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Cuttr Holdings LLC v. Patinkin

February 7, 2008

CUTTR HOLDINGS LLC, CUTTR, INC., PLAINTIFFS,
v.
SETH S. PATINKIN, BELLA PROSPER LLC, HAO FANG LLC, DEFENDANTS.



The opinion of the court was delivered by: William J. Martini, U.S.D.J.

OPINION

HON. WILLIAM J. MARTINI

Plaintiffs and Third-Party Defendants move for an order striking Defendant Patinkin's pleadings and for attorney's fees and costs on the ground that Patinkin has submitted false documents to the Court. The Court finds that Patinkin indeed has submitted false documents to the Court and orders Patinkin to reimburse Plaintiffs and Third-Party Defendants for any resulting costs and attorney's fees. However, this Court finds that Patinkin's abuses are insufficiently severe to warrant striking his pleadings.

I. FACTS AND PROCEEDINGS

A. Facts Underlying the Litigation

This motion requires the Court to summarize only a few of the facts giving rise to the litigation.

This suit stems from the collapse of business entities and relationships created to manufacture and market a product called "CUTTR CHT." CUTTR CHT was invented by Seth Patinkin. (Countercl. ¶ 10.) During the relevant period of time, Patinkin and his business partners Mark Graham, Alexander Baytin, and Peter Getz incorporated CUTTR Inc. and CUTTR Holdings LLC. (Countercl. ¶¶ 10--26.) The parties transferred the CUTTR CHT patent to CUTTR Inc., which they made a wholly owned subsidiary of CUTTR Holdings LLC. (Countercl. ¶¶ 10--26.) The parties sought to subcontract the research and development of CUTTR CHT to both Russian and U.S. labs, but they wished (for reasons irrelevant to this motion) to distance themselves from these subcontractors. (Countercl. ¶¶ 28--29, 39.) Accordingly, Patinkin formed Bella Prosper LLC and Hao Fang LLC, companies that would act as intermediaries for the parties' payments to subcontractors. (Countercl. ¶¶ 28--29.) Against this backdrop, irreconcilable differences grew between Patinkin and the other parties, and Patinkin abandoned the venture.*fn1 (Countercl. ¶¶ 44--53.)

This falling out spawned the litigation before this Court. CUTTR Holdings, LLC and CUTTR Inc. sued Patinkin on a number of legal theories. Patinkin counterclaimed and also sued Graham, Baytin, and Getz as Third-Party Defendants.

B. The Instant Motion

The litigation thus far has been rancorous. Both sides have repeatedly accused each other of misconduct, and this Court has repeatedly been called upon to mediate.

In this latest round of pettifogging, Plaintiffs and Third-Party Defendants (collectively "CUTTR") move for an order striking Patinkin's pleadings and for attorney's fees and costs. (Mot. to Strike Pleadings.) CUTTR claims that Patinkin has engaged in fraud on the Court in three separate instances. (Mem. in Support of Mot.1--3.) Specifically, CUTTR claims that Patinkin made three false representations to the Court:

(1) in a previous motion to disqualify CUTTR's counsel, (2) in a response to Graham's motion for a temporary restraining order, and (3) in scheduling conferences regarding Patinkin's deposition. (Mem. in Support 1--2.)

II. DISCUSSION

A. Patinkin's Motion to ...


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