3

4

5

6

7

8

9

to11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

result, Defendant's withdrawal or amendment of its deemed admissions cannot b e

justified merely because it was sought before trial .

In evaluating the prejudice that may result from withdrawal or amendment of

deemed admissions, courts have emphasized the relevance of the timing of

withdrawal. However, courts look to the timing of withdrawal, not because the

timing of withdrawal itself provides a bright-line rule for determining prejudice,

but because the amount of time available to the requesting party to discover new

evidence to prove the withdrawn admissions reflects the increased difficulty in

conducting unforeseen discovery . Sonoda, supra, 255 F.3d at 1039 (noting that

prejudice "relates to the difficulty a party may face in proving its case") . While

the timing of withdrawal is relevant to the prejudice analysis, the complexity of

legal issues and multiplicities of parties and witnesses in a class action, like the

present case before this Court, often dramatically affect the requesting party's

ability to conduct discovery after deemed admissions are withdrawn or amended .

Recognizing the legal and factual complexity inherent in a class action, Loca l

Rule 26-1(a) of this District Court allows counsel to propose to the Court

modifications of the discovery procedures in the Manual For Complex Litigation

to facilitate the management of a particular action. Local Rule 26-1(a) . It is for

this reason, too, that Judge Chapman issued the General Discovery Order, and this

Court granted a two-month extension of the discovery cutoff in this case .

Obviously, Defendant is not the only defendant in this case ; and Plaintiffs' claim

against Defendant is not the only claim Plaintiffs need to prove . When Defendant

points to the two-month discovery extension, it seems to forget that the discovery

extension was granted one and a half years after discovery had commenced . This

Court did not grant the two-month discovery extension so that Defendant coul d

PLAINTIFFS ' OPPOSITION TO DEFENDANT VALUATION COUNSELORS MOTION FOR RECONSIDERATION

6-14-04OppCBIZ Recon .Mot .wpd 19

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

use it to withdraw or amend its deemed admissions ; rather, it was done to allow

diligent parties more time to better prepare their case for trial . It bears noting that

this Court is not dealing with grand legal theories, but with Defendant's tardy

responses to less than a dozen requests for admissions Plaintiffs propounded in

January! Thus, if this Court were to permit Defendant's withdrawal of its

admissions, it would not only tolerate, but proliferate Defendant's habitual

discovery derelictions . 16

In sum, Defendant's motion to withdraw its admissions, if granted, would

result in substantial, material prejudice to Plaintiffs, not only because of the

unavailability of the key witnesses, but also for the reason of Defendant's

unabated discovery derelictions . As a result, Defendant has wholly failed to meet

the two-prong test under Fed. R. Civ. P. 36(b) to justify withdrawal or amendment

of its deemed admissions . Accordingly, Defendant's motion must be denied to the

extent that it is predicated upon, and/or pursuant to, Fed . R. Civ . P. 36(b) .

D. Fed. R. Civ. P. 60(bDoes Not Apply to Relieve Defendant forFailure to Provide Timely Responses to Plaintiffs' Requests forAdmissions

Notably, Defendant asks this Court to apply Rule 60(b) to excuse tw o

missed deadlines : first, Defendant's late filing of the instant motion . (Defendant' s

Motion, 119:23-26) ; second, Defendant's failure to file timely responses to the

16 Defendant's tardy responses to Plaintiffs' First Set of Requests for Admissions is notan isolated incident. Rather, the untimely responses are consistent with Defendant's systematicand calculated litigation tactics instituted to stymy Plaintiffs' discovery efforts . For example,although Plaintiffs served their first request for documents on December 2002, nearly one and ahalf years later, on March 18, 2004, Defendant produced documents in response thereto .Additionally, in April 2004 - one month after Plaintiffs uncovered evidence that Defendantperformed four (4) appraisals on the Heritage facilities in 2000 -- Defendant produced documentsrelating to these appraisals and to their 1998 appraisal of the Sarasota facility . See BarryDeclaration at ¶915(c)-(e) . Viewed in the proper context, these facts indicate that Defendant'sunabated discovery derelictions, in and of themselves, have already prejudiced Plaintiffs'preparation of their case for trial .

PLAINTIFFS' OPPOSITION TO DEFENDANT VALUATION COUNSELORS .MOTION FOR RECONSIDERATIO N

6-14-04OppCBIZ Recon .Mot.wpd 20

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

RFA's after four extensions were given ." As shown above in Section A(2),

Defendant's late filing of the instant motion does not warrant relief under Rule 60 .

Here, the Court should focus its analysis on Defendant's failure to serve timely

responses to Plaintiffs' requests for admissions .

Defendant's argument that Rule 60(b) provides relief for its failure to serv e

timely discovery responses finds no support in any case law . Quite to the

contrary, courts have found it improper to apply Rule 60(b) to relieve a party for

failure to make timely response under the requirements of Rule 36(a), on the

ground that Rule 60(b) applies only to "a final judgment, order, or proceeding ."

Weva Oil Corp. v. Belco Petroleum Corp ., 68 F.R.D. 663, 666 (N.D .W.Va. 1975) ;

Fed. R. Civ. P. 60(b) . In explaining its ruling, the Weva court observed:

[the plaintiff] neither denies the fact of its late response nor questions theprinciple that failure to respond to requests for admission is deemed to b ean admission of the truth of the matters contained therein . Instead , it invokesas grounds for relief, the provisions of Rule 60 (b), Federal Rules of CivilProcedure , namely, mistake , inadvertence , surprise, and excusable neglect .

Counsel does not cite , nor has the Court found any decision applying theprovisions of Rule 60(b), so as to relieve a party for failure to make timelyresponse under the requirements of Rule 36(a). The language of Rule 60(b)clearly states its applicability to "a final judgment , order, or proceeding" anddoes not appear to make , even by implication , its provisions relevant toRule 36(a) .

Weva, supra, 68 F.R.D. at 666. (Emphasis original) . Other courts have similarly

expressed serious doubts about the applicability of Rule 60(b) to a motion seekin g

relief from a party's violation of Rule 36(a) . For instance, in Donovan v.

17 In addition, Defendant asks this Court to apply Rule 60(b) a third time to allow theresponses to be amended because the Magistrate stated that even if the responses were deemedtimely, she would have deemed requests 2,3,4,6 and 9 admitted anyway, to wit : "even if thisCourt had found that defendant's responses to the class plaintiffs' first set of requests foradmissions were timely, it would not have found that defendant's responses to requests foradmission nos . 2, 3, 4, 6, and 9 were proper, and it would have deemed those requests admitted ."In re Heritage Bond Litigation, 220 F.R.D. 624, 626-627 (C .D . Cal . 2004) (emphasis in

original) .PLAINTIFFS' OPPOSITION TO DEFENDANT VALUATION COUNSELORS .MOTION FOR RECONSIDERATION

6-14-04OppCBIZ Recon .Mot.wpd 21

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Anderson, 1981 U.S . Dist. LEXIS 14051, at *3 (D .S .C . 1981), the court opined

that "[T]here is serious question as to whether Rule 60(b) applies [to deemed

admissions] ." Furthermore, Rule 36 contains no reference to "mistake,

inadvertence, surprise, or excusable neglect" as in Rule 60(b), and the federal

cases have construed Rule 36(a) without reference to Rule 60(b) . See, Pathman

Const . Co. of Highland Park v . Drum-Co Engineering Corp ., 402 N.E.2d 1, 6

(Ind. App . 1980) . (internal citations omitted) . In light of the foregoing cases, the

law is clear: Rule 60(b) "does not appear to make, even by implication, its

provisions relevant to Rule 36(a) ." Weva, supra, 68 F.R.D. at 666 . Accordingly, it

is improper and impermissible for Defendant to invoke Rule 60(b) as grounds for

relief for its failure to make timely responses to Plaintiffs' requests for admissions .

Id. at 666 .

Even assuming arguendo that Rule 60(b) applies in this case, Defendant' s

motion still must be denied because neither Defendant nor its counsel ha s

sufficiently attested to "mistake, inadvertence, surprise, or excusable neglect" as

required by Rule 60(b) . Defense counsel blamed the tardy responses to Plaintiffs'

requests for admissions on "a misunderstanding [between himself and Defendant

in the midst of his traveling for out-of-state depositions] surrounding when the

[discovery] verification was provided ." (Le Pere Declaration at 1J[32 :23-26, 7, 8)

(emphasis added) . However, defense counsel's Declaration fails to show who was

at fault for that "misunderstanding ." Instead, defense counsel trotted out as

excuses the "last minute rescheduling" of depositions, and Defendant's

assumption that "the verifications had been previously provided on March 4,

2004." (Le Pere at Declaration 117, 8) .

An attorney's affidavit that failure to file a timely pleading was because o f

"other business" and "absence from the state," without other particulars, was hel d

PLAINTIFFS' OPPOSITION TO DEFENDANT VALUATION COUNSELORS .MOTION FOR RECONSIDERATION

6-14-04OppCBIZ Recon .Mot.wpd 22

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

to be an insufficient showing of excusable neglect or inadvertence as to warrant

relief under Rule 60(b) . Ledwith v. Storkan, 2 F.R.D . 539 (D. Neb . 1942) .

Similarly, an attorney's request for relief under Rule 60(b) was denied where his

excuse for failing to file a brief, per his affidavit, was his absence from his office,

pressure of other work, omission of the matter from his docket, and his inability to

contact his client (who left no forwarding addresses), since the reasons given

established neglect, but not excusable neglect . Williams v. Five Platters, Inc ., 510

F.2d 963 (Cust . & Pat. App . 1975) .

Given the case law on point, the "misunderstanding" concerning when th e

discovery verification was provided, which occurred in the midst of defense

counsel's traveling for out-of-state depositions, is an insufficient showing of

"mistake, inadvertence, surprise, or excusable neglect" to warrant relief under

Rule 60(b) for Defendant's failure to provide timely responses to Plaintiffs'

requests for admissions ." Therefore, even if Rule 60(b) applied, defense

counsel's Declaration would be grossly insufficient to meet the legal requirements

under Rule 60(b) as to warrant relief .

E. Defendant is Responsible for Its Own Actions and Omission s

In light of the substitution of new counsel for Defendant, it is anticipated th e

Defendant will argue it should not be punished for the misconduct of their prio r

attorneys .19 The law and the facts do not allow for this .2°

18 Defense counsel misleads this Court in his Declaration regarding the length of his tripto Minnesota for depositions . In fact, the depositions in Minnesota were concluded on March 11,2004. If Defense Counsel did not returned from Minnesota until March 15 ' , his extended staywas unrelated to these depositions . See Declaration of Michael Ackerman .

19 On May 24, 2004, in response to a press release disseminated by Plaintiffs' counsel(Exhibit 7 to Barry Declaration) the Defendant filed a Form 8K with the S .E.C. wherein itclaimed its "former counsel" had failed to inform the Defendant of the missed discovery deadlineand Judge Chapman's April 22 Order and that new counsel had been retained "in connectio n

PLAINTIFFS' OPPOSITION TO DEFENDANT VALUATION COUNSELORS .MOTION FOR RECONSIDERATIO N

6-14-04OppCBIZ Recon.Mot .wpd 23

The Defendant is responsible for the situation it now finds itself in . "A

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

corporation is no more entitled to avoid the discovery processes of a United States

district court than is an individual. Corporate officers must be compelled to answer

proper questions and if they refuse to respond to the proper orders of the cour t

appropriate legal process should be applied to them ." Arizona Western Ins. Co. v .

L. L. Constantin & Co., 247 F.2d 388, 392 (3rd Cir. 1957). In the Declaration of

Jeff LePere filed in response to Plaintiffs' Petition for an Order to Show Cause at

117, 8, 10, Mr. LePere stated :

I left several voice mail messages requesting that the [Defendant's]verifications be immediately provided . When they failed to arrive, Iinstructed several individuals on our staff to follow-up to ensure theverified responses were served . Unfortunately , this did not happen. Ireturned from Minneapolis on March 15, 2004 . I immediatelyinquired about [the Defendant ' s] discovery responses . Once again Iasked my client for the verifications . I also explained that I would notserve the res ponses until I had the verifications . . . . On March 17,2004, 1 finally received the ve rifications .

Moreover, the LePere Declaration filed in support of the instant motion similarly

notes, that he unsuccessfully attempted to obtain the verifications from the

Defendant on a number of occasions but that the Defendant "did not understand"

his request for verifications . (See LePere Declaration at ¶915-8) . Surely a publicly

traded NASDAQ company has a General Counsel who, not only knows what a

verification is, but who pays attention to a lawsuit seeking a potential of $90

million from the Company.

Even if this Court were to find that defense counsel was solely responsibl e

with this case going forward." See Exhibit 8 to Barry Declaration . It is interesting to note that,at the time of this S .E.C. filing, "former counsel" still represented the Defendant in this case . Infact, new counsel, Irell & Manella LLP, did not officially associate with "former counsel" untilJune 2, 2004 and to this day, "former counsel" remains counsel-of-record in the case .

20 Moreover, logic does not allow for this - if the Court were to embrace this argument,it would create an incentive for all defense counsel to ignore the rules of discovery with theintention of ultimately withdrawing as counsel to avoid any repercussions .

PLAINTIFFS' OPPOSITION TO DEFENDANT VALUATION COUNSELORS .MOTION FOR RECONSIDERATION

6-14-04OppCBIZ Recon .Mot.wpd 24

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

for the failure to timely respond to Plaintiffs' requests for admissions, there is no

legal or factual basis for alleviating Defendant from Judge Chapman's April 22

Order . Link v. Wabash R. Co., 370 U .S . 626, 633 (1962) (stating that"[T]here is

certainly no merit to the contention that dismissal of petitioner's claim because of

his counsel's un-excused conduct imposes an unjust penalty on the client .

Petitioner voluntarily chose this attorney as his representative in the action and he

cannot now avoid the consequences of the acts or omissions of this freely selected

agent.") ; Comiskey v. JFTJ Corp., 989 F.2d 1007, 1010 (8th Cir. 1993) (holding

that the fact that defendant's failure to comply with discovery request and to obey

court orders was sole fault of prior counsel would not preclude entry of default

judgment against defendant as discovery sanction .) ; Farm Const. Services, Inc. v .

Fudge, 831 F.2d 18, 21 (1st Cir . 1987) (noting that federal court "has turned a

`deaf ear' to the plea that `the sins of the attorney should not be visited upon the

client,"' and holding that discovery sanctions could be imposed on plaintiff, rather

than just counsel, for failure to comply with discovery requests for documents) .

In sum, Defendant's motion must be denied to the extent that it is predicate d

upon, and/or pursuant to, Fed. R. Civ. P. 60(b) .

IV. CONCLUSIO N

For any and all of the foregoing reasons, Plaintiffs respectfully request tha t

this Court deny Defendant's motion in its entirety under Local Rule 72-2.1, or the

Court's Standing Order or Fed. R. Civ . P., Rule 36 or Rule 60 or Rule 72(a) .

Dated : June 14, 2004 CLAWJQFFICE IAN BARRY

n y 135Jill Levine Betts #20806 51801 Avenue of the Stars, Suite 307Los Angeles, CA 90067Telephone: (310) 788-083 1

PLAINTIFFS' OPPOSITION TO DEFENDANT VALUATION COUNSELORS . MOTION FOR RECONSIDERATION

6-14-04OppCBIZ Recon .Mot .wpd 25

1

2

3

4

5

6

7

8

9

10

11

12

13

1 4

1 5

16

1 7

1 8

1 9

20

21

22

23 1124

25

26

27

28

Facsimile : (310) 788-084 1

GLANCY, BINKOW & GOLDBERG LLPLionel Z. GlancyPeter BinkowKevin Ruf1801 Avenue of the Stars, Suite 311Los Angeles, CA 90067Telephone : (310) 201-9150Facsimile : (310) 201-9160

Co-Lead Counsel for Class Action Plaintiffs

PLAINTIFFS ' OPPOSITION TO DEFENDANT VALUATION COUNSELORS .MOTION FOR RECONSIDERATION

6-14-44OppCBIZ Recon .Mot.wpd 26

PROOF OF SERVICE VIA ELECTRONIC TRANSFER

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

STATE OF CALIFORNIA, COUNTY OF LOS ANGELE S

I, the undersigned , declare: that I am employed in the aforesaid County,State of Califo rnia in the office of a member of the Bar of this Court at whosedirection the following service was made. I am over the age of 18 and not a partyto the within entitled action ; my business address is : 1801 Avenue of the Stars,Suite 307 , Los Angeles, California 90067 .

On June 14 , 2004, I served u on the interested p arties in this action,pursuant to Fed. R . Civ. P. Rule 5(b) and Local Rule 5-3, the document describedas follows :

PLAINTIFFS' OPPOSITION TO DEFENDANT VALUATIONCOUNSELORS GROUP INC.'S MOTION TO WITHDRAW ADMISSIONSDEEMED ADMITTED AND TO RECONSIDER MAG. CHAPMAN'SRULING- MEMORANDUM OF POINTS AND AUTHORITIES INSUPPORF THEREOF

[X] by sending electronicall y a true and correct copy thereof to Verilaw forservice on all counsel of record (see attached service list) by electronicservice pursuant to the Order Re : Electronic Service .

By electronic transfer I sent said document to Verilaw Technologies, Inc .,located at 400 East Lancaster Avenue, Suite 300, Wayne, Pennsylvania 19087,www.verilaw .com, initiated on the Heritage Bond Litigation Website, before thehour of 6 :30 PM .

I declare under penalty of perjury, under the laws of the State of Californiaand the United States of America, that the foregoing is true and correct . Executedon June 14, 2004, at Los Angeles, Los Angeles County, California .

PLAINTIFFS ' OPPOSITION TO DEFENDANT VALUATION COUNSELORS . MOTION FOR RECONSIDERATION

6-14-04OppCBIZ Recon .Mot .wpd 1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

CONSOLIDATED SERVICE LIS TIN RE HERITAGE BOND LITIGATION

William CrockettSteve SkirvinDion-Kindem & CrockettLNR Warner Cente r21271 Burbank Blvd ., Suite 100Woodland Hills, CA 91367Telephone: (818) 883-4400Facsimile: (818) 676-0246

For Defendants

Steve BaconHill Farrer & Burrill LLPOne California Plaza, 37th Fl .300 S . Grand Ave .Los Angeles, CA 90071Telephone : (213) 620-0460Facsimile: (213) 624-484 0

Attorneys for Jerold Goldstein, ClarkeUnderwood, Richard Kuhl and G. Ostlund

John CaronMatt Stei nReback McAndrews & Kjar1230 Rosencrans Ave ., Suite 450Manhattan Beach . CA 90266Telephone : (310) 297-9900Facsimile : (310) 297-9800

-and-

Dennis Neil Jone sMyers, Widders, Gibson , Jones &Schneider , L .L.P .5425 Everglades StreetP .O .Box 7209Ventura, CA 93006Telephone : ( 805) 644-7188Facsimile : (805) 644-7390

Attorneys for U.S . Trus t

Gary A. Kurtz, Esq .20335 Ventura Blvd ., Suite 200Woodland Hills, CA 91364Telephone : (818) 884-8400Facsimile : (818) 884-840 4Attorneys for Robert Kasirer and relatedcompanies, JDDD Holdings L .P., BHM,Health Care Holdings LLC, Carecontinuum

Frank J . Ozello, Jr .Gray, York & Duffy15760 Ventura Blvd ., 16th FloorEncino, CA 91436Telephone : (818) 907-4000Facsimile: (818) 783-455 1

Attorneys for Michael Sobelman andSobelman's firm

Steve Schwartz X 18Schwartz and Janzen LLP12100 Wilshire Blvd., #1125Los Angeles, CA 90025Telephone : (310) 979-4090Facsimile: (310) 207-3344

Attorneys for Onofrio Bertolini and Bermanand Bertolini, Inc. aka Berman & Associatesand William Filippone

NEWESTCAPTION wpd

Attorneys for Stephen P . Goodman

Roman Mosqued aLaw Offices of Roman Mosqueda3350 Wilshire Blvd ., Suite 735Los Angeles, CA 90010Telephone : (213) 252-9481Facsimile : (213) 252-592 9

Attorneys for Virgil Lim

Fred Fenste rRutter Hobbs & Davidof f1900 Avenue of The Stars, Suite 2700Los Angeles, CA 9006 7Telephone : (310) 286-1700Facsimile : (310) 286-172 8

Attorneys for Estate of Emery Rubin

2

1

2

3

4

5

6

7

8

9

1 0

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Arthur C . Chamber sLaw Offices of Arthur C . Chambers2095 Van Ness Avenu eSan Francisco, CA 94109Telephone: (415) 775-2144Facsimile: (415) 775-1308

Attorneys for Herbert Saltzman

Francis Bottini Jr .Wolf Haldenstein Adler

Freeman & Herz LLP750 B Street, Suite 2770San Diego, CA 92101Telephone: (619) 239-4599Facsimile : (619) 234-459 9

Attorneys for Evan Greenspan and CaryMedill, the Esta te of Andrew Kornreich, andDonald Chalke r

David R . SchwartzLaw Offices of David R . Schwartz11355 West Olympic Blvd ., Suite 100Los Angeles, CA 9006 4Telephone: (310) 914-1770Facsimile : (310) 914-1774

I Attorneys for Larry Rubin

Louis A . PontarelliP .O . Box 1935Temecula, CA 92593Telephone : (909) 699-7757Fascimile : (909) 587-9778In Pro Per

Mike GottschlichBarnes & Thornburg11 South Meridian StreetIndianapolis , IN 46204Telephone : (317) 231-1313Facsimile : (317) 231-7433Attorneys for Leo Dierckman

Leon Smal lLaw Offices of Leon Small16530 Ventura Blvd . Suite 306Encino, CA 9143 6Telephone: (818) 906-2555Facsimile : (818) 907-8471Attorneys for Alan Polla k

NEWESTCAPTION wpd

Charles R . Grebin gWingert, Grebing, Brubaker & Ryan LLP600 West Broadway, 7th Floo rSan Diego, CA 92101-3370Telephone : (619) 232-8151 x7014Facsimile : (619) 232-466 5

Attorneys for- Joel T. Boehm

Beth DunnSteve UribeButz Dunn Desantis & Bingham101 West Broadway, Suite 1700San Diego, CA 92101-8289Telephone: (619) 233-4777Facsimile: (619) 231-034 1

Atto rn eys for Joel Boehm , Sabo & Green

Daniel WhiteSusan OliverWhite & Oliver, P .C .550 West C. Street, Suite 950San Diego, CA 92101Telephone: (619) 239-0300Facsimile : (619) 239-0344

Attorneys for Atkinson, Andelson, Loya,Rudd & Romo

Scott B . GarnerHowrey Simon Arnold & White2020 Main Street, Suite 1000Irvine, California 92614Telephone : (949) 721-6900Facsimile : (949) 721-6910Attorneys for Wildman, Harrold Allen &Dixon

Kevin Rose nGibson Dunn & Crutcher333 South GrandLos Angeles , California 90071Telephone: (213) 229-7000Facsimile: (213) 229-7520Attorneys for Foley & Lardner

3

1

2

3

4

5

6

7

8

9

1 0

11

12

1 3

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Dennis Brown, Esq .

Munger Tolles & Olson LLP355 South Grand Ave .Los Angeles, CA 90071Telephone: (213) 683-9100Facsimile: (213) 687-370 2

Attorneys for Fulbright & Jaworsk i

Norman J . BaerAnthony Ostlund & Baer, P .A .3600 Wells Fargo Cente r90 South Seventh Street

Minneapolis, MN 55402

Telephone: (612) 349-6969

Facsimile : (612) 349-6996

Attorneys for Jerome A . Tabolic h

Diane L . DraganDaniel J . Albregts, LTD .601 S . Tenth Street, Suite 202Las Vegas, NV 89101Telephone: (702) 474-4004Fax: (702) 474-073 9

Attorneys for Edward J . Heniges ; Kenneth

R . Larsen; Steven W. Erickson ; Paul R .

Ekholm

Richard D. GluckFAIRBANK & VINCENT11755 Wilshire Boulevard, Suite 2320Los Angeles, CA 9002 5Telephone : (310) 996-5520Facsimile : (310) 996-5530Telephone: (619) 231-110 1

~ Attorneys for James E. Iverson

NEWESTCAFTION wpd

Miles ScullyGORDON & REES LL P101 West Broadway, Suite 1600San Diego, CA 92101Telephone: (619) 696-6700Facsimile: (619) 696-712 4

-and-

Lindsay ArthurEugene ShermoenArthur, Chapman , KetteringSmetak & Pikala, P .A .500 Young Quinlan Building81 South 9th StreetMinneapolis , MN 55402Telephone : (612) 339-3500Facsimile : (612) 339-765 5

Attorneys for John M. Clarey; Kenneth E .

Dawkins

Jane HahnPatrick ConnorsHahn & Adem a501 W Broadway #1730San Diego, CA 92101Telephone: (619) 235-2100Facsimile: (619) 235-210 1

Attorneys for Victor Dhoog e

Michael SchiffEaston & Schif f10100 Santa Monica Blvd ., 8' Fl .Los Angeles , CA 90067Phone : 310 772 2224Fax : 3 10 772 2225

For: Marshall Wexler

4

1

2

3

4

5

6

7

81

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Peter D . Sunukjia nDrinker, Biddle & Reath, LL P333 South Grand Avenue, Suite 1700

Los Angeles, CA 90071-1504

Telephone : (213) 253-2300

Facsimile : (213) 253-230 1

and

Mary E. KohartDrinker Biddle & Reath LLPOne Logan Square18`h and Cherry StreetsPhiladelphia, PA 19103-6996Telephone: (215) 988-2827Facsimile : (215) 988-275 7

Attorneys for Capital Consultin g

Shaun O'DohertyJeff LePereGates O'Doherty Gonter & Guy700 South Flower Street, Suite 1100Los Angles, CA 9001 7Telephone: (909) 477 3282Facsimile : (909)-477-3272Telephone : (858) 676-8600Facsimile : (858)-676-860 1

Attorneys for Valuation Counselors and

Zelenkofske, Axelrod & Co .

Mark Epstei nPoeschl Kohn & Epstein LLP825 Washington St ., suite 301Oakland, CA 94607Telephone: (510) 874-7261Facsimile: (510) 874-1329Attorneys for Healthcare FinancialSolutions

NEWESTCAPTION wpd

Tom Franci sBohm Francis Kegel & Aguilera, LLP695 Town Center Drive, Suite 700Costa Mesa, CA 9262 6Telephone : (714) 384 6500Facsimile: (714) 384-650 1

For : Tarrant County Health Facilities

Lee WoodLee A. Wood & Associates, P.C .2603 Main Street, Suite 1000Irvine, CA 9261 4Telephone: (949) 794-5900Facsimile: (949) 794-593 0

Attorneysfor Danforth Health FacilitiesCorporatio n

John CottonCotton & Gundzi k801South Figueroa Street, 14th FloorLos Angeles, CA 9001 7Telephone: (213) 312-1330Facsimile: (213) 623-669 9

Attorneys for City of Chicago

Kevin Patrick McVerryGraves Roberson & Bourassa1200 W Hillcrest Dr #100Thousand Oaks, CA 91320-2734Telephone : (805) 498-7119Facsimile : (805) 498-811 1

Attorneys for Desert Hot Springs

Jerry AbelesFriedemann, O'Brien, Goldberg & Zarian445 South Figueroa, Suite 375 0Los Angeles, CA 90071

Telephone : (213) 629-7400

Facsimile: (213) 629-7401

Attorneys for City of Mexico Beach

5

1

2

3

4

51'

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

For Plaintiff s

Gregory BlaiesBlaies & Hightower, LLP

777 Main Street, Suit 1900

Fort Worth, TX 76102

Telephone : 817 .334.0800

Facsimile : 817 .334.0574

Richard Campbel lFreeman Freeman & Saltzman401 N . Michigan Ave., suite 3200Chicago 111, 6061 1Telephone : (312) 222-5100Facsimile : (312) 222-074 4

For Plaintiffs in Class Actio n

Lionel Glanc yGlancy & Binkow LLP1801 Avenue of the Stars, Suite 311Los Angeles, CA 90067Telephone: (310) 201-9150Facsimile: (310) 201-916 0

For Plaintiffs in Class Action

Christopher F . WongSheldon Eisenberg, Esq .Bryan Cave LLP120 Broadway Suite 300Santa Monica, CA 90401Telephone: (310) 576-2275Facsimile: (310) 576-220 0

Attorneys for Bank of New York - Trustee

Action

Robert Feldhake (5005)Lisa RoquemoreFeldhake August & Roquemore19900 MacArthur Blvd ., Suite 850Irvine, CA 9261 2Telephone: (949) 553 5000Facsimile : (949) 553-5098

I Attorneys for Plaintiffs in Betker Action

I NEWESTCAPTION wpd

Attorneys for Plaintiff Heartland Bond Funds

Brian Miller

Brad Milove

Miller Milove & KohThe Ko]] Cente r501 West Broadway, suite 1600San Diego, CA 92101Telephone : (619) 696-5200Facsimile: (619) 696-539 3

For Plaintiffs in Class Action

Steven J . TollDan SommersJosh DevoreJulie GoldsmithCohen, Milstein, Hausfeld & Toll1100 New York Avenue, N .W .West Tower, Suite 500Washington, D .C . 20005Telephone : (202) 408-4600Facsimile: (202) 408-4699For Plaintiffs in Class Action

6