Party Discovery: Bertoia, Wanda et al v. Payton, Brett et al

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                                DATE FILED: May 19, 2023 2:12 PM
District Court, City and County of Denver,                FILING ID: E42365737C964
State of Colorado                                         CASE NUMBER: 2019CV33523
1437 Bannock Street
Denver, CO 80202

Plaintiffs/Counterclaim Defendants:

WANDA BERTOIA, and WPB HOSPITALITY, LLC, a Colorado limited
liability Company,

v.

Defendants:

BRETT PAYTON; COAN PAYTON & PAYNE, LLC, a Colorado limited
liability company, GALAXY MANAGEMENT COMPANY, LLC, a Texas
limited liability company; JAGMOHAN DHILLON; ABBAS
CONSULTING, INC., a Texas corporation; and FRISCO ACQUISITION,
LLC, a Texas limited liability company;

and,

Defendant/Counterclaimant:
                                                                          COURT USE
DENVER GATEWAY, LLC, a Colorado limited liability company.                 ONLY 

Daniel W. Glasser, No. 37716
Jennifer M. Osgood, No. 35070                                            Case No.:
CHIPMAN GLASSER, LLC                                                     2019CV33523
2000 S. Colorado Blvd.
Tower One, Suite 7500                                                    Consolidated with
Denver, CO 80222                                                            Case No.
Telephone: (303) 578-5780                                                  21CV30454
Fax: (303) 578-5790
E-mail: dglasser@chipmanglasser.com                                      Div.: 420
        josgood@chipmanglasser.com

Counsel for Galaxy, Dhillon, Abbas, Frisco, and Gateway

       DHILLON, GALAXY, FRISCO, AND DENVER GATEWAY’S MOTION FOR
        SUMMARY JUDGMENT ON PLAINTIFFS’ NINTH CLAIM FOR RELIEF
           (PUNITIVE DAMAGES AND TREBLE PUNITIVE DAMAGES)
       Defendants Galaxy Management Company, LLC, Jagmohan Dhillon (“Dhillon”), Frisco

Acquisitions, LLC (“Frisco”), and Defendant/Counterclaimant Denver Gateway, LLC

(collectively, the “Defendants”) move pursuant to C.R.C.P. 56 for summary judgment on Plaintiff

Wanda Bertoia (“Bertoia”) and WPB Hospitality, LLC (together, the “Plaintiffs”) Ninth Claim

for Relief (Punitive Damages and Treble Punitive Damages) (the “Punitive Damages Claim”),

stating as follows.1

       Certificate of conferral pursuant to C.R.C.P. 121(c), 1-15(8). Defendants’ counsel

conferred with Plaintiffs’ counsel regarding the requested relief. Plaintiffs oppose this motion.

                                        INTRODUCTION

       Plaintiffs are, apparently, determined to force a referendum on the events that transpired in

the Texas bankruptcy proceedings. Notwithstanding this Court’s ruling that the Denver District

Court lacks jurisdiction to second-guess what happened in the Frisco bankruptcy case, Plaintiffs

plan to put this issue in front of the jury, regardless, by simply labeling it “cause” for punitive

damages.

       We learned on Tuesday (May 16)—when Plaintiffs belatedly answered Interrogatories—

that the sole factual grounds for their Punitive Damage Claim is an expert opinion offered by a

Florida bankruptcy lawyer named Steven Berman. In his report, Mr. Berman says he plans to testify

as follows: “the Frisco Bankruptcy Case was filed in bad faith, in an attempt to launder Bertoia’s



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        On May 16, 2023, this Court held a discovery dispute hearing related to Plaintiffs’ failure
to answer written discovery before the deadline to file motions for summary judgment. Because
Plaintiffs delay was potentially prejudicial, the Court noted that the Hotel Defendants could amend
their motions for summary judgment by May 19, 2023. Because the Hotel Defendants did not
know the basis for Plaintiffs’ Punitive Damages Claim, prior to May 16, this motion could not have
been filed without the discovery responses.
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causes of action through the Chapter 7 Trustee, and the litigation therein was used to impede,

obstruct, delay and defeat Bertoia’s Colorado Litigation, just as Frisco had done in the WPB

Bankruptcy.” Yet these are the same allegations underlying Plaintiffs’ abuse of process claim,

which the Court has held it lacks jurisdiction to adjudicate.

       If there are other allegations supporting Plaintiffs’ Punitive Damages Claim, Plaintiffs have

refused to say so. Judgment should enter against them on that basis too, as Plaintiffs have not raised

any genuine issue of material fact that they are entitled to relief on their Punitive Damages Claim

as a matter of law.

                              UNDISPUTED MATERIAL FACTS

       1.      On September 11, 2019, Bertoia sued Frisco for breach of contract. (See generally

Bertoia’s Original Complaint.)

       2.      On February 21, 2023, this Court accepted Plaintiffs’ “Fifth Amended Complaint”

(the “Complaint”).

       3.      In the Complaint, Plaintiffs asserted two new claims relevant to this motion:

            a. Plaintiffs’ Sixth Claim for Relief for “Abuse of Process” against Dhillon and Frisco;

               and,

            b. Plaintiffs’ Ninth Claim for Relief against Defendants for “Punitive Damages and

               Treble Damages” (i.e., the “Punitive Damages Claim”). (Complaint, ¶¶ 234-244,

               256-259.)

       4.      The Complaint, filed more than three years after Bertoia initiated this action, was

actually Plaintiffs’ eighth proposed complaint. Of those, the Court has accepted six as operative

(including the current Complaint). This final amendment marked the first time Plaintiffs sought


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punitive damages against the Defendants or alleged misconduct in the Frisco Bankruptcy. (See,

Redlined Fifth Amended Complaint (filed January 25, 2023), pp. 21-24, attached as Exhibit A.)

       5.     In support of their Punitive Damages Claim, Plaintiffs conclusory alleged only that

they were entitled to punitive and treble punitive damages in this action because Defendants’

actions were “attended by willful, wanton, and reckless disregard for WPB and Bertoia’s rights

and property[,]” and Defendants “acted in a willful and wanton manner which further aggravated

Plaintiffs’ damages when Defendants knew their actions would provide aggravation, which

conduct supports an award of treble punitive damages against Frisco, Dhillon, and Galaxy.”

(Complaint, ¶¶ 256-259.)

       6.     Plaintiffs never identified which alleged actions support their Punitive Damages

Claim or why. (See id.)

       7.     In an effort to close this informational gap, Defendants served written discovery

requests aimed at requiring Plaintiffs to identify which actions support their Punitive Damages

Claim and whether such actions entitle them to punitive damages or treble punitive damages. (See

Hotel Defendants’ First Set of Written Discovery Requests (Interrogatories No. 15 and 16), p. 11,

attached as Exhibit B.)2



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       Interrogatory No. 15: “Identify, with specificity, which ‘actions of Frisco, Dhillon,
Galaxy, and Denver Gateway’ were ‘attended by willful, wanton, and reckless disregard for WPB’s
and Bertoia’s rights and property’ as set forth in Your Ninth Claim for Relief (Punitive Damages
and Treble Damages) in paragraphs 256 through 259 of Your Complaint. In identifying each and
every action, identify the action(s), who committed the action(s), when such action(s) were
committed, the context for each alleged action, and how such action(s) affected You.”

       Interrogatory No. 16: “For each action identified in Your response to Interrogatory
No. 15, identify whether You believe such action(s) entitle You to punitive damages and/or treble
damages, and the legal basis for such damages claim(s).”
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       8.      Plaintiffs belatedly served their responses to these discovery requests on May 16,

2023. (See Objections and Responses to Defendants’ First Set of Written Discovery Requests

(the “Discovery Responses”), attached as Exhibit C.)

       9.      In response to Defendants’ Interrogatories regarding the basis for the Punitive

Damages Claim, Plaintiffs stated only (to both requests): “See Expert Report of Steve Berman.”

(Response, pp. 6-7.) Plaintiffs did not object to these Interrogatories.

       10.     Mr. Berman’s expert report addresses two issues: (1) “was Frisco’s chapter 7

bankruptcy filing in the United States Bankruptcy Court for the Eastern District of Texas made in

bad faith, or for any legitimate bankruptcy purpose?” and (2) “Does a bankruptcy court have

jurisdiction over the sale of membership interests of a debtor limited liability company between

non-debtor parties?” (See Report of Steve Berman (the “Berman Report”), pp. 8-12, excerpts

attached as Exhibit D.)

       11.     Save for two paragraphs of analysis regarding a question of when bankruptcy court

approval is required in reference to certain contracts, (see id., at pp. 11-12), Mr. Berman’s analysis

relates only to Frisco’s alleged abuse of the bankruptcy process. (See id., at pp. 8-11.)

       12.     The Berman Report does not address, quantify, or attribute damages. (See id.)




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       13.     The Berman Report does not once use the terms “punitive damages,” “treble

punitive damages,” or otherwise reference the statutory basis for Plaintiffs’ Punitive Damages

Claim. (See id.)3

       14.     This Court dismissed Plaintiffs’ claim for abuse of the bankruptcy process—the

central subject of the Berman Report—for lack of subject matter jurisdiction. (See May 9, 2023

ORDER RE: DEFENDANTS JAGMOHAN DHILLON AND FRISCO ACQUISITION LLC’S

FORTHWITH MOTION TO DISMISS PLAINTIFFS’ SIXTH CLAIM FOR RELIEF (ABUSE

OF PROCESS) FOR LACK OF SUBJECT MATTER JURISDICTION (the “Order”).)

       15.     In the Order, the Court made clear that there were no state court remedies for abuse

of the bankruptcy process. (See id.) In other words, Plaintiffs cannot seek damages in this action—

of any nature—for alleged misuse or misconduct related to Defendants’ actions in bankruptcy (See

id.)

                                  STANDARD OF REVIEW

       A party against whom a claim is asserted may move for a summary judgment in the

defending party’s favor as to all or any part of the claims against it. C.R.C.P. 56. Summary

judgment is appropriate only if there is no genuine issue as to any material fact and the moving

party is entitled to a judgment as a matter of law. Peterson v. Halsted, 829 P.2d 373, 375 (Colo.


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         The Hotel Defendants reserve the right to move under C.R.E. 702 to strike (at least) the
portions of the Berman Report regarding the Abuse of Process claim as irrelevant. See People v.
Shreck, 22 P.3d 68, 77 (Colo. 2001) (holding that “the focus of a Rule 702 inquiry is whether the
[expert opinion] evidence is both reliable and relevant,” and, that in “determining whether the
evidence is relevant, a trial court should consider whether the testimony would be useful to the
jury.”) (emphasis added).

        The Hotel Defendants further reserve the right to exclude any testimony seeking to impugn
Frisco’s actions in bankruptcy as improper via a motion in limine.
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1992). The purpose of summary judgment is to permit the parties to “pierce the formal allegations

of the pleadings and save the time and expense connected with trial when, as a matter of law, based

on undisputed facts, one party could not prevail.” Id. Summary judgment should be granted upon

a clear showing that there is no genuine issue as to any material fact. Id.

       A court may rely on “the pleadings, depositions, answers to interrogatories, and admissions

on file, together with the affidavits, if any,” in determining whether to grant a motion for summary

judgment. Id. In determining if summary judgment is proper, the nonmoving party is entitled to

the benefit of all inferenced that are reasonably drawn from the undisputed facts, and all doubts

must be resolved against the moving party. Id.

                                           ARGUMENT

I.     Plaintiffs are not entitled to judgment on their Punitive Damages Claim.

       The only identified factual basis for Plaintiffs’ Punitive Damages Claims consists of alleged

misconduct in Frisco’s bankruptcy. (Compare Ex. B, p. 11 (responses to Interrogatories No. 15 and

16), with Ex. D, pp. 8-12.) This Court, however, has already ruled that it lacks subject matter

jurisdiction to assess the propriety of a litigants’ actions in bankruptcy, or assess any damages

related to those actions. (See Order.) And the Court’s subject matter jurisdiction over behavior in

and damages related to a separate bankruptcy is not dependent on the title Plaintiffs give to their

claims (i.e., abuse of process vs. punitive damages).

       Because Plaintiffs have not identified anything—other than conduct in the Frisco

Bankruptcy case—to support their Punitive Damages Claim, the Court must dismiss this claim

pursuant to C.R.C.P. 12(b)(1) for lack of subject matter jurisdiction or enter judgment against

Plaintiffs on this claim pursuant to C.R.C.P. 56. There is no genuine issue of material fact that


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Plaintiffs are not entitled to recover damages based on actions before a bankruptcy court as a matter

of law.

                                            CONCLUSION

          Plaintiffs are attempting to revive their failed abuse of process claim by sneaking it through

a back door. But the mere act of demanding punitive damages does not create subject matter

jurisdiction where none exists. Because this Court lacks jurisdiction to decide whether actions in

the Frisco bankruptcy case were proper or improper, summary judgment should enter against

Plaintiffs’ on their Ninth Claim for Relief (Punitive Damages and Treble Punitive Damages). There

is simply no genuine issue of material fact that Plaintiffs have not identified a single action

supporting their Punitive Damages Claim as a matter of law.

Dated: May 19, 2023.

                                                 Respectfully Submitted,

                                                 CHIPMAN GLASSER, LLC

                                                 /s/ Daniel W. Glasser
                                                 Daniel W. Glasser, No. 37716
                                                 Jennifer M. Osgood, No. 35070

                                                 Counsel for Defendants Galaxy Management
                                                 Company, LLC, Jagmohan Dhillon, Abbas
                                                 Consulting, Inc, Frisco Acquisition, LLC, and
                                                 Defendant/Counterclaimant Denver Gateway, LLC




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                                CERTIFICATE OF SERVICE
     I hereby certify that on this 19th day of May, 2023, a true and correct copy of the foregoing
DHILLON, GALAXY, FRISCO, AND DENVER GATEWAY’S MOTION FOR SUMMARY
JUDGMENT ON PLAINTIFFS’ NINTH CLAIM FOR RELIEF (PUNITIVE DAMAGES
AND TREBLE PUNITIVE DAMAGES) was filed via CCEF and served as follows:
       Richard B. Podoll, No. 8775
       Robert C. Podoll, No. 8776
       Jaqueline E.M. Hill, No. 47789
       PODOLL & PODOLL, P.C.
       5619 DTC Parkway, Suite 1100
       Greenwood Village, CO 80111
       (303) 861-4000
       rich@podoll.net
       bob@podoll.net
       jacqui@podoll.net
       Counsel for Plaintiffs/Counterclaim
       Defendants Wanda Bertoia and
       WPB Hospitality, LLC

       Kevin P. Perez #27441
       NEMIROW PEREZ, P.C.
       600 17th Street, Suite 2800 South
       Denver, CO 80202
       (720) 638-1234
       kperez@nemirowperez.com
       Counsel for Defendants Brett Payton
       and Coan, Payton & Payne, LLC

                                                    /s/ James A. Kin
                                                    Attorney




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