Kasten Berry Inc. v. Stewart

District Court, D. Kansas·Decided August 6, 2025·No. 2:24-cv-02270·Unknown

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF KANSAS

KASTEN BERRY INC.,

Plaintiff,

v. Case No. 24-2270-JAR-BGS

WALLACE STEWART,

Defendant.

MEMORANDUM & ORDER ON PLAINTIFF’S MOTION FOR SANCTIONS AND ORDER ON ATTORNEYS’ FEES

Now before the Court is Plaintiff’s motion seeking an Order entering sanctions against the pro se Defendant for his “repeated, willful, disobedience of this Court’s Orders, for refusal to provide discovery responses, and for failing to engage in the pretrial conference process in good faith as required by this Court’s Scheduling Order.” (Doc. 90, at 1.) Defendant did not file a response to this motion and the time to do so has expired. The Court could grant the motion as unopposed pursuant to D. Kan. Rule 7.1(c), which states that [a] party opposing a motion must file a response, and the moving party may file a reply within the time provided in D. Kan. Rule 6.1(d). If a response is not filed by the applicable deadline, the court will consider and decide the motion as an uncontested motion. Ordinarily, the court will grant the motion without further notice.

Instead, the Court will provide substantive guidance regarding its decision herein. This Order also sets the amount of attorneys’ fees awarded to Plaintiff in accordance with the Court’s prior Order granting attorneys’ fees. (Doc. 80.) This Order thus DENIES in part Plaintiff’s Motion for Sanctions (Doc. 90) and FINDS AS MOOT in part to the extent Plaintiff requests sanctions relating to discovery issues.1 I. FACTUAL BACKGROUND. A. General Background. Plaintiff supplies point of sale (“POS”) systems, mobile payments, payment processing, counter terminals, billing and invoicing, payroll, and related products and services to its customers.

(Doc. 72, at 2.) It earns revenue by “obtaining residual payments for each credit, debit, or other electronic transaction processed by a customer who uses a POS system provided” by it. (Id.) Defendant was hired by Plaintiff as a Sales Representative in May 2022, at which time the parties entered into an employment agreement. (Id.) Defendant’s “primary job” was to sign up new customers to use Plaintiff’s products and services and maintain/service those accounts. (Id.) The present lawsuit was initially in Johnson County, Kansas District Court and removed to federal District Court on June 21, 2025. (Doc. 1.) Plaintiff brings claims for breach of contract, breach of fiduciary duty, and violation of the faithless servant doctrine. Plaintiff alleges Defendant breached the parties’ Employment Agreement, which prohibits Defendant from: • possessing, disclosing, or using [Plaintiff’s] confidential information.

• Soliciting, calling upon, serving, accepting business from, catering to, influencing, diverting [Plaintiff’s] customers, or receiving compensation as a result of any such activity.

(Doc. 72, at 2 (citing Doc. 11-1 ¶¶ 2-5).) Plaintiff alleges that, “during and after his employment with Plaintiff, Defendant solicited and diverted its customers from Plaintiff to a competitor … in violation of Defendant’s obligations to Plaintiff.” (Doc. 26, at 1.) Plaintiff contends that Defendant “acknowledged that thirteen customers he serviced while employed by [Plaintiff] are now customers

1 As discussed more thoroughly infra, the Court denies Plaintiff’s request for sanctions against Defendant as a result of any alleged failure to participate in the Pretrial Conference and Pretrial Order process. of Pay Compass LLC,” which according to Plaintiff, is the “background for the discovery sought.” (Doc. 72, at 3.) Defendant acknowledges that he works for Plaintiff’s competitor, Pay Compass LLC. That stated, he generally denies Plaintiff’s allegations while raising certain affirmative defenses, including the failure to mitigate damages, Plaintiff’s breach of contract, unconscionability, and fair competition. (Doc. 26, at 1-2.)

B. Past Discovery Requests. Plaintiff served its first discovery requests to Defendant on November 8, 2024 (Doc. 31), with answers and objections from Defendant served on December 6, 2026. (Doc. 72-1.) The responses were rife with boilerplate objections and conditional responses. (See generally id.) Plaintiff’s counsel sent a golden rule letter regarding the deficient responses on December 13, 2024. (Doc. 72-2.) Counsel for the parties engaged in a telephone conference on December 23, 2024, at which time defense counsel agreed to supplement the discovery responses by January 2, 2025. Supplemental responses were forthcoming on January 3, 2025, but were not signed by counsel or verified by Defendant. (Doc. 72-3.) Defense counsel did, however, indicate that additional information would be forthcoming. Plaintiff’s counsel emailed defense counsel regarding the “persistent deficiencies” and “improper addition of new or expanded objections” in the discovery responses on January 16, 2025. (Doc. 72, at 4 (citing Doc. 72-4).) Defendant’s Second Supplemental Answers and Objections were

served on January 28, 2025, but were again not signed by counsel or verified by Defendant. (Doc. 72-5.) The Court scheduled a pre-discovery motion telephone conference on March 10, 2025. (Doc. 65.) Prior to that conference, Defendant served his Third Supplemental Answers and Objections to Plaintiff’s First Interrogatories and Second Supplemental Responses and Objections to Plaintiff’s First Requests for Production. (Doc. 72-6.) This resulted in the parties speaking by telephone regarding these discovery issues for approximately 30 minutes prior to the telephone conference with the Court. (Doc. 72, at 4.) During the pre-motion telephone conference with the Court, the undersigned Magistrate Judge instructed defense counsel to revise the Request for Production responses to make Defendant’s objections compliant with Fed. R. Civ. P. 34 and produce all responsive information (other than that designated “attorneys eyes only”) by March 21,

2025. Defense counsel was also instructed to have Defendant sign and verify his First and Second Supplemental Answers to Plaintiff’s First Interrogatories by that date. The parties were instructed to work on a joint amended protective order that included a narrowly tailored “attorneys eyes only” provision. Plaintiff was given a deadline of March 31, 2025, to file any resulting motion to compel. In violation of the Court’s instructions, Defendant failed to supplement his discovery responses. Defense counsel did, however, email a proposed amended protective order to Plaintiff’s counsel on March 20, 2025. Despite exchanging draft protective orders and sharing their thoughts on disputed language, the parties were unable to agree to language for an “attorneys’ eyes only” provision. Much of the dispute apparently related to Defendant’s request that the provision include language that would encompass “PayCompass customer names, communication, and contracts between PayCompass and it’s [sic] customers.” (See Doc. 72, at 5.) On Marh 21, 2025, defense counsel filed an unopposed motion to withdraw as attorney for Defendant Wallace Stewart. (Doc. 70.) That motion to withdraw was granted by the undersigned

Magistrate Judge on April 8, 2025 (Doc. 75), which left Defendant representing himself pro se. On March 31, 2025, Plaintiff timely a motion to compel, arguing Defendant’s Second Supplemental Responses to Requests for Production Nos. 4, 5, 6, 7, 8, 9, 11, 15, and 16 were deficient and that Defendant failed to verify his supplemental interrogatory responses. (Doc. 72, at 5-6.) Plaintiff also sought its reasonable costs and attorneys’ fees in bringing the motion.

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