July & August 2023 – Update #1

So many changes have happened since July, it would be too much to absorb with one post. Therefore, we have broken up volumes of legal documents into more digestible sections, with today’s being #1.

But we wanted to begin with one homeowner’s view, who is clearly feeling like the rest of us, unsure of when and how this lawsuit is going to end.
Many of our website’s emails express the same fatigue and frustration while waiting for a resolution that doesn’t seem to get any closer.

Lady Justice wears a blindfold to show impartiality to the one being judged, holds a scale to signify weighing the evidence, and a sword to symbolize enforcement of the court’s decision after hearing all sides. But I would like to add one more: her ears are uncovered as the court’s rulings are based on testimony and evidence argued before the judge, by the lawyers.

Each party in this lawsuit – plaintiffs, managers, and owner – have been represented by lawyers except for one. Can an impartial ruling be truly made without hearing from those who stand to lose the most? For those who will have to live with the decisions made by and for the other parties, but not for homeowners?

The plaintiffs were to be our representatives, our voice, but there has not been a single meeting where they asked us what we want from this lawsuit.
The intervention was to be our choice in joining the lawsuit or not, but the judge denied it, leaving us without a voice or a choice.
Justice for some is not justice for all.

Let’s Get Started:
This update contains quotes from different legal documents which we have dated with names in parentheses to help you follow along. But if your brain starts to feel numb, just scroll to the end where we have 3 general statements about the lawsuit’s status. We also added a personal “Note” after some of the quotes to summarize what it means in plain English.

From July through September, there were changes in lawyers, unexpected actions, and new hearings including one that was deemed an emergency.
In order to understand the context for these current allegations, we need to first look at MJ’sformerlawyer’s (Philip Buri) proposal from May, 2023:

May, 2023: Attorney Philip Buri proposed a Supplemental Protective Order for Disclosure of QuickBooks Files which included the following timeline for the General Protective Order in this case (note this is a supplemental order to an already standing general order as seen in the following):

Feb. 17, 2021– The court (Judge Olson) entered a General Protective Order for discovery in this case.

May 10, 2022– Plaintiffs (Davis and Andersson) requested documents which included MJ Management’s electronic accounting data which were not given.

July 15, 2022– Plaintiffs dismissed MJ Management.

Jan. 11, 2023– Plaintiffs’ Fifth Amended Complaint brought MJ back into the lawsuit and renewed their request for MJ’s electronic accounting data.

Mr. Buri (former MJ lawyer) noted in his May, 2023 proposal that the plaintiffs’ request for MJ’s electronic accounting data would, “require production of highly sensitive financial information unrelated to the Homestead.”

The court (now Judge Freeman, May 2023) granted Mr. Buri’s proposal and entered a Supplemental Protective Order for the plaintiffs (Andersson & Davis) to choose a Certified Public Accountant to “serve as custodian for the electronic QuickBooks files.”

This assigned expert would alone have access for examining and preparing reports, and all his/her work “will be documented and deemed confidential under the Court’s February 17, 2021 Protective Order.” All material would be designated for “Attorneys’ Eyes Only.” Before plaintiffs’ counsel could disclose any contents of the QuickBooks files, they would need to notify MJ’s lawyers in writing which documents they intended for disclosure. MJ could object but if both sides did not agree, they would present their dispute to the court.

Judge Freeman ended his Protective Order with the instruction: “At the conclusion of this case, the expert CPA will erase the QuickBooks files immediately and notify MJ Management’s counsel of its erasure.”
The judge’s final line: “This Ordersupplementsthe Court’s February 17, 2021 Protective Order and does not diminish any protection afforded in earlier Order.”
Note: The 2023 Protective Order adds to the original Protective Order established in 2021, both are to be followed and both are relevant.

Now for the Lawyers:
July 31, 2023– Jeff Possinger, a business law attorney, was hired by MJ Management to represent Mick O’Bryan and Josh Williams in Homestead’s class action lawsuit. Their former attorney, Philip Buri, withdrew as their counsel June 23, 2023.

Mr. Possinger’s co-counsel, Reid Meyers, is an employment attorney as well as a certified mediator. Both are now MJ Management’s legal counsel.

July 31, 2023– 18 Paradise filed partial summary judgment to dismiss the Consumer Protection Act lawsuit (filed in May 2020, alleged RICO and fraud).
Per their court document, reasons are:
“The main function of the CPA is to protect the public interest…The alleged misuse of funds is between the Plaintiffs and MJ Management, and not the public.”
Conclusion: “Plaintiff’s CPA claim must be dismissed as a matter of law because the Plaintiffs fail to satisfy the necessary public interest element.”
Note: We do not yet have a date for when this motion will be heard.

Quotes from Mr. Possinger’s (MJ lawyer) Declaration signedAug.30, 2023:
Aug. 1, 2023– Matthew Davis began emailing “…a series of demands that my co-counsel (Mr. Meyers) and I withdraw from representing the MJ Management Defendants and threatening to bring a motion to disqualify us…”

Aug. 16, 2023– Matthew Davis contacted MJ’s former lawyer, Philip Buri, asking him “…to return $3,500 in sanctions in exchange for not bringing him back into court for purported discovery violations.”

Aug. 24, 2023– Matthew Davis had emailed a local journalist “numerous statements…concerning financial matters concerning the case and more specifically
MJ Management. In the email he(Mr. Davis) stated: ‘Those numbers [referenced in the email] are based on MJ Management’s own accounting records that I will be happy to share.’”

On the same date, Aug. 30 2023, Mr. Possinger (MJ lawyer) filed a Motion to:
1) Disqualify Class Counsel (Davis & Andersson)
2) Impose Sanctions on Plaintiffs and Class Counsel
3) For a Protective Order

Mr. Possinger cited the following reasons for his Motion:
“This Motion is brought for deliberate violations of relevant Discovery Rules and Rules of Professional Conduct. Violations which included among others:

1. Wrongfully seeking and obtaining privileged communications and confidential information from the MJ Defendants while they were effectively unrepresented;
2. Providing them with legal advice and pressuring them to sign declarations prepared by Class Counsel (Davis & Andersson) under false pretenses;
3. Obtaining confidential records of MJ Management for which a protective order had been requested, and by circumventing and violating the Rules of Civil Procedure in order to accomplish this; taking advantage of unrepresented parties; and 
4. Misusing the wrongfully obtained privileged communications and confidential information beyond the scope of the Discovery Rules.

This 17-page Motion included information about Lead Plaintiff Scott Hillius texting Josh Williams beginning April, 2023. According to the document, Mr. Hillius told Josh that he and Mick, “…should tell their legal counsel to dismiss them” and that they “are now back on the hook for any liability that is found.”

June 12, 2023-Mr.Andersson and Mr.Davis met with Mick and Josh. The following quotes about their meeting are from the same 17-page Motion cited above:
“Class Counsel (Andersson & Davis) repeated many of the same messages that Hillius had been communicating to Williams by text during the previous two months…”

“Class Counsel (Andersson & Davis) stated that O’Bryan and Williams needed to sign declarations that Class Counsel would prepare. They also made it clear that if the MJ Defendants did not cooperate and dismiss the counterclaims, they would face liability of $15 million dollars which they (Andersson & Davis) would pursue against them personally. They (Andersson & Davis) also told them with Buri (former MJ lawyer) leaving the case, they (MJ) would likely not be able to find new counsel and would be facing an expensive trial.”

“With the MJ Defendants back in the case as of January 11, 2023, Class Counsel (Andersson & Davis) resurrected their earlier discovery requests targeting confidential electronic accounting and financial data of the company.”

“However, once it became clear that Buri (former MJ lawyer) was exiting the case, Class Counsel (Andersson & Davis) then proceeded to seek this information by directly subpoenaing MJ Management’s bookkeeper, Cynthia Polley.”

This was seen as bypassing the protections set up earlier by Mr. Possinger since Andersson and Davis’ request for records was done, “without providing the notices that would have allowed MJ Defendants to seek a Protective Order as contemplated by the Discovery Rules (CR 45(b)(2)…”
Note: The General and Supplemental Protective Orders now became relevant.

Takeaways:
1. Lead Plaintiff Hillius is not representing his class, just his lawyers, and the plaintiffs are now on opposing counsel’s radar.

2. The Court takes private, confidential, privileged information very seriously! Plaintiffs are accused of violating and misusing protected documents.

3. Legal battles are growing more intense, with 2 new lawyers filing motions to disqualify plaintiffs counsel.

Upcoming hearings for 2023:
Oct. 5 – Judge Freeman will hear arguments for determining confidential documents

Oct. 25 & 26 – Two half-day evidentiary hearings (witnesses and evidence can be presented) for MJ’s attorneys, Mr. Possinger and Mr. Meyers, to argue their motion for why plaintiffs’ lawyers, Mr. Davis and Mr. Andersson, should be disqualified from this case.