Case 2:11-cv-01426-GMS Document 64 Filed 04/09/12 Page 1 of 11

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Iverson, Yoakum, Papiano & Hatch

633 West Fifth Street, Suite 6400 Los Angeles, CA 90071
TELEPHONE: 213.624.7444

Lisa J. Borodkin (CA Bar #196412) lborodkin@iyph.com Admitted Pro Hac Vice
Firm State Bar No. 00443100 Renaissance One, Two North Central Ave. Phoenix, AZ 85004-2391
TELEPHONE 602.229.5200

Quarles & Brady LLP

John S. Craiger (#021731) John.Craiger@quarles.com David E. Funkhouser III (#022449) David.Funkhouser@quarles.com Attorneys for Defendant Lisa Jean Borodkin IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA XCENTRIC VENTURES, LLC, an Arizona limited liability company, Plaintiff, v. LISA JEAN BORODKIN and JOHN DOE BORODKIN, husband and wife; RAMOND MOBREZ and ILIANA LLANERAS, husband and wife; DANIEL BLACKERTS and JANE DOE BLACKERTS, husband and wife; ASIA ECONOMIC INSTITUTE, LLC, a California limited liability company, DOES 1-10, inclusive Defendants. No. 2:11-CV-01426-PHX-GMS DEFENDANT LISA JEAN BORODKIN'S MOTION TO STRIKE PURSUANT TO FED. R. CIV. P. 12(e) OR, IN THE ALTERNATIVE, MOTION FOR MORE DEFINITE STATEMENT (Assigned to the Honorable G. Murray Snow) (Oral Argument Requested)

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I.

PRELIMINARY STATEMENT This is an action for malicious prosecution under California law. On March 1,

2012, this Court ordered Plaintiff Xcentric Ventures LLC (Xcentric) to provide a more definite statement regarding [Defendant] Borodkins alleged improper motives and purposes. See Doc. 52 at 19:22 (emphasis added). This Court found that such an

allegation is essential to sufficiently enable [Borodkin] to answer or prepare for trial. See Doc. 52 at 19:9. On March 16, 2012, Xcentric filed the Verified First Amended Complaint (Amended Complaint). See Doc. 55. The Amended Complaint does not cure the ambiguities in the initial complaint regarding Defendant Lisa Jean Borodkin (Ms. Borodkin)s purported malice. Instead, Xcentric introduces a new set of ambiguities by purporting to plead 9 improper motives, each of which Xcentric collectively attributes both to Ms. Borodkin and her former co-counsel, Defendant Daniel Blackert (Mr. Blackert). See Doc. 55 at 82a.i. The allegations are ambiguous and inexcusably burdensome. They do not enable Ms. Borodkin to answer or prepare for trial. It is unclear how many of the purported improper motives apply to Ms. Borodkin alone, if any. Ms. Borodkin cannot reasonably respond to what Mr. Blackerts subjective motives were. Any responsive pleading will be equally ambiguous and cause undue burden in the form of discovery and discovery disputes. Xcentrics manner of pleading, if permitted, allows Xcentric to accomplish the goal of harassing Ms. Borodkin through frivolous allegations lacking in factual investigation and evidentiary support. The inclusion of Mr. Blackert in Xcentrics allegations against Ms. Borodkin is gratuitous, given that Mr. Blackert has not appeared in this action and Xcentric had already entered a default against Mr. Blackert with respect to the initial Complaint. See Doc. 50. However, these ambiguous allegations allow Xcentric a pretext

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to submit Ms. Borodkin to discovery that could apply to her and/or Mr. Blackert, while preserving Xcentrics plausible deniability to defend against a later Rule 11 motion based on the lack of evidentiary support for these allegations as against Ms. Borodkin.1 This is Xcentrics second attempt to specifically plead malice against Ms. Borodkin. Xcentric has refused to include specific allegations of malice against Ms. Borodkin, despite this Courts clear directive and detailed analysis of malicious prosecution claims under California law. See Doc. 52 at 17:22-19-23. Accordingly, Ms. Borodkin respectfully requests this Court to strike the First Amended Complaint under Rule 12(e) as against her, without leave to replead. Alternatively, Ms. Borodkin respectfully requests this Court to order Xcentric to provide a more definite statement regarding Ms. Borodkins alleged improper purpose, separate and apart from that of Mr. Blackert, so that she can reasonably frame a response, not be left to guess which allegations refer to her, as opposed to herself and/or Mr. Blackert, and be afforded the full protection of Rule 11. II. RELEVANT FACTUAL AND PROCEDURAL BACKGROUND Xcentric commenced this action by filing the Verified Complaint on July 18, 2011. See Doc. 1. This action, as it concerns Ms. Borodkin, generally arises out of the continuation of federal litigation in the Central District of California (the California Action). On March 1, 2012, this Court granted in part and denied in part Ms. Borodkins motion under Rule 12(e) for a more definite statement regarding Ms. Borodkins purported malice in continuing the California Action. In a detailed order, this Court noted that, in malicious prosecution claims under California law, the malice element is Allowing the current form of pleading to stand will deprive Ms. Borodkin of the protection of Rule 11, as Xcentric will argue that it meant Mr. Blackert and/or Ms. Borodkin in each instance.
1

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distinct from the without probable cause element in that malice requires subjective intent or purpose on the part of the defendant: The plaintiff must plead . . . actual ill will or some improper ulterior motive . . . The Complaint does not make clear, for instance, whether Plaintiff is alleging that Borodkin had her own, independent improper purposes, much less provide any detail regarding what Borodkins alleged improper purposes were. Plaintiff must therefore provide a more definite statement regarding Borodkins alleged improper motives and purposes. Doc. 52 at 18:16-17 (citing Downey Venture v. LMI Ins. Co., 66 Cal. App. 4th 478, 494 (1998); 19:10-14 (emphasis added). This Court did not order Xcentric to provide additional details regarding Blackert. Blackert failed to appear. On December 16, 2011, this Court entered default against Blackert upon Xcentrics request. See Doc. 50. On March 16, 2012, Xcentric filed the Amended Complaint. See Doc. 55. Xcentrics sole allegations regarding Ms. Borodkins purported subjective malice are combined with allegations against Blackert: 82. Defendants BORODKIN and BLACKERT continued the Asia Litigation solely for improper purposes. Specifically, the action was continued solely for nonlegitimate reasons including, but not limited to, the following: a. To pressure Xcentric to remove material from the Ripoff Report website, without any legal basis for doing so, rather than incurring significant legal fees defending a frivolous case; b. To use the threat of continued litigation as improper leverage to coerce Xcentric into not pursuing claims against BORODKIN or BLACKERT for their past conduct in the Asia Litigation; c. To improperly attain unwarranted publicity for their own careers; d. To force Xcentric to change the manner in which it conducts business by falsely accusing Xcentric of wrongful conduct despite knowing that Xcentrics conduct was, and is, entirely lawful;

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e. To provide unwarranted support to critics of the Ripoff Report website; f. To stifle the First Amendment rights of XCENTRIC and users of the Ripoff Report website; g. To cause XCENTRIC to divert its resources to defending a frivolous case rather than using those resources to improve the Ripoff Report site; h. To intimidate XCENTRIC into limiting the publics ability to use the Ripoff Report website to publish truthful information and access truthful information published by others; i. To wrongfully investigate Magedsons personal life and to obtain and publicly release personal, private, confidential and/or embarrassing information solely for the purpose of embarrassment and harassment. Doc. 55 82 (emphasis added). Xcentric does not (and cannot) allege that Blackert and Borodkin have a law firm partnership or otherwise provide any reason that the subjective motive of one is attributable to the other. These allegations are especially ambiguous, given the Amended Complaints other allegations that Blackert and Borodkin worked at cross-purposes. For example, the

Amended Complaint alleges that Blackert wanted to withdraw from representing the plaintiffs in the California Action but that Borodkin actively urged and pressured Blackert to continue the litigation, see Doc. 55 at 78. The Amended Complaint also attaches as an exhibit a May 7, 2010 email that Blackert sent to Xcentrics counsel without including Borodkin, see Doc. 55 at Ex. I.

LEGAL ARGUMENT A. Rule 12(e)

Rule 12(e) provides in relevant part: If the court orders a more definite statement and the order is not obeyed within 14 days after notice of the order or within the time the court sets, the court may strike the pleading or issue any other appropriate order. Fed. R. Civ. Proc. 12(e).

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To comply with an order for a more definite statement, "the party must submit an amended pleading containing sufficient detail to satisfy the court and to meet his opponent's valid objections to the earlier pleading." See 5A Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure 1379, p. 636 (2d ed. 1990). If the Rule 12(e) order is not complied with and the subject of the order is the complaint, the complaint may be stricken, which has the "effect of a dismissal of the action." See id. 1379, at 640; Sefton v. Jew, 204 F.R.D. 104, 106 (W.D. Tex. 2000). In general where a plaintiff fails to follow an order of the District Court to provide further detail that would put the defendant on notice of the claims against it, the court may strike the pleading. See Fed. R. Civ. Proc. 12(e); Von Poppenheim v. Portland Boxing & Wrestling Com., 442 F.2d 1047, 1053 (9th Cir. 1971). As an initial matter, the Verified Amended Complaint was not, in fact, timely. This Courts order for a more definite statement was issued March 1, 2012. See Doc. 52. Xcentric did not file the Amended Complaint until March 16, 2012 more than 14 days after the order. See Doc. 55. That alone would justify granting this motion to strike the Amended Pleading. The more serious defect in the Amended Complaint, however, is that it does not cure the ambiguity or furnish the details that were the subject of Ms. Borodkins previous motion and this Courts March 1, 2012 order. B. The Amended Complaint Remains Ambiguous and Vague Regarding Ms. Borodkins Alleged Malice. As stated in Ms. Borodkins previous motion, a Rule 12(e) motion is the most appropriate vehicle for addressing ambiguous allegations to multiple defendants. Whereas the initial Complaint suffered from ambiguity between Ms. Borodkin and her former clients and co-counsel with regard to the element of malice, the Amended Complaint introduces ambiguity between Ms. Borodkin and her former co-counsel, Mr. Blackert, on the element of malice. See Doc. 55 at 82. This, in effect, tethers Ms. Borodkins defense

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to that of her absent co-defendant, Mr. Blackert. Ms. Borodkin cannot reasonably frame a response when it is unclear how many of the 9 new theories of malice may or may not apply to her. Given this Courts explicit order of March 1, 2012 (Plaintiff must therefore provide a more definite statement regarding Borodkins alleged improper motives and purposes), Xcentrics failure to cure the ambiguity is not excusable. Ms. Borodkins previous motion was clear as to the additional details requested, and this Courts order of March 1, 2012 was equally clear as to the more definite statement required. Xcentric failed to provide such details. This Court may therefore strike the pleading as against Ms. Borodkin under Rule 12(e). C. The Amended Complaint Includes No New Non-Conclusory Facts Regarding Ms. Borodkins Alleged Malice. In addition to being ambiguous as to whom the 9 theories of malice in Paragraph 82 apply, the new theories of malice are also wholly conclusory. They consist only of motives attributed to Ms. Borodkin and Mr. Blackerts alleged states of mind and do not furnish any facts of actions taken by Ms. Borodkin or Mr. Blackert that would allow a fact-finder to arrive at these conclusions. Specifically, Paragraph 82.a. (To pressure Xcentric to remove material from the Ripoff Report website, without any legal basis for doing so, rather than incurring significant legal fees defending a frivolous case) is tautological, as the California Action itself tested the legality of Xcentrics business. Paragraph 82.b. (To use the threat of continued litigation as improper leverage to coerce Xcentric into not pursuing claims against BORODKIN or BLACKERT) is illogical, and lacks corresponding factual allegations that continued litigation was threatened. Paragraph 82.c. (To improperly attain unwarranted publicity for their own

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careers) lacks any corresponding factual allegations and would not establish malice. Paragraph 82.d. (To force Xcentric to change the manner in which it conducts business by falsely accusing Xcentric of wrongful conduct despite knowing that Xcentrics conduct was, and is, entirely lawful) is tautological, as the legality of Xcentrics business was at issue in the California Action. Paragraph 82.d. (To provide unwarranted support to critics of the Ripoff Report website) is also tautological and lacking in corresponding factual allegations. Paragraph 82.e. (To stifle the First Amendment rights of XCENTRIC and users of the Ripoff Report website) is lacking in corresponding factual allegations. Paragraph 82.f. (To cause XCENTRIC to divert its resources to defending a frivolous case rather than using those resources to improve the Ripoff Report site) does not provide the details ordered, as this Court previously noted that lacking in probable cause is a separate element from malice. Paragraph 82.h. (To intimidate XCENTRIC into limiting the publics ability to use the Ripoff Report website to publish truthful information and access truthful information published by others) is conclusory, as it is lacking in any corresponding factual allegations. Paragraph 82.i. (To wrongfully investigate Magedsons personal life and to obtain and publicly release personal, private, confidential and/or embarrassing information solely for the purpose of embarrassment and harassment) is lacking in any corresponding factual allegations. These new allegations do not provide the details ordered by this Court and would not nudge the pleading over the line from conceivable to plausible under Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 1974, 167 L. Ed. 2d 929, 949 (2007); see also Yadin Co. v. City of Peoria, 2008 U.S. Dist. LEXIS 109501, at *13-14 (D. Ariz. Mar. 25, 2008). Accordingly, this motion to strike or for more definite statement

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should be granted. D. The Equities Warrant Granting this Motion.

Under the circumstances of this particular case, allowing Xcentric to plead in this catch-all, ambiguous manner, even after this Court has ordered it to provide a more definite statement as to Ms. Borodkins malice, would be unjust. Xcentrics manager and owner, Edward Magedson, has threatened Ms. Borodkin with a long and drawn out court battle unless she provides info on things [an unrelated third party] did wrong. See Doc. 25 at Ex. 1 (Aug. 10, 2011 email from Ed Magedson to Lisa Borodkin). Therefore, this motion should be granted and the Amended Complaint stricken as against Ms. Borodkin, without leave to replead.

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IV.

CONCLUSION For the foregoing reasons, Ms. Borodkin respectfully requests that this Court strike

the Amended Complaint against her under Rule 12(e) as untimely and for failing to provide the more definite statement ordered by this Court on March 1, 2012. In the alternative, this Court should order Xcentric to furnish a more definite statement, alleging Ms. Borodkins alleged malice in non-conclusory terms, without combining it with allegations of malice against any other defendant. RESPECTFULLY SUBMITTED this 9th day of April, 2012. IVERSON,th YOAKUM, PAPIANO & HATCH 633 West 5 Street, 64th Floor Los Angeles, CA 90071 By /s/ Lisa J. Borodkin Lisa J. Borodkin Admitted Pro Hac Vice QUARLES & BRADY LLP Renaissance One, Two North Central Avenue Phoenix, AZ 85004-2391 John S. Craiger David E. Funkhouser III Attorneys for Lisa Jean Borodkin

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CERTIFICATE OF SERVICE I hereby certify that on April 9, 2012, I electronically transmitted the attached document to the Clerk's Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to the following CM/ECF registrant: David S. Gingras, Esq. (David@GingrasLaw.com) Attorneys for Plaintiff Hartwell Virginia Harris (hartwell@hartwellharris.com) Attorney for Defendants Llaneras and Asia Economic Institute LLC Raymond Mobrez pro se (raymond@asiaecon.org)

/s/ Lisa J. Borodkin