and his attorney who conspired together to steal his longstanding interest in the family business which was his life's work in this case it is the defendants who engaged in bad faith conduct the cuts if it damages and yet the trial court dismissed the entire case with prejudice in order to punish my client for alleged bad faith conduct that occurred four years before the litigation when he was merely trying to figure out what was going on and that ultimately did not cause any actual prejudice to the defendant's ability to defend the underlying claims we asked the court reversed the same thing to order because it is based upon a series of legal and factual errors that ultimately resulted in a manifest and justice let me again begin by addressing the issue of prelim gauge and conduct here it's undisputed that the trial court's findings thanks and order were based primarily upon a finding that my client engaged in bad faith conduct in how he obtained certain e mails and documents from the company's offices in two thousand and eleven point out our preset district court does not have the inherent authority to impose sanctions for pre litigation conduct rather this court held in the bill case that the remedy for people to gauge and conduct ordinarily must be found in the subject of law  the case here basically what we're asking is that the court find that all of the claims both the claims and the counterclaims that arose from preallocation conduct to be decided by a jury a trial based upon the substantive law of the case and not by the trial court in this case we've also alleged that they conduct by the defendants in our remedy if not sanctions but our claim for breach of fiduciary duty defendants have also led to claim for the alleged theft of documents they've accomplis but nevertheless it is a claim that could and should have been brought it's a counterclaim in this case and decided by a jury based upon ohio law which is the substantive law of the case what happened here is that the essentially engaged in a partial trial of only one side's claims that usurp the jury's role by making factual findings about the merits before any discovery based upon a limited review of the evidence and then essentially usurp the jury's fact finding function and wrongfully impose sanctions based upon a claim that should have been decided by the jury i am i am i correct in my assessment that your client doesn't challenge of the bad faith finding  i do i think that's true but actually your honor we do challenge the bad faith finding we have a part of our brief we have a specific section that deal directly with some of the findings that the trial court made regarding benteke kind of which they were based primarily on i guess i know that that's part of the part of the background or or the your argument but where's the challenge itself right we're challenging that the that the findings are not supported there are clearly erroneous mistakes based upon subject to sanctions i don't know where i got this mr funk but did the district court decide that there wasn't really a challenge to the bad faith it doesn't make sense to me but that's what i had i think the a pelleas raise that in their book they argue the discrepancies ever alleged related to things that were not material to ultimately the merits of the case and they were based on erroneous mistakes about the actual evidence but more importantly all of those credibility findings arose in the context of evaluating the evidence relating to preen litigation conduct and that was really the primary basis for the thing i mean that's where you started your argument but that's the gist that's groundless we don't have any support for doing that but court to have done what he did that's right your honor the inherent authority of the court really relates to the supervision of the judicial proceedings and that's what spring court held in chambers what the district court did in this case was it essentially got involved in deciding the underlying merits of the case the factual whether how we obtained documents right prior to litigation when the documents related to would pertain to the litigation so why haven't you demanded them by continually referring to them as pre litigation things i mean these these things were relevant and pertinent to them to all these disputes between the brothers because  occurred three years before the litigation began and the inherent authority really relates to the supervision of the judicial proceeding not the conduct that ultimately can give rise to a potential cause of action which one of the things judge plays point i suppose like mine that the court was a persuaded that they were that it was now unfair because your client had access to other sites litigation strategy in a duplicitous way sneaking in and getting into a computer so there we have it start talking about that way yes your honor and then actually i think it's to the what's mostly agree just about this ruling because in this case there's actually no evidence of any actual prejudice to the defendant ability to defend the underlying merits of the claims this is a claim that really related to whether or not my client had agreed to sell his interest in the company that's what was material to the case there is no evidence that he actually access any documents or viewed any e mails that were either privileged the trial court found that most of the documents were not privileged and more probably he never found that there was any never found any document was prejudicial so what you have here is a new situation where there is no actual prejudice if there had been a document that he saw that was prejudicial the trial court could have issued a perplexing one are saying you cannot use that document a trial or you cannot use in the information from that document we don't have that so what the chalkboard then does is use the absence of evidence as if if the evidence would support it and this four factor tests that was utilized was satisfied with judge i would respectfully disagree because in this situation we don't actually have any evidence of actual prejudice so what would the judge did was he speculated that there may be some other document out there that could have been prejudicial the problem that argument is there is no destruction of evidence in this case all the documents are in the possession of the defendants if there was some document out there that was prejudicial that somehow harmed their ability to defend whether or not my client sold his interest in the company they could have produced that document for in camera view and had to trial court actually conduct an analysis and whether or not that evidence would have caused actual prejudice to their ability to defend the underlying merits of the claims this case the trial court in gauging any analysis of the underlying merits of the claims he just said well there may be some other dykeman out there that have reviewed that prejudicial and we don't know what it is so what he's done is he's taken the absence of evidence as the basis for imposing the most extreme remedy of dismissal that's flipping the entire analysis on its head if there had been some prejudicial document the remedy would have been to preclude the use of that document but there wasn't any none of the documents were privileged the two documents that were referenced in the decision in the case map document and the ex parte mediation statement neither one of those documents were defended presented by the defendant for world leaders about the findings of the court and post in this sanction in that the court made an express finding that your client has stolen the information advantage there's no evidence that he in fact got an advantage that was his purpose and him to go and obtain an advantage by stealing things but ultimately the purpose of sanctions is to remedy the prejudice that's caused by the alleged misconduct this court has always analyzed it in the sense of trying to tie the remedy to remedying the prejudice here if you have a do actual prejudice the remedy of should not be the most extreme remedy of dismissal which is something that  be done in extraordinary circumstances that's what we think this this decision really crosses the line a court should not dismiss a case unless you can show with a clear showing that the defendants are unable to defend the underlying merits of the case because of some destruction of evidence or some other misconduct in this case we don't have that we don't have any evidence that they were prevented were are unable to defend the underlying merits of the case and that's why this case should be decided on the merits and not based upon a farkle partial finding of certain limited conduct money to what are the big what what did the merits issue what's the question presented there's a struggle for owner continued ownership of the company who the documents were backed lead rather to it well actually was supposed to go to an independent trust t d c trust right but actually the trust agreement itself was allegedly created in july to two thousand and eight  and he was also representing each of the individual brothers and pass this company to these sons is that how this worked and then and then made sure there was some states a certain number of shares a percentage of shares that would held in trust so that there would to to adjust this kind of problem right but the underlying merits ultimately what is going on in the enron case is whether or not he had sold his interest in the company and whether or not the defendants engaged in bad  conduct by basically documenting a sale that didn't actually exist is supposed to be a secret sale i mean it is only secret in the sense that it that it should have been fully disclosed by the bard negotiating parties the other brother right with it and the brother never and hid this is testimony the record that he never signed the agreement and he never agreed on a purchase price isn't precisely what's pre that's right and i guess my main point on this is that obviously the could the question whether the district court ultimately abused its discretion we think that this case clearly crosses the line because this is a very unusual setting agree that abuse of discretion is the standard even though it seems like your argument is more it will actually if may please a court thomas dillon on behalf of applebee's i want to address a couple issues judge cook that you raised yes this was there are a series of businesses that were passed on from the father this lawsuit only don't with two of those companies only two of them and the interesting part about that is he did not get the bread did not name c trust as a party so he can't recover those shares of stock from through this lawsuit we don't have this like it's a revelation that should resonate and i'm not getting into well if you're if you're trying to undo a sale you oughta name as a party to the lawsuit the buyer of the shares of stock and he didn't because the buyer he didn't name the buyer and he didn't because this was a trust that brad created brad was the trustee and he did it for tax purposes it's a defective grand for trust is how he did it the other thing is is there a dispute about whether or not he sold dell hold which is the other company  which won both sure it was the this hearing took place because brad requested it and i'll note that brand argues that judge you hari erred by even having an evidentiary hearing when in fact brad we found out brad took the documents we found out about the documents in february  judge stayed everything and allowed us to do discovery and we took his deposition and he asserted his fifth amendment rights so we didn't know where or when he had obtained those documents he then moves for the appointment of a special master for some reason to look at these documents and only then in august does the file with judge who are refers to as the combo motion which was  a motion to supplement the record with his affidavit and that proper provided at least brad's version of what happened he asked for an extension of time he asked for permission to review the he first disclosed his story to the judge i took these documents before i filed the lawsuit so we think it's disingenuous that you ask judge to hurry for a hearing and then claim that he committed error by actually granting that combo motion in its entirety allowing the affidavit in the evidence allowing the hearing to go forward furthermore i'd like to spend just a little bit of time focusing on some of the underlying facts that we weren't able to fully flesh out in our brief given the page limitation and that goes to the statement that we keep hearing the record is clear that brad's bad acts occurred prior to his filing the lawsuit right that's the underlying premise we keep hearing about well there were two exhibits at the hearing on sanctions exhibits zero in p and those are also e mails from cleaves in the inbox brad was not asunder he wasn't a recipient he wasn't copied on it nobody affiliated with him was copied on that email brad when he submits as affidavit saying i'm going to tell the truth i'm going to tell you what happened he doesn't mention those e mails at that sanctions hearing we ask about that where'd you get them how did you get them when did you get them his answer i don't know i can't recall i can't tell you he provided absolutely no evidence so at least as those documents when were they taken this is i don't know the argument you we heard this morning and you heard it too was that the judge was too involved with pre litigation conduct and now you're telling us this you're speaking about pretty litigation conduct and how it was brought to the table by this party correct correct i would also like to explain there were a number of e mails flying around at that sanctions hearing but they can be grouped into two categories one set of e mails they have a print footer on that on the bottom and that says when the e mail of cleves was printed and those with a print footer were marked as drawing exhibits three and five and brad story with regard to those e mails were he went to cleves computer he jiggled the mouse he did not enter in to a password at all it automatically opened up to the inbox please inbox he did a search and every single document that he every single e mail he looked at he printed in its entirety and produced in its entirety he claims he did not open up a single attachment and he did not open up any other programs or look at any other information on please computer just the inbox we asked there's a perp some problems with that as affidavit to begin with if you look at joint exhibits three and five they're missing pages so the question to brad was well if you printed everything why are there missing pages he can explain also in that exhibit read this in your life somewhere right i don't think we went through the that's why you have the expert who said now you have to have a password right correct the password  point is that we have some e mails that came from please inbox that when brad hit the print button guess what happened it put a print footer on it right i get it and so your point is he didn't telling the truth about what he did we know that object of lee in addition we've got this whole other set of e mails funks argument is so what the court was off the reservation in dismissing this case because he's a he's lied to the court i don't think judge you hari had every right to make sure that he could hold a fair proceeding and that's what he was doing and brad delp said give me a hearing because i'm going to tell you the truth he said that i'm going to tell you the truth and he didn't so so the club at your argument is that justified this exchange sanction that he that that the country mation and there's another one that i find interesting and you may find it interesting and hasn't to do with that print footer there's all these documents join exhibits two and four that brad claims cleaves printed out and he left in a conference room just just to follow up on what cook is saying i guess your opposing counsel is ironing that the procedure followed by the court was legally inappropriate and if you wanted to sing you have to assert your argument here if you wanted to address some more of that that might be helpful certainly well the reality is we had a hearing and we were told we were going to learn where these documents came from that was the purpose of the hearing the request for the hearing at the end of the three days of testimony what he said i'm going to tell you why would the court why is anybody interested in why he's going to tell the truth about what about where he obtained it where he obtained them but they are the reason we're actually in court now is he is and whether or not those were all the documents he had a search and what else he did and at the end of the hearing judge you hurry and everybody else sitting in that courtroom couldn't figure out what brad took how many times he went broke into the building how many times he went broke into the computer system what information he actually had because you couldn't believe anything he put in his affidavit or testimony and do you have any additional legal authority supporting what the just the other you just want to rely on what you have in your brief i have no new case law we cited the microsoft case which is from the ninth circuit that we think is very helpful in the eagles hospital case which was very helpful i will say that the discussion of this pretty lit term that comes from chambers versus nasco that actually comes from justice kennedy's dissent it's not even the the opinion and he points out yet you have to focus on the party's primary conduct that is the subject of the litigation in chambers it was a breach of contract here it was did brad sell his interest in these companies there were no claims against brad there were no counterclaims there's nothing against brad there was no underlying conduct that the court could look at with regard to the sale of those companies say brad i'm going to punish you for what you did or didn't do with regard to the sales so this this pretty litigation notion is just not recognized but i mean this is distinguishable least as i'm understanding it you know as much as brad wanted to bury soul and explain to the court his his stance or his position about the sale about the sale and that's how we got into this and then the court went to by understanding the argument then the court went to you know what you're a liar and a thief and  as he said a pox pox on all your houses yeah it really started with a deposition and our request to ask brad where do you get these documents that don't belong to you communications for me to my client with all types of information in it and that's when he took the fifth and then in his combo motion he undid his assertion of the fifth and said i'd like to give you this after affidavit respect and so it was his testimony i well talk a little bit in issue raged that there was no prejudice i think i disagree completely with that i mean the judge talked about that extensively in his opinion the information that brad had obtained in the also had obtained attorney client communications there was no judge there are simply said not every single document oh it was attorney client communications but he found that there were a turning point communications this address the primary case or the later motion or the things that were denied the primary case yes when talk about the fees being denied or not well we asked that as part of sanctions in our regional sanctions motion when brad had asserted the fifth amendment and all we had were negative inference was we asked that be considered and the judge denied that as was his right  brad testified to what he thought about these documents that he obtained and he said both in his affidavit and on the witness stand he said the only reason he stopped looking at the e mails was because he had seen enough of these e mails were so meaningful to him and troubling to him and the documents so troubling to him he was disgusted he said he wanted to vomit he went in there and he admitted to why were you looking at these e mails clues in the inbox he wanted to find evidence of this conspiracy that he had a vision in his head and at the end he found it at least in his mind he had found it and our exhibit a at the hearing was a letter was the first letter that started this whole thing and it was a letter from brad's first attorney out in arizona it really talked about you're interfering with my client relationships and you're not giving me all the investment revenue if you compare that to what the complaint looks like it really transformed in the complaint now is really this whole conspiracy theory so to wrap to my time is up to wrap up we've asked that the judge haris defend the underlying merits of the claims and naturally i think the key thing here he talked about the judge discussing prejudice but the again the judge did not find he found in most of the documents were not privileged he then never found any of those documents including exhibit piano have granted the most extreme remedy dismissal the court can look at one of the back to key factors is prejudice now if you want to say that because of the conduct was so egregious that standing alone would justify dismissal i would argue that that is not the case in this particular case because the the alleged testimony that he thought was incomplete related to how he got the documents but there there is the thing that i'm focused upon is this dratted litigation strategy i mean he took it looked to me like judge sue harvey took a great deal of comfort in saying that it's prejudicial again and i think that that your argument is it had to be played out why would strikes me maybe that he had a grounds there to say litigation strategy now it's three years earlier isn't it right that trying to litigation strategy strikes me as pretty peyton really a prejudicial feature but again i think that if you want to say you can assume it's prejudicial that's one thing but  i don't think that there was evidence by which to logically made that assumption because in this particular case made it illogically well i mean i think that you have to look at the evidence and the judge district judge had all the at issue documents and looked at them and didn't find any of them to be prejudicial so what they did was they took to the absence of evidence and made the next leap to say that therefore because we threaded you document i think there will approach this case well i think there was a reference to a case map document that was actually not attached so there really was any evidence that it was seen but even if it was seen the defendant right the defendants had would have had that doctrine in their possession they could have presented that to the district court for in came  view but they didn't present it and they bore the burden of proof on this issue now we're guarding the request of the editor hearing what have you have to look at it in the context in the context was that there was a fifth amendment privilege that was being withdrawn the evidence you're hearing with in many respects trying to negate the negative inference is from that but ultimately the point is that the evidence that was presented all showed that the documents retained three thousand lives ok thank you your honor my main point though is that we did not waive any arguments what we argued in our briefs was that all of the documents related to two thousand and eleven before litigation occurred and there was no misconduct during the litigation no violations in a court order and that was really the purpose of explaining that in the hearing and we ask you to court to reverse that we do believe this is crosses the line and that the court should direct the district court to decide the case on the merits by the jury not