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Running Horse, LLC v. Rodenbough Trucking & Excavating, Inc.

United States District Court, D. North Dakota

October 17, 2016

Running Horse, LLC, Plaintiff,
v.
Rodenbough Trucking & Excavating, Inc.; Jessie Rodenbough; Matthew Rodenbough; Christine Boulter; and Unleashed Performance Labs, Inc., Defendants, Rodenbough Trucking & Excavating, Inc.; Jessie Rodenbough; Matthew Rodenbough; and Unleashed Performance Labs, Inc., Third-Party Plaintiffs,
v.
Tesha Fredericks; Joshua P. Jacobson; Paul Fredericks, Jr., and Payden Sorenson, Third-Party Defendants.

          ORDER DENYING MOTION TO DISQUALIFY COUNSEL

          Charles S. Miller, Jr., Magistrate Judge

         Before the court is Defendants Unleashed Performance Labs, Inc., Jessie Rodenbough, and Matthew Rodenbough's “Motion to Disqualify Counsel.” (Docket No. 54). Unless otherwise noted, the following relevant facts are either undisputed or have not been sufficiently controverted.

         I. BACKGROUND

         On February 24, 2016, Running Horse, LLC (“Running Horse”) initiated this action against Jessie Rodenbough, Matthew Rodenbough, and Rodenbough Trucking & Excavating, Inc. (“RTE”) seeking to recover in excess of $1, 400, 000. (Docket No. 1). This complaint generally alleged Jessie Rodenbough used her position as office manager/bookkeeper at Running Horse to make unauthorized transfers from Running Horse to RTE, a business owned by her and her husband, Matthew Rodenbough. With the court's leave, Running Horse filed its second amended complaint that asserts multiple causes of action against the Rodenboughs and RTE, including: fraud, fraud and deceit, breach of contract, conversion, civil theft, breach of fiduciary duty, conspiracy, violation of the Racketeering Influenced and Corrupt Organizations Act, violation of the Computer Fraud and Abuse Act, and violation of the Uniform Fraudulent Transfer Act. (Docket No. 45).

         In the second amended complaint, Running Horse also included Unleashed Performance Labs, Inc. (“UPL”) as a defendant. With respect to UPL, the second amended complaint alleges:

144. In early 2016, Matt Rodenbough, [Jessie] Rodenbough and RTE, Inc. transferred at least $100, 000 of the monies Defendants stole from Running Horse to accounts for Unleashed Performance with the actual intent to hinder, delay or defraud Running Horse.
145. Before the transfer was made, Defendants had been sued or threatened with suit by Running Horse.
146. Matt Rodenbough, [Jessie] Rodenbough and RTE, Inc. transferred the $100, 000 to Unleashed Performance without receiving a reasonably equivalent value in exchange for the transfer and Matt Rodenbough, [Jessie] Rodenbough, and RTE, Inc. became insolvent as a result of the transfer.
147. Matt Rodenbough, [Jessie] Rodenbough, RTE, Inc. and Unleashed Performance are liable to Running Horse pursuant to the Uniform Fraudulent Transfer Act, N.D.C.C. 13-02.1 et. seq.

(Docket No. 23-1). This complaint does not assert any other cause of action against UPL.

         Prior to commencement of this litigation, Jessie Rodenbough retained Jason Frazer, a partner at O'Donnell, Ferebee & Frazer, P.C., to serve as counsel in incorporating UPL during March 2015. Frazer and O'Donnell, Ferebee & Frazer, P.C. (collectively “Frazer”) also currently represent Running Horse. According to his affidavit, Frazer prepared the organizational paperwork for UPL, which he filed with the Nevada Secretary of State. (Docket No. 65-1). As a part of this process, Frazer and Jessie Rodenbough engaged in a series of email exchanges in which they discussed the necessary information for incorporation, including: the name of the entity; the type of entity; the address for the entity; who would serve as the registered agent; name of officers; and the name of directors or managers. (Docket No. 90). According to his affidavit, Frazer also advised UPL on filing a trademark and acquiring an employer identification number for tax purposes. (Docket No. 65-1). Frazer's representation ended on May 14, 2015. Neither Frazer nor O'Donnell, Ferebee & Frazer, P.C. have provided any further representation to UPL since that time. Id.

         II. DISCUSSION

         In the current motion, the Defendants ask the court to remove Frazer and his firm as counsel for Running Horse. The Defendants argue removal is necessary because Frazer's prior representation of UPL is substantially related to his current representation of Running Horse.

         A. ...


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