Kopperl v. Bain et al

Filing 65

RULING ON DISCOVERY DISPUTES: counsel shall forward a status report, either jointly or individually, to this Magistrate Judge's Chambers with respect to their progress by 1/31/2012. Signed by Judge Joan G. Margolis on 1/17/2012. (Rodko, B.)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF CONNECTICUT
-------------------------------------------------------X
:
ANDREW KOPPERL
:
:
:
V.
:
:
KENT S. BAIN ET AL.
:
:
-------------------------------------------------------X

3:09 CV 1754 (CSH)

DATE: JANUARY 17, 2012

RULING ON PENDING DISCOVERY DISPUTES
On October 29, 2009, plaintiff Andrew Kopperl commenced this lawsuit against
defendants Kent S. Bain, Automotive Restorations, Inc. [“defendant ARI”], and Vintage
Racing Services, Inc. [“defendant VRS”], with respect to plaintiff’s financial involvement with,
and employment with, defendants ARI and VRS, commencing in March 2006, from which
plaintiff had a parting in October 2009 (Dkt. #1); plaintiff filed his Amended Complaint on
November 13, 2009 (Dkt. #7), followed by a Third Amended Complaint, filed on July 16,
2010 (Dkt. #29), which added defendants John Rolls and Lawrence A. Neviaser.1 The Third
Amended Complaint alleges the following nineteen counts: Injunctive Relief (First Count);
Declaratory Relief (Second Count); Fraudulent Misrepresentation (Third Count); Negligent
Misrepresentation (Fourth Count); violation of the Connecticut Uniform Securities Act (Fifth
Count); Breach of Contract regarding Stock (Sixth Count); Breach of Contract regarding
Amounts Due (Seventh Count); violation of CONN . GEN . STAT . § 31-72, against defendants ARI
and VRS only (Eighth Count); violation of CONN . GEN . STAT . § 31-72, against defendant Bain
only (Ninth Count); Breach of Fiduciary Duty (Tenth Count); Breach of Contract Implied in
Fact (Eleventh Count); Promissory Estoppel (Twelfth Count); Conversion as to Personalty

1

See also Dkts. ##22, 28 (regarding Second Amended Complaint).

(Thirteenth Count); Conversion of Ownership Interests, against defendants Bain, Rolls and
Neviaser only (Fourteenth Count); Claim Pursuant to CONN . GEN . STAT . § 52-564, against
defendants Bain, Rolls and Neviaser only (Fifteenth Count); Tortious Interference with
Contractual Relations, against defendants Rolls and Neviaser only (Sixteenth Count); Tortious
Interference with Business Expectancy, against defendants Rolls and Neviaser only
(Seventeenth Count); Civil Conspiracy, against defendants Rolls and Neviaser only
(Eighteenth Count); and Unjust Enrichment, against defendants Bain, ARI and VRS only
(Nineteenth Count).2
On December 23, 2009, defendants Bain, ARI and VRS filed their Answer, Affirmative
Defenses, and Counterclaims (Dkt. #14), followed by Amended Counterclaims, filed January
8, 2010 (Dkt. #18). Defendants Bain, ARI and VRS asserted nine counterclaims against
plaintiff: Breach of Duty to Negotiate in Good Faith (Count One); Declaratory Relief (Count
Two); Fraudulent Misrepresentation (Count Three); Negligent Misrepresentation (Count
Four); Breach of Fiduciary Duty (Count Five); Breach of Loyalty (Count Six); Civil Theft
(Count Seven); Conversion (Count Eight); and Computer Crime in violation of CONN . GEN .
STAT . § 53a-251 (Count Nine). On January 22, 2010, plaintiff filed his Motion to Dismiss
Defendants’ Amended Counterclaims (Dkt. #19), with respect to Counts One, Three, Four,
Five, Six, Seven, Eight and Nine. On August 30, 2010, Senior U.S. District Judge Charles S.
Haight, Jr. filed his lengthy ruling (Dkt. #35), in which he dismissed Counts One and Nine,
2010 WL 3490980, at *5-7, 9-10, and in which he dismissed, without prejudice to replead,

2

Defendants’ Motion to Dismiss the Third though Nineteenth Counts is presently pending
before the Court. (Dkts. ##36-37, 47, 49).

2

Counts Three, Four, Five, Six, Seven and Eight. Id. at *7-8.3
On December 16, 2011, Judge Haight referred this file to this Magistrate Judge to
supervise discovery and resolve discovery disputes, except for two pending discovery
motions. (Dkt. #62).4 In light of all counsel’s preference that discovery matters be handled
expeditiously, and without resorting to formal briefing, on January 3, 2012, plaintiff’s counsel
forwarded a three-page memorandum outlining seven areas of dispute between the parties,5
as to which defendants responded three days later.6

A lengthy telephonic discovery

conference was held before this Magistrate Judge to discuss the seven items addressed in
the two memoranda. (See Dkts. ##63-64).
Plaintiff contends that despite the fact that defendants have produced more than
8,000 pages of documents, they have not produced “many key documents[,]” but rather
duplicative materials or ones of “limited utility in this case[,]” many of which are “readily

3

Defendants’ Motion for Reconsideration, with respect to Counts One and Nine, is also
pending. (Dkts. ##38-39, 45).
4

Those two motions are Motions for Protective Orders filed by plaintiff. (Dkts. ##55-56,
57, 58, 59-60, 61).
5

Eight exhibits were attached: copy of plaintiff’s Third Amended Complaint (Exh. A); copy
of plaintiff’s Notice of Deposition, dated February 4, 2010, on defendant Bain, with attachments
(Exh. B); copy of plaintiff’s First Set of Requests for Production, dated July 18, 2011, on defendant
Neviaser and on defendant Rolls, with attachments (Exh. C); copy of Defendant Neviaser’s
Responses and Objections to Plaintiff’s First Set of Requests for Production, and of Defendant Rolls’
Responses and Objections to Plaintiff’s First Set of Requests for Production, both dated August 17,
2011 (Exh. D); excerpts from depositions of defendants Bain, Rolls, and Neviaser, taken on June 7,
June 21, and June 28, 2011, respectively (Exh. E); additional excerpts from defendant Neviaser’s
deposition (Exh. F); redacted copy of e-mail between defendants, dated September 18, 2009 (Exh.
G); and copy of plaintiff’s Second Request for Production of Documents, dated March 29, 2011,
with attachments (Exh. H).
6

Attached as Exh. A are excerpts from plaintiff’s deposition, taken on July 2, 2011;
attached as Exh. B is a Chronology of Defendants’ Production of Documents.
If an objection is filed to this ruling, then both letters and exhibits will be submitted to the
Clerk’s Office for filing on CM/ECF.

3

available” from defendants ARI and VRS’ computer networks. (1/3/12 Memo at 1-2 & n.1,
Exhs. A-D). In contrast, defendants argue that plaintiff’s demands are untimely, occurring
“almost two years after the parties exchanged documents[,]”7 and the electronic searches
will be “costly and duplicative” in that defendants already have “manually gathered and
produced no fewer than 8,157 pages of documents” not including accounting records.
(1/6/12 Memo at 1 & Exh. B).
With regard to the company e-mails of defendant Neviaser, which are “too
voluminous and impracticable to search” manually, counsel had conferred in early November
2011, during which conference defense counsel agreed to an electronic search of the
company e-mails of defendants Neviaser and Bain (defendant Rolls does not have a company
e-mail account), for a discrete number of search terms, the expense of creating the database
to be borne equally by both sides; according to defendants, less than one week later, in midNovember 2011, plaintiff demanded that the electronic term search include not just company
e-mail but also the company document server, desktop drives, and storage devices, as well
as the personal computers of all defendants, with supplemental search terms. (1/6/12 Memo
at 1-2).
1. DEFENDANTS’ ALLEGED FAILURE TO CONDUCT AN ADEQUATE SEARCH OF
THEIR PERSONAL COMPUTERS
At the time of their depositions in June 2011, defendants Bain, Rolls and Neviaser
testified that they did a manual search of their personal computers for responsive
documents, finding a limited number of documents.

(1/3/12 Letter at 2 & Exh. E).

Defendants represent that subsequent to these depositions, the personal computers were

7

Under the last Scheduling Order (Dkt. #54), all discovery was to have been completed by
September 1, 2011.

4

searched again, in late June and mid-July 2011, and supplemental production was made.
Based upon defendants’ representations, no further searches are required of these three
personal computers.
2-3. DEFENDANTS’ ALLEGED FAILURE TO SEARCH ALL OF DEFENDANT ARI’S
COMPUTER SERVERS, AND DEFENDANTS’ ALLEGED USE OF INCOMPLETE SEARCH
TERMS
With respect to defendant ARI’s computer servers, plaintiff requests that a search be
done of the ARI File Services (the M:Drive or its successor), the Auto-Restore.com Domain
Server (the Microsoft Exchange Server), as well as defendants Bain’s and Neviaser’s office
computers (C:Drive and associated backup/external drives). (1/3/12 Letter at 2). Plaintiff
also seeks eight additional search terms: Andogenda, partner, definitive agreement, LOI,
letter of intent, officer, director, and CFO. (Id.).
As recently as two months ago, after the expiration of the discovery deadline,8 the
parties were striving toward reaching an agreement regarding electronic discovery, when
plaintiff’s additional “demands” allegedly derailed the agreement from defendants’
perspective. To the extent that plaintiff is placing additional burdens on defendants with
respect to electronic discovery, then plaintiff should bear the financial burden of his
incremental demands.
Therefore, defendants’ computer consultant shall calculate what the expenses would
have been in creating the database to which defendants had agreed in early November 2011,
and defendants shall pay 50% of that amount. Plaintiff shall pay 50% of that amount, and
100% of all incremental expenses in searching the additional company drives and additional
terms he requests. Counsel shall confer with each other in determining a reasonable time

8

See note 7 supra.

5

period in which this database can be created, and sufficient time for defendants to review
any documents captured by the search.9 Defense counsel is quite correct that it is most
unfortunate that these issues were raised so late in the discovery process, but given the
distrust on both sides that obviously permeates this litigation, it is prudent to determine
whether all relevant documents have been discovered.
4. DEFENDANTS’ FAILURE TO PRODUCE BANK RECORDS
All counsel agreed with this Magistrate Judge’s suggestion that defendants produce
the monthly statements for the Bank of America, Sikorsky Federal Credit Union, and Morgan
Guaranty accounts for the months of December 2006, December 2007, December 2008,
December 2009, December 2010, and December 2011.
5. DEFENDANTS’ ALLEGED FAILURE TO IDENTIFY ANY DOCUMENTS REGARDING
DEFENDANT BAIN’S OFFERING STOCK TO MESSRS. CRONIN AND RECHTIENE
All counsel agreed that defense counsel would send an additional letter confirming
again that defendant Bain and Messrs. Cronin and Rechtiene have no additional documents
regarding defendant Bain’s offer of 5% of ARI stock to Mr. Cronin and his offer of 20% stock
to Mr. Rechtiene.
6. DEFENDANTS’ ALLEGEDLY IMPROPER ASSERTION OF THE ATTORNEY-CLIENT
PRIVILEGE
All counsel agreed that it was appropriate for the Magistrate Judge to read the
unredacted version of the September 18, 2009 e-mail. (See 1/3/12 Memo at 3 & Exhs. F-G;
1/6/12 Memo at 3). On January 12, 2012, defense counsel forwarded the unredacted
version, and after a careful review of the entire e-mail, the Magistrate Judge agrees that the

9

This allocation is limited only to the creation of the database. This ruling leaves open the
possibility that defendants may seek, at a later time, reimbursement for time spent by their
attorneys and/or paralegal staff in reviewing these documents.

6

first paragraph is covered by the attorney-client privilege and need not be disclosed. As a
result, the same conclusion is reached with respect to the discussions with counsel that took
place sometime between October 7 and 12, 2009, at issue in the Neviaser deposition (1/3/12
Memo at 3 & Exh. F), which discussion clearly occurred after the September 18, 2009 e-mail.
7. DEFENDANTS’ ALLEGEDLY IMPROPER ASSERTION OF WORK PRODUCT
DOCTRINE
Plaintiff’s Second Request for Production of Documents, dated March 29, 2011,
pertains to defendant Roll having retained a private investigator to investigate plaintiff and
his family members; defendants object to this discovery on the basis of the work product
doctrine. (1/3/12 Memo at 3 & Exh. H; 1/6/12 Memo at 3). As agreed upon by all counsel,
on January 11, 2012, plaintiff’s counsel forwarded to the Magistrate Judge an e-mail string
between defendants Rolls, Bain, and Neviaser, all dated October 8, 2009, and on January 12,
2012, defense counsel forwarded to the Magistrate Judge for her in camera review
correspondence from the private investigator, dated December 2009. Based upon a careful
review of the December 2009 correspondence, the Magistrate Judge agrees that this matter
is protected by the work product doctrine.
8. ADDITIONAL MATTERS
As previously indicated, counsel shall confer with each other in determining a
reasonable time period in which the electronic database can be created, and sufficient time
for defendants to review any documents captured by the search. On or before January
31, 2012, counsel shall forward a status report, either jointly or individually, to this
Magistrate Judge’s Chambers with respect to their progress in this regard. A telephonic
discovery conference will be scheduled thereafter, to set a revised Scheduling Order for the

7

completion of discovery and the filing of dispositive motions.10
This is not a Recommended Ruling but a Ruling on discovery, the standard of review
of which is specified in 28 U.S.C. § 636; FED . R. CIV . P. 6(a), 6(e) & 72; and Rule 72.2 of the
Local Rules for United States Magistrate Judges. As such, it is an order of the Court unless
reversed or modified by the District Judge upon timely made objection.
See 28 U.S.C. § 636(b)(written objections to ruling must be filed within
fourteen days after service of same); FED . R. CIV . P. 6(a), 6(e) & 72; Rule 72.2 of the
Local Rules for United States Magistrate Judges, United States District Court for the District
of Connecticut; Small v. Secretary, H&HS, 892 F.2d. 15, 16 (2d Cir. 1989)(failure to file
timely objection to Magistrate Judge’s recommended ruling may preclude further
appeal to Second Circuit); Caidor v. Onondaga County, 517 F.3d 601, 603-05 (2d Cir.
2008)(failure to file timely objection to Magistrate Judge’s discovery ruling will
preclude further appeal to Second Circuit).
Dated at New Haven, Connecticut, this 17th day of January, 2012.

/s/ Joan G. Margolis, USMJ
Joan Glazer Margolis
United States Magistrate Judge

10

See note 7 supra.

8