Securities & Exchange Commission v. BIH Corporation et al

Filing 205

OPINION AND ORDER denying 195 Plaintiff's Motion for Reconsideration of Certain Portions of the Court's Opinion and Order Denying Summary Judgment Against Defendant Edward W. Hayter; denying 197 Plaintiff's Motion for Court to Rec onsider Its Order Partially Granting and Partially Denying the SEC's Motion to Strike Defendant Edward Hayter's Deposition Designations and Certain of His Trial Witnesses and in the Alternative the Commission's Motion for Leave to Take Brief Depositions of Hayter's Undisclosed Witnesses; and reopening discovery for the limited purpose of allowing certain depositions. See OPINION AND ORDER for details. Signed by Judge John E. Steele on 7/10/2014. (MAW)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
SECURITIES
COMMISSION,

&

EXCHANGE

Plaintiff,
v.

Case No: 2:10-cv-577-FtM-29DNF

BIH CORPORATION, WAYNE A.
BURMASTER, EDWARD W. HAYTER,
NORTH BAY SOUTH CORPORATION,
THE CADDO CORPORATION, and
BEAVER
CREEK
FINANCIAL
CORPORATION,
Defendants.
OPINION AND ORDER
This matter comes before the Court on the following motions:
(1) Plaintiff's Motion for Reconsideration of Certain Portions of
the Court's Opinion and Order Denying Summary Judgment Against
Defendant Edward W. Hayter (Doc. #195) filed on March 25, 2014;
and (2) Plaintiff’s Motion for Court to Reconsider Its Order
Partially Granting and Partially Denying the SEC’s Motion to Strike
Defendant Edward Hayter’s Deposition Designations and Certain of
His Trial Witnesses and in the Alternative the Commission’s Motion
for

Leave

to

Take

Brief

Depositions

of

Hayter’s

Witnesses (Doc. #197) filed on April 3, 2014.

Undisclosed

Defendant Edward

W. Hayter filed Responses (Docs. ##201, 203) on April 9 and April
30, 2014 respectively.

I.
Plaintiff Securities and Exchange Commission (Plaintiff or
SEC) filed a five-count Complaint (Doc. #1) against Defendants
Wayne A. Burmaster, Jr. (Burmaster), Edward W. Hayter (Hayter),
BIH Corporation (BIH), North Bay South Corporation (North Bay),
Bimini Reef Real Estate, Inc. (Bimini Reef), Riverview Capital
Inc. (Riverview Capital), Christopher L. Astrom (Astrom), and
Damian

B.

Guthrie

(Guthrie),

and

Relief

Defendants

Baron

International, Inc. (Baron International), The Caddo Corporation
(Caddo), and Beaver Creek Financial Corporation (Beaver Creek) for
violations of Sections 5(a), 5(c), and 17(a) of the Securities Act
and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.1
On March 2, 2012, the SEC moved for summary judgment against
Hayter and Burmaster.

(Doc. #67.)

On March 4, 2014, the Court

entered an Order (Doc. #185) striking Burmaster’s Amended Answer
and his remaining Affirmative Defenses (Doc. #93).

Accordingly,

the Court denied summary judgment as to Burmaster without prejudice
in order to allow the SEC to move for a default and default

1

On October 25, 2010, the Court entered consent judgments against
Riverview Capital, Bimini Reef, Guthrie, and Astrom. (Docs. ##24,
25.) On September 26, 2012, the Court entered an Opinion and Order
granting default judgments against BIH, North Bay, Caddo, and
Beaver Creek; however, the Court withheld entry of the judgment
pending submission of a motion by Plaintiff. (Doc. #121.) On
December 19, 2012, the Court entered a default judgment against
Baron International. (Doc. #132.) Therefore, Plaintiff’s only
pending claims are against Defendants Hayter and Burmaster.

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judgment.

(Doc. #189.)

On March 13, 2014 the Court denied the

SEC’s motion for summary judgment against Hayter on the merits.
(Id.)

On

March

deposition

3,

2014,

designations

the

and

SEC

trial

moved

to

strike

witnesses.

Hayter’s

(Doc.

#184.)

Following oral argument at the March 17, 2014 Final Pre-Trial
Conference, the Court struck from Hayter’s witness list six SEC
attorneys, but otherwise denied the motion.

(Doc. #193.)

The SEC

now seeks reconsideration of (1) the Court’s denial of summary
judgment against Hayter; and (2) the Court’s partial denial of the
motion

to

strike

witnesses.

Hayter’s

deposition

designations

and

trial

The SEC also seeks an order requiring Hayter to make

available for depositions certain trial witnesses in the event
that the Court does not strike the witnesses pursuant to the motion
for reconsideration.
II.
Reconsideration

of

a

court’s

previous

order

is

an

extraordinary remedy and, thus, is a power which should be used
sparingly.

American Ass’n of People with Disabilities v. Hood,

278 F. Supp. 2d 1337, 1339 (M.D. Fla. 2003) (citing Taylor Woodrow
Constr. Corp. v. Sarasota/Manatee Airport Auth., 814 F. Supp. 1072,
1072-73 (M.D. Fla. 1993)).
raise

new

previously.”

issues,

not

“A motion for reconsideration should
merely

readdress

issues

litigated

PaineWebber Income Props. Three Ltd. P'ship v. Mobil

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Oil Corp., 902 F. Supp. 1514, 1521 (M.D. Fla. 1995).

Courts have

“delineated three major grounds justifying reconsideration: (1) an
intervening change in controlling law; (2) the availability of new
evidence; [and] (3) the need to correct clear error or prevent
manifest injustice.”

Sussman v. Salem, Saxon & Nielsen, P.A., 153

F.R.D. 689, 694 (M.D. Fla. 1994).

Unless the movant’s arguments

fall into one of these categories, the motion must be denied.
The motion to reconsider must set forth facts or law of a
strongly convincing nature to demonstrate to the court the reason
to reverse its prior decision.

Taylor Woodrow, 814 F. Supp. at

1073; PaineWebber, 902 F. Supp. at 1521.

“When issues have been

carefully considered and decisions rendered, the only reason which
should commend reconsideration of that decision is a change in the
factual or legal underpinning upon which the decision was based.”
Taylor Woodrow, 814 F. Supp. at 1072–73.
A motion for reconsideration does not provide an opportunity
to simply reargue—or argue for the first time—an issue the Court
has once determined.
first

drafts,

subject

litigant’s pleasure.”

Court opinions “are not intended as mere
to

revision

and

reconsideration

at

a

Quaker Alloy Casting Co. v. Gulfco Indus.,

Inc., 123 F.R.D. 282, 288 (N.D. Ill. 1988).

“The burden is upon

the movant to establish the extraordinary circumstances supporting
reconsideration.”

Mannings v. Sch. Bd. of Hillsborough Cnty., 149

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F.R.D. 235, 235 (M.D. Fla. 1993).
III.
A.

The Court’s
Judgment

Order

Denying

The

SEC’s

Motion

for

Summary

The SEC argues that because the Court found material issues
of disputed fact bearing on some (but not all) elements of its
causes of action against Hayter, the Court should have granted
partial summary judgment in favor of the SEC on the undisputed
elements.

(Doc. #195.)

Hayter responds that reconsideration is

not appropriate because the SEC did not seek partial summary
judgment

on

each

individual

element

and,

therefore,

Hayter’s

summary judgment opposition brief did not endeavor to rebut every
element of every cause of action.

(Doc. #201.)

The SEC is correct that a court may grant partial summary
judgment as to an element of a party’s case when the element lacks
any genuine issue of material fact.

See Fed. R. Civ. P. 56(g).

However, the SEC cites no case law requiring a court to do so
where, as here, the SEC did not explicitly seek partial summary
judgment on any particular element.

To the contrary, the Advisory

Committee Notes accompanying the 2010 Amendments to Rule 56 caution
that:
A nonmovant, for example, may feel confident that
a genuine dispute as to one or a few facts will
defeat the motion, and prefer to avoid the cost of
detailed response to all facts stated by the
movant. This position should be available without

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running the risk that the fact will be taken as
established under subdivision (g) or otherwise
found to have been accepted for other purposes.
Id.

Accordingly, the SEC cannot show the requisite intervening

change in controlling law, availability of new evidence, or need
to correct clear error or prevent manifest injustice necessary to
warrant

reconsideration.

Therefore,

the

SEC’s

motion

for

reconsideration is denied.
B.

The Court’s Order Partially Denying The SEC’s Motion to Strike
The

SEC

witnesses

should

disclosed.
deposition

argues
be

that

three

stricken

(Doc. #197.)
designations

of

Hayter’s

because

they

remaining
were

not

trial
timely

The SEC further argues that Hayter’s
should

be

stricken

in

their

entirety

because they did not comply with the Court’s Case Management and
Scheduling Order.

(Id.)

Failing that, the SEC requests that the

Court strike the portions of Hayter’s deposition designations in
which the deponents offered unsolicited statements, and those in
which deponents Christian Gallo and Burmaster offered substantive
testimony despite invoking the 5th Amendment in response to the
SEC’s questions.

(Id.)

Each of these arguments was previously

made in identical fashion by the SEC in its initial motion to
strike, and the SEC has not identified any change in controlling
law, availability of new evidence, or need to correct clear error
or

prevent

manifest

injustice

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necessary

to

warrant

reconsideration.

Accordingly,

the

SEC’s

motion

for

reconsideration is denied.
C.

The SEC’s Request That Hayter Make Certain Trial Witnesses
Available for Depositions
The SEC wishes to depose three of Hayter’s remaining trial

witnesses: (1) Cassandra Armento, (2) Sam Israel, and (3) an
unnamed Custodian of Records for Trust Services, S.A.

These

witnesses were not listed in Hayter’s Rule 26 disclosures and were
not identified as potential witnesses until February 10, 2014 when
Hayter filed his Witness List in connection with the parties’ Joint
Pretrial Statement.

(Doc. #179-3.)

The SEC seeks an order

requiring Hayter to make these three witnesses available for
depositions.

(Doc. #195.)

If the witnesses do not appear for the

requested depositions, the SEC argues that they should be prevented
from testifying at trial.

(Id.)

Hayter responds that the SEC has

not issued deposition notices for any of the three witnesses and,
therefore, it would be unduly burdensome to require him to secure
their presence for both depositions and trial.

(Doc. #201.)

As the SEC has not previously sought to depose the three
witnesses and there is no evidence that the witnesses are under
Hayter’s control, the Court will not place the burden on Hayter to
secure their presence for depositions.

However, given the timing

of Hayter’s identification of the witnesses, the Court will reopen
discovery for the limited purpose of allowing the SEC to issue

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deposition notices and subpoenas to the three witnesses.

To

facilitate this process, within seven days of the date of this
order Hayter shall identify the name of the individual who will
testify on behalf of Trust Services, S.A.
In the event any of the three witnesses fail to appear for
properly-noticed depositions, the Court will entertain potential
remedies at that time.

However, the Court notes that sanctions

against Hayter, such as preventing non-appearing witnesses from
testifying

at

trial,

are

unlikely

absent

evidence

that

the

witnesses were under his control or that he took any action to
procure their failure to appear.

See Hernandez v. Tregea, No. 07-

CV-149, 2008 WL 3157192, at *3 (M.D. Fla. Aug. 4, 2008) (rejecting
magistrate judge’s recommendation that non-party witnesses be
prevented from testifying at trial as sanction for failure to
appear for depositions).
Accordingly, it is hereby
ORDERED AND ADJUDGED:
1.

Plaintiff's

Motion

for

Reconsideration

of

Certain

Portions of the Court's Opinion and Order Denying Summary Judgment
Against Defendant Edward W. Hayter (Doc. #195) is DENIED.
2.

Plaintiff’s Motion for Court to Reconsider Its Order

Partially Granting and Partially Denying the SEC’s Motion to Strike
Defendant Edward Hayter’s Deposition Designations and Certain of

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His Trial Witnesses and in the Alternative the Commission’s Motion
for

Leave

to

Take

Brief

Depositions

of

Hayter’s

the

limited

Undisclosed

Witnesses (Doc. #197) is DENIED.
3.

Discovery

is

reopened

for

purpose

of

allowing the SEC to depose Cassandra Armento, Sam Israel, and the
Custodian

of

Records

for

Trust

Services,

S.A.

Hayter

shall

identify the name of the individual testifying on behalf of Trust
Services, S.A. within SEVEN (7) DAYS of the date of this Order.
DONE and ORDERED at Fort Myers, Florida, this
of July, 2014.

Copies:
Counsel of Record

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10th

day