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Seven Stars on the Hudson Corp. v. MDG Powerline Holdings, LLC (In re Seven Stars on the Hudson Corp.)

Seven Stars on the Hudson Corp. v. MDG Powerline Holdings, LLC (In re Seven Stars on the Hudson Corp.)

United States Bankruptcy Court for the Southern District of Florida, Fort Lauderdale Division

January 28, 2022, Decided

Chapter 11, Case No. 19-17544-SMG, Adv. No. 19-1230-SMG

Opinion

 [*187]  MEMORANDUM OPINION

When a plaintiff's case will rely upon an expert witness to prove damages, but the plaintiff fails to timely disclose any expert witness or expert report, the consequences can be devastating. Such is the case here. The plaintiff failed to timely make its expert disclosures required by Federal Rule of Civil Procedure 26(a)(2). Without these disclosures, the plaintiff may not present any expert testimony. And with no expert testimony - and no other competent evidence [**2]  of damages in the record - the defendants moved for summary judgment, arguing there is no genuine issue of material fact and they are entitled to judgment as a matter of law. For this and other reasons discussed in detail below, the Court agrees and will grant the defendants' motions for summary judgment.

I. BACKGROUND.

Plaintiff Seven Stars on the Hudson Corp. ("Seven Stars") operates a trampoline park and "family fun center" inside a larger indoor entertainment complex called Xtreme Action Park. Xtreme Action Park - which is operated by XBK Management, LLC d/b/a Xtreme Action Park ("Xtreme") - also has a go-cart track, bowling alley, roller rink, escape rooms, and arcade games, among other attractions. MDG Powerline Holdings, LLC ("MDG") - which is allegedly owned and controlled by the same principals who own and control Xtreme - owns the facility and leases the space to Seven Stars, Xtreme, and a few other tenants (some of which may also be affiliated with MDG and Xtreme).1 Although MDG is its landlord,  [*188]  Seven Stars alleges that its co-tenant Xtreme effectively serves as the property manager.2

Jens Berding ("Mr. Berding") and Eddy Manzo-Berding ("Ms. Manzo-Berding") are the principals [**3]  and owners of Seven Stars. They claim to have initially capitalized Seven Stars with $1,963,110, consisting of a $553,532 equity investment from their retirement savings, and $1,409,578 in financing from Wells Fargo Bank, N.A. ("Wells Fargo").3 Seven Stars began operating its trampoline park in November 2016,4 as a franchisee of Rockin' Jump, LLC ("Rockin' Jump"). About a year later, the relationship between Seven Stars and its co-tenant Xtreme began to deteriorate.5 Seven Stars alleges that Xtreme and MDG essentially colluded to squeeze out Seven Stars, by taking actions designed to deprive it of revenue and customers, while interfering with Seven Stars' rights under its Lease. And there is certainly some evidence to support these claims, including an email from a representative of Xtreme who stated that Mr. Berding "doesn't want to work with us. He won't listen to reason so it appears we will just need to beat him into default."6

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637 B.R. 180 *; 2022 Bankr. LEXIS 234 **

In re: Seven Stars on the Hudson Corp., Debtor.Seven Stars on the Hudson Corp., Plaintiff, v. MDG Powerline Holdings, LLC and XBK Management, LLC, Defendants.

Subsequent History: Affirmed by, Appeal dismissed by, Motion denied by, As moot Seven Stars on the Hudson Corp. v. MDG Powerline Holdings, LLC, 2022 U.S. Dist. LEXIS 188537 (S.D. Fla., Oct. 16, 2022)

CORE TERMS

damages, deadline, discovery, Declaration, disclosures, interrogatories, initial disclosure, answers, expert witness, summary judgment motion, summary judgment, deposition, calculations, Lease, parties, sham, adversary proceedings, lost profits, interrogatory answer, material fact, claim for damages, lost revenue, computation, defendants', disclose, funding, tortious interference, expert report, second amended complaint, deposition testimony

Bankruptcy Law, Procedural Matters, Adversary Proceedings, Causes of Action, Discovery, Commencement of Adversary Proceedings, Judgments, Civil Procedure, Discovery, Methods of Discovery, Stipulations, Jurisdiction, Federal District Courts, Noncore Proceedings, Venue, Challenges to Venue, Transfers, Core Proceedings, Summary Judgment, Entitlement as Matter of Law, Appropriateness, Judgments, Entitlement as Matter of Law, Genuine Disputes, Legal Entitlement, Supporting Materials, Affidavits, Burdens of Proof, Burdens of Proof, Nonmovant Persuasion & Proof, Movant Persuasion & Proof, Antitrust & Trade Law, Trade Practices & Unfair Competition, State Regulation, Scope, Evidence, Preponderance of Evidence, Torts, Business Relationships, Intentional Interference, Elements, Consumer Protection, Deceptive & Unfair Trade Practices, State Regulation, Contracts, Remedies, Damages, Proof, Discovery & Disclosure, Disclosure, Mandatory Disclosures, Business & Corporate Law, Corporate Existence, Powers & Purpose, Powers, Acts Through Agents, Requests for Admissions, Effect of Admissions, Responses to Requests for Admissions, Allocation, Exemptions & Immunities, Noerr-Pennington Doctrine, Sham Exception, Opposing Materials, Accompanying Documentation, Depositions, Oral Depositions, Pretrial Matters, Conferences, Case Management, Scheduling Conferences, Pretrial Orders, Misconduct During Discovery