Yes, this whole thing is a total cluster FK! I'll say this IF this case is tied to the merger in any way imo there is a zero % chance of see any type of merger between BYOC and Eletric Built. Mainly because this case which is already over 3 years old is nowhere near being finished! Remo will be losing out on other potential buyers in this hot EV market, no way he sticks around and waits for this to be settled. It all comes down to hoping that the delay was really due to paperwork being filed on time. If not this 8K could be more than a delay. Fingers crossed. For those that want to read BYOC's attorney's reply here is the whole thing.
October 19, 2022 Via E-Filing and Service
Judge Joseph R. Klein
Hennepin County Government Ctr.
300 South 6th Street
Minneapolis, MN 55487
Re: Mork Bredeson v. Service 800, Inc. et al., No. 27-CV-20-3476
Dear Judge Klein:
At the Court’s request, we submit this letter both to respond to the October 13, 2022 letter
filed by Plaintiff’s counsel on behalf of Jean Mork Bredeson and to raise the corresponding
issues that may be addressed now that trial is being reset to occur in May 2023.
I. Bredeson’s request to bring another summary-judgment motion
With respect to Bredeson’s request to bring another summary-judgment motion,
Plaintiff’s counsel misstates the earlier conference by claiming the Court “was receptive to the
proposal if the rescheduled trial were scheduled far enough out to accommodate the request.”
(Oct. 13, 2022 Leventhal Ltr. at 1.) The Court’s expressed concern during the conference was
that Bredeson had already brought a motion for summary judgment, and she would need to
articulate a separate basis—one that has not already been briefed—in order to merit
consideration. Here, when the trial concluded, only Bredeson had provided her case and
Defendants had not yet concluded direct examination of even their first witness. Accordingly, it
appears Bredeson intends to seek summary judgment based solely on her own case and
evidence—all of which were certainly available to her some time ago (and the content of which
Defendants dispute). Given where the trial left off, it would make far more sense for Beyond
Commerce to move for summary judgment given, for example, that no one from Bredeson’s side
(including Bredeson herself) could verify the accuracy of the representations about Service 800
that Bredeson made to George Pursglove (at his request) immediately before the sale, and that
the only purported defaults enumerated in the Forbearance Agreement, and that the Forbearance
Agreement purported to resolve, were acknowledged by the drafter of the Forbearance
Agreement to have been “waived” by the act of the closing.
Moreover, Bredeson’s asserted basis for seeking summary judgment is that “Defendants
have now abandoned positions they took previously” regarding George Pursglove’s legal
capacity or authority to act on behalf of Beyond Commerce at the closing on February 28, 2019.
This misstates Defendants’ arguments and the record. Bredeson brought motions in limine
related to George Pursglove’s competency at closing (Motion #4) and to “[e]xclude all argument
or evidence as to the supposed lack of authority for Mr. George Pursglove to enter into the
purchase agreement on behalf of Beyond Commerce, Inc.” (Motion #5). Defendants responded
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by asserting that they did not intend to argue that George Pursglove was incompetent or that he
did not have authority to sign the closing documents as prepared or approved by Beyond
Commerce’s counsel. The issue, as Defendants explained, was “what purchase agreement terms
he was authorized to accept”—and that changes were made that were not reviewed or approved
by company counsel or the Beyond Commerce Board. (Sept. 14, 2022 Def. Opp. to Mot. in
Limine at 7.) Bredeson also raised these issues in her prior dispositive motion, claiming, “[t]here
is no factual basis for any such claims [that Pursglove lacked capacity to enter the agreement],”
and submitting several affidavits on this point. The Court already held that fact issues preclude
summary judgment on the defenses related to the February 2019 closing of the transaction that
was the subject of the December 2017 Stock Purchase Agreement. (See Sept. 13, 2021 Order at
13 (“Plaintiff similarly dismisses Defendants’ other affirmative defenses related to the February
2019 closing because they involve conduct it argues predates the Forbearance Agreement, and is
therefore irrelevant. Similarly, the court finds that questions of fact exist regarding many of these
defenses, rendering summary judgment improper.”).)
The Court did not grant Bredeson’s Motion in Limine to preclude facts related to changes
made to the agreements or Beyond Commerce’s authorization or ratification of the same, and
while Bredeson spent days entering testimony on this point that in essence parroted the testimony
submitted by way of affidavits in support of her motion for summary judgment, Beyond
Commerce has yet to have its board members testify regarding their knowledge or authorization
of the changes, nor has Beyond Commerce’s counsel had the opportunity to refute the testimony
offered by Bredeson’s counsel on these points. Defendants have not waived this defense, nor is it
their only defense to enforceability of the closing transaction agreements. As previously stated,
and as will be shown through testimony and other evidence admitted by Defendants when they
are able to present their case, Bredeson’s prior breaches of these agreements and her inaccurate
pre-closing disclosures that grossly misstated the value of Service 800 in the days preceding the
transaction also defeat Bredeson’s claims.
The Court should decline Bredeson’s request to revisit dispositive motions practice.
II. Logistics and remaining issues to address now, well in advance of the second trial.
Defendants want to ensure they have an accurate understanding of how the second trial in
this matter will proceed and to address the reoccurring issues from the first trial. We understand
from the Court’s comments to the parties when deciding whether to proceed or suspend trial that
the next trial will remain “in the same footprint” as the first trial. We understand this to mean
that the parties will call the same witnesses called, or stated on the record they would call, during
trial (i.e., Bredeson, Floyd, Lutz, Muehler, Carney, Garfield, Pursglove, McMillian, Workman,
Haranczuk, Stazzone) and will use the same exhibits previously disclosed by the parties.
Here, the Court held two pre-trials in this matter. At the second, the Court addressed a
number of issues, including: (1) Bredeson’s late-disclosure-of-documents claim (also made
previously and addressed as a motion in limine); and (2) Bredeson’s inclusion of her counsel as
witnesses.
Regarding the first issue, after Defendants stated on the record they would agree to a
continuance to moot this issue, noting the Court’s conclusion that late disclosure would not be a
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basis for keeping evidence from coming in at trial—and in fact, that this would be the most fair
route given that it was Bredeson’s failure to disclose documents during discovery that led to the
Court granting Defendants’ motion to compel an inspection of her devices after the close of
discovery, meaning that all documents that Defendants obtained from Bredeson’s devices came
only after the close of discovery when Defendants could no longer use those documents as a
source of inquiry into other documents or in Bredeson’s deposition—the Court asked whether
Bredeson wanted a continuance. The parties recessed, and Bredeson decided she did not want a
continuance. However, instead of resolving the issue, Bredeson’s counsel continued to reargue
throughout trial the same alleged late-disclosure issues they had raised during the two pretrials
and through motions in limine, and which was resolved by Bredeson’s declination of the
continuance option. Be all that as it may, the parties now have a de facto continuance—whether
they wanted the same or not—and Defendants want to avoid wasting further time during trial on
Bredeson’s claims of late-disclosure. Whether it is a deposition of Ms. Workman regarding the
documents she created or providing further reports or access to the QuickBooks file, Defendants
want to ensure that these issues are timely addressed so the parties are not undertaking a
deposition during trial or needing to allocate jury-trial time to discussion of the same. Defendants
also seek to depose Bredeson again regarding the documents that were obtained from her devices
after the Court granted Defendants’ motion after discovery had closed. This deposition will
alleviate the authentication issues that arose during Bredeson’s cross-examination.
Regarding the second issue, the Court had expressed hesitancy at allowing Attorney
David Lutz to appear, given that he had represented Bredeson throughout the litigation and had
only withdrawn in the weeks before trial. Lutz and Attorney Paul Floyd, Bredeson’s other
counsel, were ultimately allowed to testify, over the objections of Defendants that such
testimony was duplicative and represented only in an attempt to add expert-level credibility to
Bredeson’s testimony, and that these individuals had resisted turning over communications
during discovery. Trial raised a new issue with at least one of Bredeson’s lawyers testifying that
Bredeson had waived privilege in writing before trial—in a communication that was never
shared with Defendants. Bredeson had served pages of privilege logs in this matter while
withholding those communications. (See attached.) Defendants should have been notified of the
waiver and provided the withheld communications. Now that the parties have this interlude,
those communications should be produced, and these two attorneys should be made available to
sit for depositions regarding the same—assuming the Court will allow them to testify again after
it was made clear by the testimony itself that they had no separate facts to offer.
On a related note, Defendants have asked at numerous points, including in the month
before trial, that Bredeson supplement her discovery responses and productions as she is required
by Rule 26.05 to do. Bredeson did not respond to this request or produce any additional
documents. Defendants have learned that Bredeson continues to contact Service 800 clients and
vendors and even former employees, without providing those communications in discovery. This
came up most recently when a former Service 800 consultant indicated he would seek a
restraining order if Bredeson continued to contact him. It is unclear if these are attempts by
Bredeson to obtain additional witnesses to testify on her behalf at the next trial or if Bredeson is
attempting to make this whole ordeal so unpalatable to potential Service 800 witnesses that they
do not want to come to trial and testify, but Defendants respectfully ask that the Court require
that all supplementation by both sides be completed on or before December 31, 2022, so that the
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parties have sufficient time to review those materials in advance of trial. (This would apply to all
documents available before that date with an understanding that any responsive documents
created or made available only after this date should also be promptly produced.) Defendants
will do the same to ensure compliance with their Rule 26 obligations.
Lastly, Defendants understand there were some remaining issues with certain exhibits,
but we admittedly are not recalling the specific issues that the Court wanted the parties to address
regarding these exhibits. One of the exhibits was an email that Defendants argue goes to the
credibility of the witness (Bredeson made a misrepresentation about her correspondence that
Garfield confronted by showing Bredeson her actual correspondence), prior breach (Bredeson
did not follow her contractual obligations before asserting Defendants had breached), and
Bredeson’s unclean hands (as it relates to her equitable claims). The second issue related to
exhibits that Defendants intend to use as examples of Bredeson’s retention of Defendants’
confidential information and materials in violation of her obligations under the Stock Purchase
Agreement. Plaintiff’s counsel made an inaccurate assertion in claiming they had never seen
these documents before even though they were produced by Bredeson in the litigation, included
on Defendants’ exhibit list, and provided to Bredeson’s counsel in hard-copy and identified by
exhibit name before they were discussed at trial. Defendants could use different materials—it
appears as though Bredeson maintained all the documents to which she had access at Service
800—if the native format is troubling to the Court. Or Bredeson could stipulate, as Bredeson’s
counsel previously suggested, that Bredeson retained confidential information of Service 800
after her employment ended. However, if there is no stipulation, then Defendants will need to
enter evidence of Bredeson’s breach of the agreement by her misappropriation of Service 800
confidential information that the Stock Purchase Agreement expressly provides, at Section 3.12,
was to remain with Service 800 after Beyond Commerce purchased the company.
If the Court wants to identify its concerns in advance of Defendants’ receipt of a
transcript, Defendants are more than willing to address those in writing or via a hearing.
Otherwise, Defendants respectfully request the opportunity to address these issues in full after
we have the benefit of the record.
Respectfully submitted,
/s/ Samantha J. Ellingson
Samantha J. Ellingson (#0397448
