david gingras declaration

DECLARATION OF DAVID S. GINGRAS

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

GIN

GR

AS

LA

W O

FFIC

E, PLLC

3941 E

. C

HA

ND

LER

BLV

D., #

106-2

43

PH

OEN

IX, A

RIZ

ON

A 8

5048

David S. Gingras, #021097 Gingras Law Office, PLLC 3941 E. Chandler Blvd., #106-243 Phoenix, AZ 85048 Tel.: (480) 668-3623 Fax: (480) 248-3196 [email protected] Attorney for Plaintiff Xcentric Ventures, LLC

UNITED STATES DISTRICT COURT

DISTRICT OF ARIZONA XCENTRIC VENTURES, LLC, an Arizona limited liability company, Plaintiff, v. LISA JEAN BORODKIN et al., Defendants.

Case No.: 11-CV-1426-GMS


IN SUPPORT OF PLAINTIFF’S

RESPONSE TO DEFENDANT LISA

BORODKIN’S MOTION TO DISMISS

FOR FAILURE TO STATE A CLAIM

I, David S. Gingras declare as follows:

1. My name is David Gingras. I am a United States citizen, a resident of the

State of Arizona, am over the age of 18 years, and if called to testify in court or other

proceeding I could and would give the following testimony which is based upon my own

personal knowledge unless otherwise stated.

2. I am an attorney licensed to practice law in the States of Arizona and

California, I am an active member in good standing with the State Bars of Arizona and

California and I am admitted to practice and in good standing with the United States

District Court for the District of Arizona and the United States District Court for the

Northern, Central, and Eastern Districts of California.

3. I represent Plaintiff XCENTRIC VENTURES, LLC (“Xcentric”) in this

matter and I have possession of Xcentric’s files relating to this matter which I have

personally reviewed and with which I am personally familiar.

Case 2:11-cv-01426-GMS Document 107-1 Filed 08/13/12 of 19

2


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

GIN

GR

AS

LA

W O

FFIC

E, PLLC

3941 E

. C

HA

ND

LER

BLV

D., #

106-2

43

PH

OEN

IX, A

RIZ

ON

A 85048

4. Attached hereto as Exhibit A is a true and correct highlighted copy of a

transcript from a hearing held on July 12, 2010 in the California Central District Court

action which gives rise to this case.

Pursuant to 28 U.S.C. § 1746, I declare under penalty of perjury under the laws of the

United States of America that the foregoing is true and correct.

EXECUTED ON: August 13, 2012.

GINGRAS LAW OFFICE, PLLC

/S/ David S. Gingras

David S. Gingras

Attorney for Plaintiff


3


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

GIN

GR

AS

LA

W O

FFIC

E, PLLC

3941 E

. C

HA

ND

LER

BLV

D., #

106-2

43

PH

OEN

IX, A

RIZ

ON

A 85048

CERTIFICATE OF SERVICE

I hereby certify that on August 13, 2012 I electronically transmitted the attached

document to the Clerk’s Office using the CM/ECF System for filing, and for transmittal

of a Notice of Electronic Filing to the following:

John S. Craiger, Esq.

David E. Funkhouser III, Esq.

Krystal M. Aspey, Esq.

Quarles & Brady LLP

One Renaissance Square

Two North Central Avenue

Phoenix, Arizona 85004-2391

Attorney for Defendant Lisa J. Borodkin

Raymond Mobrez

Iliana Llaneras

PO BOX 3663

Santa Monica, CA 90408

Defendants Pro Se

And a courtesy copy of the foregoing delivered to:

HONORABLE G. MURRAY SNOW

United States District Court

Sandra Day O’Connor U.S. Courthouse, Suite 622

401 West Washington Street, SPC 80

Phoenix, AZ 85003-215

/s/David S. Gingras


Exhibit A


1 UNITED STATES DISTRICT COURT

2 CENTRAL DISTRICT OF CALIFORNIA

3 ---

4

5 THE HONORABLE STEPHEN V. WILSON, U.S. DISTRICT JUDGE PRESIDING

6

7 ASIA ECONOMIC INSTITUTE, LLC, ) et al., )

8 ) Plaintiffs, )

9 ) vs. ) No. CV 10-1360-SVW

10 ) )

11 XCENTRIC VENTURES, LLC, et al. ) )

12 Defendants. ) _______________________________)

13

14

15

16 REPORTER'S TRANSCRIPT OF PROCEEDINGS

17 LOS ANGELES, CALIFORNIA

18 MONDAY, JULY 12, 2010

19

20

21

22 _____________________________________________________________

23 DEBORAH K. GACKLE, CSR, RPR United States Courthouse

24 312 North Spring Street, Room 402A Los Angeles, California 90012

25 (213) 620-1149

UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA

COURT REPORTER DEBORAH K. GACKLE


2

1 APPEARANCES OF COUNSEL:

2

3

4 For the Plaintiff:

5

6 ASIA ECONOMIC INSTITUTE BY: LISA J. BORODKIN

7 BY: DANIEL F. BLACKERT11766 Wilshire Boulevard, Suite 260

8 Los Angeles, California 90025

9

10 For the Defendants:

11

12 LAW OFFICES OF DAVID S. GINGRAS BY: DAVID S. GINGRAS

13 4072 E. Mountain Vista DrivePhoenix, Arizona 85048

14

15 JABURG & WILK BY: MARIA CRIMI SPETH

16 3200 North Central Avenue, Suite 2000Phoenix, Arizona 85012

17 602-248-1000Fax: 602-248-0522

18 Email: [email protected]

19

20

21 - - - - -

22

23

24

25




3

1 LOS ANGELES, CALIFORNIA; MONDAY, APRIL 19, 2010; 2:15 P.M.

2 - - - - -

3

4 THE CLERK: Item 11, CV 10-1360-SVW, Asia Economic

5 Institute, et al. versus Xcentric Ventures, LLC, et al.

6 Counsel, please state your appearances.

7 MS. BORODKIN: Good afternoon, Your Honor. Lisa

8 Borodkin for the plaintiffs.

9 MR. BLACKERT: Good afternoon, Your Honor. Daniel

10 Blackert for the plaintiffs.

11 MR. GINGRAS: Good afternoon, Your Honor. David

12 Gingras on behalf of defendants Xcentric Ventures, LLC, and Ed

13 Magedson.

14 MS. SPETH: Good afternoon, Your Honor. Maria Speth

15 on behalf of the defendants, as well.

16 THE COURT: Let me ask first the plaintiff: The two

17 predicate acts that are in the complaint -- extortion and mail

18 fraud -- the focus of this motion has been the extortion

19 predicate act. The mail fraud -- strike that -- wire fraud has

20 been hardly referenced and certainly not described in any

21 detail at all.

22 Are you pursuing the wire fraud as a predicate act

23 also?

24 MS. BORODKIN: Your Honor, we are, and that was one

25 of the things we were hoping to request from you today due to




4

1 recently discovered evidence, yes.

2 THE COURT: Answer my question. The answer is yes,

3 correct?

4 MS. BORODKIN: Correct.

5 THE COURT: And so can you give me a description of

6 what the wire fraud allegation is, because obviously the

7 complaint, if there had been a 9B --

8 (Interruption in the proceedings.)

9 THE COURT: Now, if there had been a Rule 9B motion

10 filed in this case, the Rule 9B motion would undoubtedly have

11 been granted because wire fraud is the type of allegation that

12 falls within Rule 9B, and there is no description.

13 Can you tell me, at least orally, how you would deal

14 with that if you were allowed to replead it, and I'll have to

15 give you that opportunity, but I'm interested in your overview

16 now. Tell me how you would replead, if given the opportunity.

17 MS. BORODKIN: Your Honor, we would replead it by

18 stating with particularity specific times, places and speakers

19 and recipients of representations to people that Ripoff reports

20 are never taken down, that the statement was false, it was made

21 with the intent to defraud the recipients of the statements

22 into pursuing applications into the corporate advocacy program.

23 THE COURT: Even if that were pled, how would that

24 constitute a fraud on the plaintiff?

25 MS. BORODKIN: Because it's false that reports are




5

1 never taken down, and --

2 THE COURT: Let's say there was a false statement.

3 There has to be causation, injury and so forth. How would that

4 all develop under your theory? In other words, it seems that

5 the more likely type of allegation would be that these reports

6 are taken down and then they weren't. Someone would say, Well,

7 look, I joined the corporate program or I paid the fee or

8 whatever because of the representation that these defamatory

9 allegations would be removed. Now you're saying -- you're not

10 saying that, you're saying that the fraud was -- that defendant

11 said they would be never taken down.

12 Where is the injury?

13 MS. BORODKIN: Your Honor, I apologize. This is all

14 very recent that we discovered contradictory evidence in the

15 record. Generally, the injury is that subjects of the Ripoff

16 reports may have declined to pursue certain avenues of relief

17 that may been available to them had they known the true facts

18 which are there are limited circumstances in which reports may

19 be taken down, but they simply don't get that far because their

20 representations on the websites and the correspondence.

21 Defendants stated copiously there is only one way to address

22 these reports.

23 THE COURT: You're saying that the defendant says

24 these allegedly defamatory comments by third parties will never

25 be removed, and you're saying that that is false because there




6

1 is an instance that you allege in which arguably it was

2 removed.

3 So if you establish that that statement is false, how

4 does that constitute wire fraud as to your client? In other

5 words, what would your client have done differently had that

6 reputation been set forth truthfully?

7 MS. BORODKIN: Your Honor, we appreciate what the

8 court's trying to do and narrow this. The truth is there are a

9 whole host of --

10 THE COURT: Ma'am, here's what you have to do, and I

11 say that kindly, no indictment of you intended: Along the way

12 here between you and the defendant, you've created a horrible

13 record to the point that the magistrate has been so upset that

14 he called both of you uncivil and he's considering sanctions

15 against both of you, and that can't persist. I can see where

16 some of the problem is because you're not listening to my

17 question. You want to get your point across. You have to

18 listen to my question. This is not a deposition office where

19 you can scream at each other as you have. You have to focus.

20 The question again is if the defendant had, in your

21 view, said the truth that these defamatory statements will be

22 taken down as opposed to never been taken down, how would that

23 have defrauded your client?

24 MS. BORODKIN: I'm sorry --

25 THE COURT: For argument's sake, I'm acknowledging or




DG

Highlight

DG

Highlight

DG

Highlight

DG

Highlight

DG

Highlight

DG

Highlight

DG

Highlight

7

1 accepting for the moment that the statement wasn't true. In

2 other words, I'm agreeing with you, just for argument's sake.

3 How would that lead to a wire fraud against your

4 client? What would your client have done differently?

5 MS. BORODKIN: Your Honor, perhaps I'd have to ask my

6 client.

7 THE COURT: See, that's the problem, ma'am. This is,

8 in my view, pretty -- I'm looking for a word that is not

9 pejorative that still makes the point -- pretty unacceptable

10 lawyering because under Rule 11 you've now admitted to a

11 Rule 11 violation. You filed a wire fraud allegation as a

12 predicate act for your RICO. As you stand at the lectern, you

13 can't even, in a best-world sense, articulate a wire fraud.

14 You now say you have to speak to your client. The rules

15 clearly say that you have to have a good-faith basis for

16 alleging something in a complaint, and how could you have had a

17 good-faith basis without speaking to your client and now being

18 totally unable to articulate a basis?

19 MS. BORODKIN: Your Honor, with all do respect, I was

20 not counsel of record when the complaint was filed. Would you

21 like to inquire as to the attorney who did prepare and file

22 those papers?

23 THE COURT: May be. I mean it may very well be that

24 that person is the person that has to be called to answer. On

25 the other hand, I'm not so sure that the reach of Rule 11




DG

Highlight

DG

Highlight

DG

Highlight

8

1 doesn't extend to someone who takes over a case, especially

2 when the case has reached motion practice, but I'll leave that

3 aside for the moment. Let's leave that aside for the moment.

4 Okay. Now, I just want to review with you certain

5 matters. The magistrate judge gave you an hour and a half of

6 additional time to take the deposition of defendant Magedson.

7 MR. GINGRAS: Magedson.

8 THE COURT: Magedson. And forgetting for the moment

9 that there's been some inability -- for lack of a better

10 word -- for the parties to find a time and place, one of the

11 matters that you want to -- the three matters that I can see

12 that you want to inquire further of Magedson are the number of

13 persons enrolled in the category program, correct? Is that one

14 of them?

15 MS. BORODKIN: Correct, Your Honor.

16 THE COURT: One of the three.

17 Then you want information about Magedson's cell phone

18 and whether he uses his cell phone to conduct business. That's

19 the second matter.

20 MS. BORODKIN: Your Honor, to be more specific, we

21 would like to continue the line of questioning that was

22 commenced when we started to discuss the cell phones. He did

23 state that he uses his cell phone for business.

24 THE COURT: I see.

25 And then you want to question him about whether any




9

1 positive material is ever posted on the Ripoff Report website,

2 correct?

3 MS. BORODKIN: Again, to be perfectly clear, he did

4 testify that positive reports are permitted to be posted. We

5 wanted to inquire further as to the nature of those reports, if

6 there was anything other than a rebuttal.

7 THE COURT: I see. Those are the three matters that

8 you want to inquire further of in the hour-and-a-half

9 deposition.

10 MS. BORODKIN: There are those and also, in

11 particular, we wanted to understand further steps such as the

12 second questionnaire that Mr. Magedson testified to and the cap

13 agreement that he testified to.

14 THE COURT: I see. With regard to this -- those are

15 the matters. Thank you for summarizing them.

16 Now, with regard to this questionnaire, aside from

17 the deposition, the plaintiff also wants to see that

18 questionnaire. You've described the questionnaire, but I've

19 never seen the questionnaire.

20 Do you have the questionnaire with you?

21 MR. GINGRAS: I do not, Your Honor.

22 THE COURT: Well, why haven't you shown it to the

23 plaintiff?

24 MR. GINGRAS: Well, we'd be happy to, Your Honor, if

25 it was relevant to any of the --




10

1 THE COURT: I didn't ask you. I want you to -- now,

2 the questionnaire, was the questionnaire given to the

3 plaintiff?

4 MR. GINGRAS: No.

5 THE COURT: Was the questionnaire given to the

6 plaintiff?

7 MS. BORODKIN: No, Your Honor.

8 THE COURT: I see. In any event, I want the

9 questionnaire submitted. Thank you.

10 Now, actually two documents, something called a

11 second questionnaire and a cap agreement, were either of those

12 given to the plaintiff?

13 MR. GINGRAS: They were not, Your Honor.

14 THE COURT: Then I wanted to give the plaintiff an

15 opportunity to -- yes. In your papers, you, the plaintiff,

16 cited, and seemed to rely heavily on, a case captioned Monex v.

17 Gilliam reported at 680 F.Supp. 2nd 1148.

18 I have considered that case. That was the principal

19 case that you cited. Interestingly, your opponent didn't cite

20 any extortion cases so, the only case that has been brought to

21 my attention in these pleadings is the case that you have

22 relied on.

23 Is there anything that you want to tell me beyond

24 what you've already described as to the significance of that

25 case? I have considered the case. I'm just asking whether




11

1 there is something about that case beyond what you prescribed

2 and what I've read. Clearly it's an extortion case, and I've

3 considered it. You don't have to respond; I'm just giving you

4 the opportunity.

5 MS. BORODKIN: Your Honor, you're correct. That is

6 the --

7 THE COURT: The only case that either side --

8 MS. BORODKIN: It's not. Flatley was cited and

9 discussed in our opposition to the motion to strike.

10 THE COURT: Let me ask you this -- all right. Thank

11 you. You may be seated. Anything else?

12 MS. BORODKIN: Just the five things we were asking

13 for today in the terms of relief --

14 THE COURT: Thank you very much. You may be seated.

15 The motion for summary judgment as to the extortion

16 claim is granted. The -- and I'll issue an order.

17 Will you be making a Rule 9B motion?

18 MR. GINGRAS: Your Honor, I'd probably prefer to see

19 the court's order before I make that determination. When you

20 said "extortion," I'm not sure if you refer to the RICO claim

21 or extortion as simply one of the predicate acts to that claim.

22 I think that makes a difference in terms of whether there is a

23 RICO claim --

24 THE COURT: With all due expect, sir, what you just

25 said didn't come together because all it takes is, in RICO, is




12

1 a pattern of racketeering activity which is described in terms

2 of specific predicate acts. Wire fraud is a predicate act;

3 extortion is a predicate act.

4 Now, by granting the extortion predicate claim, that

5 means that the only basis for a RICO case would be wire fraud,

6 and of course it would require more than just an act of wire

7 fraud. It would require a pattern and all the other

8 prerequisites. I note -- just one moment -- let me just turn

9 to another case for a second.

10 (Unrelated matter, not transcribed herein)

11 THE COURT: That means that if the plaintiff can

12 prove a pattern of racketeering activity through wire fraud,

13 then arguably if the other prerequisites of RICO are met,

14 namely, enterprise, causation, injury, they have a claim.

15 So what I am saying is that under RICO law, even

16 though RICO itself doesn't have to be the subject of the

17 heightened pleading requirement under Rule 9B, if a predicate

18 act under RICO is subject to a heightened pleading requirement

19 such as in this case, wire fraud, then it has to be done; and

20 I'm just trying to be efficient about it. This complaint would

21 not withstand a Rule 9B motion.

22 You don't have to make a Rule 9B motion, but if you

23 did make one, it undoubtedly would be granted and it would

24 compel the plaintiff to plead if they could with particularity.

25 Then you could make a motion to dismiss, which would be ruled




13

1 upon. If motion were denied, then we would proceed to

2 discovery.

3 And so while in light of what I've said earlier, a

4 further deposition of Magedson is not required. If the

5 plaintiff were able to sustain a pattern of racketeering

6 activity as to wire fraud, I would allow Magedson to be deposed

7 and for more than the hour and a half if they got into wire

8 fraud because that would be a new ball game.

9 So rather than have you make a motion and have it

10 responded to, the complaint is so patently deficient, I

11 would -- if you made a motion, give the plaintiff -- grant the

12 motion, allow the plaintiff an opportunity to replead.

13 Do you have such a motion?

14 MR. GINGRAS: I would, Your Honor.

15 THE COURT: Then your motion is granted.

16 MS. BORODKIN: Your Honor, if I could be heard on

17 that.

18 THE COURT: Yes. What do you want to be heard about?

19 MS. BORODKIN: On the motion to strike, you asked for

20 a RICO case statement --

21 THE COURT: I'm not -- ma'am, I don't think you're

22 listening to what is going on. This is very distressing.

23 There was nothing about a RICO case statement. I think you're

24 not following the colloquy. We're focused on the pleading of

25 the wire fraud as a predicate act. I said nothing about a RICO




14

1 case statement; I've not ordered a RICO case statement.

2 MS. BORODKIN: I apologize.

3 THE COURT: Yes, please.

4 I'll grant the motion without prejudice, and how much

5 time would you need to replead the RICO case? You could

6 replead it the same way except you would have to articulate

7 within Rule 9B the wire fraud.

8 How much time would you need, sir?

9 MR. BLACKERT: About two weeks, Your Honor. Is that

10 appropriate?

11 THE COURT: Two weeks.

12 MR. BLACKERT: Thank you, Your Honor.

13 THE COURT: The case remains in its bifurcated state

14 until then. In other words, the RICO is bifurcated from the

15 other claims.

16 And the other ruling I will make is this: That in

17 light of the lack of jury demand, it is a court trial. Thank

18 you. Then I'll set -- assuming that two weeks from now the

19 complaint is refiled, I'll give you 10 days thereafter to make

20 a motion if you wish to dismiss, and if you don't make a motion

21 to dismiss, notify us so you can begin your discovery.

22 And then set up a hearing date, Paul, or schedule in

23 light of that.

24 We can do that in a minute order. We'll send you a

25 minute order.




15

1 MR. GINGRAS: Your Honor --

2 THE COURT: I don't want to hear any more.

3 MR. GINGRAS: I'm sorry.

4 - - - - - -

5

6

7 C E R T I F I C A T E

8

9 I hereby certify that the foregoing is a true and

10 correct transcript from the stenographic record of

11 the proceedings in the foregoing matter.

12

13 July 29, 2010

14 __________________________ ___________________

15 Deborah K. Gackle Date Official Court Reporter

16 CSR No. 7106

17

18

19

20

21

22

23

24

25




david gingras declaration

Business