Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_11-cv-01746/USCOURTS-azd-2_11-cv-01746-0/pdf.json

Nature of Suit Code: 423
Nature of Suit: Bankruptcy Withdrawal 28 USC 157
Cause of Action: 28:0157(c)(1) Findings, Concl. &amp; Proposed Judgment

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Seychelles Organics, Inc., 

Plaintiff, 

vs.

John R. Rose, 

Defendant. 

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No. CV-11-01746-PHX-FJM

ORDER

Before the court is defendant Rose and non-party AnuMed’s motion for protective

order (doc. 26), plaintiff’s response (doc. 27), and defendant’s reply (doc. 28).

In November 2006, Seychelles entered into an asset purchase agreement with the Rose

Entities, under which Seychelles paid over $7 million to acquire assets of the Rose Entities

(“Acquired Business”). As part of the asset purchase agreement, Rose executed a noncompete agreement, agreeing not to participate in any business similar to the Acquired

Business. After Rose violated the terms of the non-compete agreement, Seychelles filed a

complaint in Utah state court seeking injunctive relief. The Utah court issued a temporary

restraining order, followed by a preliminary injunction, ordering Rose to stop violating the

terms of the non-compete agreement. Nevertheless, Rose continued to violate the agreement.

One day before Rose was scheduled to appear to show cause as to why he should not be held

in contempt, Rose filed for Chapter 13 bankruptcy protection in the United States Bankruptcy

Case 2:11-cv-01746-FJM Document 30 Filed 03/21/13 Page 1 of 3
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Court for the District of Arizona. Seychelles then filed an adversary proceeding in Rose’s

bankruptcy case, and a trade dress infringement action in the United States District Court for

the District of Utah. The parties subsequently agreed to settle all claims, whereby Seychelles

agreed to dismiss the litigation and withdraw its proof of claim in exchange for Rose’s

agreement to the immediate entry of judgment against him in the amount of $1 million, and

the entry of a permanent injunction, prohibiting him from participating in any business in

competition with the Acquired Business. As part of the settlement agreement, Seychelles

agreed to forbear taking any action to collect upon the judgment so long as Rose timely

complied with his obligation to pay $180,000 over a 5-year period and “remain[ed] in

compliance with the terms of the injunction.” Motion, ex F ¶ 6. The bankruptcy court

approved the settlement agreement and issued proposed findings of fact and conclusions of

law. We subsequently adopted the bankruptcy court’s proposed findings and conclusions

and granted the parties’ stipulated motion for entry of final judgment and permanent

injunction (doc. 6), and this case was closed. When Rose later allegedly defaulted on his

payment obligations under the settlement agreement, and failed to comply with the terms of

the injunction, Seychelles sent notice of termination of its forbearance obligation and began

efforts to enforce the $1 million stipulated judgment. As part of those efforts, Seychelles

noticed the deposition of Rose and one of his affiliated entities, AnuMed International, LLC.

Now before us is Rose and AnuMed’s motion for protective order, seeking to quash

the notices of deposition and subpoenas, arguing that the $1 million judgment is not

enforceable, the underlying debt is not currently due, and therefore the subpoenas serve to

annoy, oppress, and burden Rose and AnuMed and should be quashed. See Fed. R. Civ. P.

26(c)(1). 

A final, stipulated judgment has been entered in this case (doc. 6). Rose cannot attack

the validity of that final judgment by way of a motion for protective order. Under Rule 69(a),

Fed. R. Civ. P., Seychelles is within its right to obtain discovery “from any person” in aid of

enforcing that judgment. It is unlikely that Rose can support a claim for relief from judgment

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under Rule 60(b), Fed. R. Civ. P. There are no allegations of mistake, surprise, newly

discovered evidence or fraud. Instead, Rose appears to raise challenges as to the

interpretation and enforceability of the settlement agreement. Any such claim must be

presented in a separate action.

IT IS ORDERED DENYING the motion for protective order (doc. 26).

DATED this 20th day of March, 2013.

Case 2:11-cv-01746-FJM Document 30 Filed 03/21/13 Page 3 of 3