Travelers Casualty v. Dunmore, et al

Filing 256

ORDER signed by Judge Lawrence K. Karlton on 8/27/12 ORDERING that defendant's 246 Motion for Reconsideration of the Magistrate Judge's ruling on plaintiff's motion for sanctions is DENIED. The defendant shall comply with the magistrate judge's ruling within 28 days. Defendant is sanctioned $8,573.43 for the costs incurred by plaintiff in defending against defendant's motion for reconsideration. Said sum shall be paid within 28 days. (Kastilahn, A)

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UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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TRAVELERS CASUALTY AND
SURETY COMPANY OF AMERICA,
a Connecticut corporation,

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NO. CIV. S-07-2493 LKK/DAD
Plaintiff,

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v.

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O R D E R
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SIDNEY B. DUNMORE, an
individual; SID DUNMORE
TRUST DATED FEBRUARY 28,
2003, a California trust;
SIDNEY B. DUNMORE, Trustee
for Sid Dunmore Trust Dated
February 28, 2003; DHI
DEVELOPMENT, a California
corporation,
Defendants.

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/

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This case concerns various disputes arising out of Plaintiff

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and Counter-Defendant Travelers Casualty and Surety Company of

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America’s (“Travelers”) guarantee of performance bonds for certain

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home

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(“Dunmore”).

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construction

projects

of

Defendant

Sidney

B.

Dunmore

Pending before the court is Defendant Dunmore’s Request for
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Reconsideration of the Magistrate Judge’s ruling on Plaintiff’s

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motion for sanctions.

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reasons provided below, the court denies Defendant’s request for

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reconsideration.

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See Def’s Req., ECF No. 246.

For the

I. PROCEDURAL BACKGROUND

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In this action, Plaintiff Travelers seeks to be indemnified

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against loss related to bonds issued to Defendant Dunmore Homes,

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and various related individuals, trusts, and businesses. Travelers

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seeks, among other things, collateral security and the requisite

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documents to obtain collateral security.

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A. Plaintiff’s Request for Production of Documents

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On January 15, 2010, Plaintiff served a Request for Production
of Documents on Defendant Dunmore, requesting the following:
1. Any and all federal tax returns, including any
and all schedules and addendums to said tax
returns, for you, individually, for the years 20032008.

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2. Any and all documents relating in any way to any
federal income tax refund, payment, check,
transmittal, wire transfer, remittance, or any
transfer of funds from the federal government to
you that arose out of an overpayment of federal
taxes for any of the years 2003-2008.
3.
Any
and
all
documents
showing
any
communications relating in any way to any federal
income tax refund, payment, check, transmittal,
wire transfer, remittance, or any transfer of funds
from the federal government to you that arose out
of your overpayment of federal taxes for any of the
years 2003-2008.
Colucci Decl., ECF No. 171, Ex. 1 (Request for Production).

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Defendant Dunmore’s response to the request for production

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stated, among other arguments, that the documents requested were
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privileged, irrelevant, and redundant of other requests.

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See id.

at Ex. 2 (Def’s Resp.).

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On September 24, 2010, Plaintiff filed a motion to compel

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production of “all documents responsive to Travelers’ Requests for

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Production of Documents,” and a hearing was held before Magistrate

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Judge Drozd on October 22, 2010.

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Minutes, ECF No. 190.

See Pl’s Mot., ECF No. 169;

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On October 25, 2010, the magistrate judge granted Plaintiff’s

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motion to compel production of all of the documents Plaintiff

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sought

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(“[P]laintiff’s motion to compel is granted in its entirety.”).

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Defendant filed a motion to reconsider the magistrate judge’s order

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on November 4, 2010.

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By

in

the

order

motion

dated

to

compel.

September

30,

See

Order,

2011,

this

ECF

court

No.

191

denied

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Defendant’s motion to reconsider, finding “no clear error in

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Magistrate Judge Drozd’s conclusion that defendant had waived the

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California law privilege against disclosing tax returns.”

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ECF No. 235, at 3-4.

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Magistrate Judge Drozd’s conclusion that” a provision in the

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indemnity agreement between the parties, which required Defendant

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to turn over “records, documents . . . financial information” and

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other documents listed, constituted “circumstances that indicate

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an intentional waiver of the privilege.”

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B. Plaintiff’s Motion for Sanctions

Order,

The court further found “no clear error in

Id.

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On February 6, 2012, Plaintiff Travelers filed a motion for

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sanctions to compel Defendant to “produce all documents responsive
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to Travelers’ Requests for Production of Documents.”

Pl’s Mot.,

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ECF

amount

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$7,091.00.

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. . produced federal tax returns for 2003 through 2008; . . .

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Dunmore failed to produce any of the documents related to those tax

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returns.

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show whether the IRS refunded any monies to Dunmore.”

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ECF No. 239, 1.

No.

238.

Plaintiff

Id. at 2.

sought

sanctions

in

the

of

Plaintiff argued that, although “Dunmore .

In particular, Dunmore failed to produce documents that
Pl’s Memo.,

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At the February 24, 2012 hearing before the magistrate judge

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on Plaintiff’s motion for sanctions, after the parties discussed

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the scope of Plaintiff’s Request for Production of Documents,

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Magistrate Judge Drozd stated, “I think maybe we’ve dealt with it

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in

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interpreting the request as requesting the production of documents

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that reflect the amount of any refunds in fact received, bank

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records, or communications with accountants or tax preparers.”

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Tr., ECF No. 248, at 19.

more

detail

this

time

than

the

last

time

but

I’m

now

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On February 27, 2012, the magistrate judge issued an order

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denying Plaintiff’s motion for sanctions “[f]or the reasons stated

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on the record.”

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ordered that “within thirty days, defendant Sidney Dunmore shall

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produce to plaintiff any bank records or communications with

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defendant Dunmore’s accountant or tax preparer, in his possession

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or control, reflecting defendant Dunmore’s receipt of a federal tax

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refund for the tax years 2003 through 2008, and the amounts

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thereof.”

Order, ECF No. 245.

Id. at 1.
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The magistrate judge further

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C. Defendant’s Request for Reconsideration

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On March 9, 2012, Defendant timely filed a request for

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reconsideration of the magistrate judge’s ruling on Plaintiff’s

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motion for sanctions, which is presently before the court.

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Req., ECF No. 246.

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arguments: (1) the magistrate judge “direct[ed] a production of

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documents not set forth in the initial Request for Production of

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Documents” and, thus, “unilaterally modified the request for

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production of documents to require production of bank records and

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accounting records, where no bank or accounting records were

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requested”; (2) “[b]y unilaterally expanding the content of the

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initial request for production to include bank account statements

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and accountant communications, the Court has deprived Dunmore of

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his right to object as provided in Federal Rule of Civil Procedure

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Rule 34"; and (3) contrary to the requirements of Federal Rule of

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Civil Procedure 26, the “tax refund check” sought by Plaintiff “is

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not a document that is relevant to either Plaintiff Traveler’s

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claims or Dunmore’s defenses,” is only sought “to verify finances

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for satisfaction of a judgment which Plaintiff Travelers has not

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obtained,” and, thus, “is actually a premature request under FRCP

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69

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execution, by a judgment creditor, which Travelers is not as of

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this date.”

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which

provides

Def’s

Defendant makes, inter alia, the following

for

discovery

in

aid

of

the

judgment

or

Id. at 4-6.

Plaintiff opposes Defendant’s request for reconsideration and

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argues,

inter

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“unilaterally

alia,
modify

that:

(1)

Travelers’
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the

magistrate

request

for

judge

did

not

production

of

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documents” because all of the documents ordered to be produced by

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the magistrate judge’s order were “encompassed by Travelers’

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January

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Defendant

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Travelers’ requests” and, in fact, “[t]he objection that Dunmore

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wants to assert was already asserted in response to Travelers’

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Request for Production and Travelers’ Motion to Compel”; (3) the

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effect of the magistrate judge’s order was, in fact, “to deny

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monetary sanctions and compel production of a portion of Travelers’

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previously requested documents”; and (4) even if the magistrate

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judge unilaterally modified Travelers’ request for production of

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documents to include new documents, that modification “would be

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well within the Court’s authority and discretion” because “a

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federal court has broad authority to manage the discovery process

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and to issue ‘just orders’ to resolve sanctions disputes” under

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Federal Rule of Civil Procedure 37(b)(2)(A).

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247, at 9-15.

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2010

Dunmore

request
“already

for

production

had

an

of

documents”;

opportunity

to

(2)

object

to

Pl’s Opp’n, ECF No.

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II. STANDARD FOR A MOTION TO RECONSIDER A MAGISTRATE JUDGE’S

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NONDISPOSITIVE RULING

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Federal Rule of Civil Procedure 72(a) provides that a district

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judge in must modify or set aside any part of a magistrate judge’s

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order that is “clearly erroneous or contrary to law.” Fed.R.Civ.P.

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72(a).

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The

United

States

District

Court,

Eastern

District

of

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California’s Local Rule 303(c) further provides that a party may

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seek reconsideration by a district judge of a magistrate judge’s
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ruling, and that “[t]he standard that the assigned Judge shall use

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in all such requests is the ‘clearly erroneous or contrary to law’

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standard.”

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(“A judge of the court may reconsider any pretrial matter . . .

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where it has been shown that the magistrate judge’s order is

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clearly erroneous or contrary to law.”).

Local Rule 303(f); see also 28 U.S.C. § 636(b)(1)(A)

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As to discovery matters, magistrate judges are given broad

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discretion and their decisions on such matters should not be

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overruled absent a showing of clear abuse of discretion.

Swenson

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v. Siskiyou County, No. 2:08-cv-01675, 2010 WL 2574099, at *1

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(E.D.Cal. June 24, 2010) (citing Jones v. Sweeney, 1:04-cv-06214,

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2008 WL 3892111, at *1 (E.D.Cal. Aug. 21, 2008)).

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III. ANALYSIS
The

court

finds

no

clear

error

or

inappropriate

legal

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determination in Magistrate Judge Drozd’s order denying Plaintiff’s

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motion for sanctions and further requiring that “within thirty

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days, defendant Sidney Dunmore shall produce to plaintiff any bank

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records or communications with defendant Dunmore’s accountant or

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tax preparer, in his possession or control, reflecting defendant

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Dunmore’s receipt of a federal tax refund for the tax years 2003

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through 2008, and the amounts thereof.”

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At the February 24, 2012 hearing, in which both parties had

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the opportunity to debate their interpretation of the scope of

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Plaintiff’s January 15, 2010 Request for Production of Documents,

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Magistrate Judge Drozd reasonably interpreted the Plaintiff’s

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Request for Production of Documents to include Defendants’ bank
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records or communications with his accountant or tax preparer,

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reflecting any receipt of a federal tax refund between 2003 and

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2008

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Defendant’s

judge

“unilaterally

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modified the request for production of documents.”

Defendant had

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an opportunity to object, and did in fact object, to Plaintiff’s

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request for documents pertaining to his 2003-2008 tax refunds

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following Plaintiff’s January 15, 2010 request, Plaintiff’s motion

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to compel, and Plaintiff’s motion for sanctions.

for

Defendant.
argument

As

such,

that

the

the

court

magistrate

cannot

agree

with

Thus, the

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magistrate judge did not abuse his discretion in ordering Defendant

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to produce the documents at issue.

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Furthermore, the court finds that the Defendant has multiplied

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unnecessary

proceedings

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Accordingly, Defendant is sanctioned $8,573.43 for the costs

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incurred by Plaintiff in defending against Defendant’s instant

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motion for reconsideration.

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by

bringing

the

instant

motion.

IV. CONCLUSION

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For the reasons provided above, Defendant’s Request for

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Reconsideration of the Magistrate Judge’s ruling on Plaintiff’s

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motion for sanctions is DENIED.

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defendant shall comply with the magistrate judge's ruling within

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twenty-eight (28) days.

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See Def’s Req., ECF No. 246.

The

Defendant is sanctioned $8,573.43 for the costs incurred by

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Plaintiff

in

defending

against

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reconsideration. Said sum shall be paid within twenty-eight (28)

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days.
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Defendant’s

motion

for

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IT IS SO ORDERED.

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DATED:

August 27, 2012.

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