Berlinger et al v. Wells Fargo, N.A. as Successor to Wachovia Bank, N.A.

Filing 234

ORDER denying 192 , 193 , 194 , 195 Plaintiffs' Motions for Sanctions; denying 208 Plaintiffs' Motion to Compel Discovery Responses and for Payment of Fees Pursuant to Federal Rule of Civil Procedure 37; denying 225 Plaintiffs' Motion for Leave to File Reply to Defendant Wells Fargo Bank, N.A.'s Memorandum in Opposition to Plaintiffs' Motion for Sanctions. Signed by Magistrate Judge Carol Mirando on 9/24/2014. (BLW)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
STACEY SUE BERLINGER, as
beneficiaries to Rosa B. Schweiker
Trust and all of its related trusts, also
known as STACEY BERLINGER
O’CONNOR, BRIAN BRUCE
BERLINGER,
Plaintiffs,
v.

Case No: 2:11-cv-459-FtM-29CM

WELLS FARGO, N.A., AS
SUCCESSOR TO WACHOVIA BANK,
N.A., as Corporate Trustee to the
Rosa B. Schweiker Trust, and all of its
related trusts,
Defendant/Third
Party Plaintiff,
BRUCE D. BERLINGER and
SUE CASSELBERRY,
Third Party
Defendants.
ORDER
Before the Court is Plaintiffs’ Motion to Compel Discovery Responses and for
Payment of Fees Pursuant to Federal Rule of Civil Procedure 37 (Doc. 208, “Motion
to Compel”) and Defendant Wells Fargo N.A.’s (“Wells Fargo”) Response in
Opposition (Doc. 229). Plaintiffs also have filed motions for sanctions pursuant to
Federal Rule of Civil Procedure 30 against attorneys Barbara Fein, counsel to nonparty deponent (“Fein”), and Amy Rubin, attorney for Wells Fargo (“Rubin”), for

alleged obstructive conduct at the deposition of non-party witness Linda La Vay (“La
Vay”) and two other witnesses’ depositions. Docs. 192, 193, 194, 195. Wells Fargo
has responded in opposition. 1 Docs. 222, 223, 224.
In this case, Plaintiffs Stacey Sue Berlinger, Brian Bruce Berlinger and
Heather Anne Berlinger, beneficiaries to the Rosa B. Schweiker Trust and all of its
related trusts, filed a three-count Second Amended Complaint (Doc. 93) against Wells
Fargo, corporate co-trustee of the trusts. Plaintiffs bring claims for breach of trust,
breach of fiduciary duty and civil theft. Id. On May 15, 2014, Plaintiffs conducted
La Vay’s deposition in Lansdale, Pennsylvania. La Vay is a former employee of
Wells Fargo who was a trust advisor who administered the trusts at issue in this
case. La Vay was noticed as a fact witness and represented at the deposition by her
personal counsel, Fein. Wells Fargo was represented by Rubin. Plaintiffs argue
that there were six questions posed to La Vay at her deposition to which Fein and/or
Rubin improperly objected on attorney-client privilege grounds and to which the
witness either did not answer or answered evasively.
For the reasons set forth herein, the Motion to Compel is denied, and upon
review of the transcripts of the depositions and the briefing, the Court finds that
sanctions are not warranted.

Fein is personal counsel to La Vay (a non-party) and therefore has not entered an
appearance in this matter nor responded to the Motion for Sanctions filed against her. Doc.
192.
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Motion to Compel
The La Vay deposition questions at issue in the Motion to Compel are as follows
(the Court has provided context, where appropriate): 2
QUESTION #1:
In this instance, Plaintiffs’ counsel is questioning the witness about a letter La
Vay sent to Third-Party Defendant Bruce D. Berlinger on August 1, 2008, expressing
concerns regarding trust funds. Doc. 208-1. La Vay begins by reading from the
letter:
La Vay: Dear Bruce, as you know, I had been expressing Wachovia’s
concern to you regarding the rate at which funds are being expended
from the various Schweiker/Berlinger family trusts for you and your
children. The matter is sufficiently serious that I consulted legal
counsel in Pennsylvania and Florida. The lawyers have echoed my
concern about the distributions from the trust.
Question #1: Okay, stop right there. In terms of that particular
paragraph, what exactly did you convey to the legal counsel and what
exactly were their concerns about the distributions?
Rubin: Objection, I’ll instruct her not to answer.
Fein: Objection.
Rubin: Attorney-client privilege.

A complete copy of the deposition transcripts have been filed with the Court under
seal pursuant to this Court’s June 16, 2014 Order. Doc. 169. The transcripts were sealed
at the request of the parties because they contain testimony relating to Defendant’s policies
and procedures. Doc. 166. None of the deposition testimony the Court includes in this
Order relates to such policies and procedures.
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Doc. 179 at 41:11-42:6.

Plaintiffs argue that the question is not covered by the

attorney-client privilege because it does not elicit attorney-client communications
between a lawyer and a client for the rendition of legal services, but rather was for
business advice. Alternatively, to the extent that the privilege applies, they assert
that La Vay waived the privilege by conveying the concerns she expressed to legal
counsel to Mr. Berlinger. 3 Wells Fargo responds that the privilege applies because
this is a communication between La Vay and in-house counsel. Wells Fargo explains
that La Vay was consulting with legal counsel regarding the trusts and concerns
related to Bruce Berlinger’s expenditures as primary beneficiary.
Florida law governs the application of the attorney-client privilege in diversity
actions such as this that raise no federal question. Palmer v. Westfield Ins. Co., 2006
WL 2612168, at *2 (M.D. Fla. June 30, 2006). The attorney-client privilege protects
communications between a client and attorney made in confidence for the purpose of
securing legal advice or assistance. S.E.C. v. Dowdell, 2006 WL 3876294, at *3 (M.D.

Plaintiffs also argue that the question does not call for privileged information under
the common interest doctrine because Wells Fargo’s attorneys were in fact acting as attorney
for the beneficiaries in the underlying divorce proceeding. Thus, Plaintiffs argue that Wells
Fargo’s attorneys cannot now take an adversarial position to them in this substantially
related proceeding. Under the common interest doctrine, “litigants who share unified
interest [may] exchange . . . privileged information to adequately prepare their cases without
losing the protection afforded by the privilege.” Visual Scene, Inc. v. Pilkington Bros., PLC,
508 S.2d 437, 440 (Fla. 3d DCA 1987) (citing Western Fuels Ass’n v. Burlington Northern
Railroad Co., 102 F.R.D. 201 (D. Wyo. 1984)). The common interest doctrine considers
parties with separate counsel to nevertheless be aligned for the purposes of a privilege
analysis when those parties have legal interests which are allied, as long as the parties’
communications were with a lawyer “consulted in common.” Fla. Stat. § 90.502(4)(e).
This argument previously was rejected by the Court wherein the Court found that
there was no attorney-client relationship between Plaintiffs and Amy Rubin, attorney for
Wells Fargo, in the prior divorce proceeding. Doc. 58 at 7.
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Fla. May 15, 2006) (citing Cox v. Adm’r U.S. Steel & Carnegie, 17 F.3d 1386, 1414
(11th Cir. 1994)).

The party invoking an attorney-client privilege must prove, as

an initial matter, that “an attorney-client relationship existed and that the particular
communications were confidential.” United States v. Schaltenbrand, 930 F.2d 1554,
1562 (11th Cir. 1991). For the privilege to apply, the communications must be shown
to be made to an attorney confidentially, in the attorney’s professional capacity, “‘for
the purpose of securing legal advice or assistance.’” Id. (quoting United States v.

Ponder, 475 F.2d 37, 39 (5th Cir. 1973)). The attorney-client privilege only extends
to confidential communications whose primary or predominate purpose is to seek or
provide legal advice or assistance. See, e.g., Preferred Care Partners Holding Corp.

v. Humana, Inc., 258 F.R.D. 684 (S.D. Fla. 2009) (privilege does not extend to
communications with an attorney related solely to business advice). Pursuant to
Federal Rule of Civil Procedure 30(c)(2), “[a] person may instruct a deponent not to
answer only when necessary to preserve a privilege, to enforce a limitation ordered
by the court, or to present a motion under Rule 30(d)(3).”
The question asked for communications between La Vay and in-house counsel
concerning how the bank was administering and making distributions from the
trusts.

Therefore, the Court finds that the question called for attorney-client

communications that are privileged, and defense counsel’s objections and instruction
not to answer were proper. With regard to Plaintiffs’ argument that the privilege
was waived because La Vay communicated the concerns she expressed to legal
counsel to Mr. Berlinger, it is not clear to the Court that this is the case. La Vay was

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not asked to what extent the concerns outlined in the letter contained
communications between herself and in-house counsel.
QUESTIONS #2 & 3:
Plaintiffs’ counsel: Continue to read.
La Vay: New paragraph: Since the beginning of this year, we have been
paying to you from the trust $24,400 per month for your own living
expenses. In addition, since you were divorced from Sue in 2007, we
have been distributing an additional $16,000 per month to cover your
alimony obligations.
Plaintiffs’ counsel: Stop right there. Do you see the paragraph
halfway down the first page which is Bates stamped PLAA00092 which
states, “Further, the corporate trustee may not make distributions to
you or your descendants which will discharge any support obligation of
you, the grantor’s son.” Do you see that?
La Vay: Yes.
Plaintiffs’ counsel: Was that in reference to the Rose Berlinger trust,
was it not, according to your letter?
LaVay: Yes.
Plaintiffs’ counsel: In it those distributions that were being made from
the Schweiker trust to pay alimony obligations of $16,000 a month, to
whatever extent it was being paid from that trust, would be in violation
of those trust provisions; would it not?
Fein: Objection.
Rubin: Let me object for serious reasons. Number one, improper
foundation whether there’s any payments from that trust; two, I’ll object
it’s misleading the witness, all payments were made to Bruce Berlinger;
three, I’ll object to the extent the Florida laws require something other
than what the trust may or may not be.
Question #2: Was it in violation of the trust provisions?
Fein: Object.

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The witness: I remember what you said, but what you just quoted—
Fein: Objection. She’s not an attorney. You asked her for a legal
conclusion. Was it a violation of – objection. Don’t answer it. Move
on.
Question #3: In your opinion as a trust administrator, was it in
violation of the trust documents that you reference in this letter?
Rubin: All the same objections apply.
Fein: Objection
Plaintiffs’ counsel: You can answer.
Fein: No, she can’t.
Plaintiffs’ counsel: As a trust administrator.
Fein: You’re asking her for a legal conclusion. She says in the letter
she sought legal counsel’s advice. You can’t answer the question.
Move on.
Doc. 179 at 42:19-45:4.
Plaintiffs argue that these questions do not elicit attorney-client privileged
communications and that opposing counsel did not object on this basis.

Rather,

Plaintiffs assert that the sole basis for the objections was to form, and it was therefore
improper for counsel to instruct the witness not to answer on this basis. Wells Fargo
responds that Fein was making an attorney-client privilege objection. Although the
Court agrees that the witness must answer the question subject to an objection to
form, in this line of questioning Fein also stated that her objection was based in part
on the fact that La Vay sought legal counsel’s advice in connection with the letter.
Doc. 179 at 45:1-2. Although La Vay could have answered the question to the extent
that the answer would not divulge any attorney-client privileged communications

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between La Vay and in-house counsel regarding the bank’s administration of the
trust funds, Plaintiffs’ counsel did not seek to further question the witness to the
extent that this was the case. La Vay’s deposition was not cut short by defense
counsel, and Plaintiffs’ counsel did not seek Court intervention during the deposition.
Thus, the Court finds that reopening the deposition at this point in the proceedings
is not appropriate. 4
QUESTIONS #4-6:
Plaintiffs’ counsel: But I’m talking about the statement you made in
the letter, “Further the corporate trustee may not make distributions to
you or your descendants which will discharge any support or [sic]
obligation of you, the grantor’s son.” My question was, was that in
reference to the alimony payments that were discussed in paragraph 2
of the letter on the first page?
Fein: Objection. We’ve already objected to that.
attorney. Move on from this topic.

She’s not an

Plaintiffs’ counsel: I’m asking questions is it referencing.
Rubin: Form and --Plaintiffs’ counsel: I note your objection. Are you going to tell her not
to answer that question?
Fein: If she knows the answer as a trust administrator, she can
answer. You’re asking her --Plaintiffs’ counsel: That’s my question.
Fein: No. You’re asking her does it violate the Court-ordered support
document? She’s not an attorney.

The Court notes that Plaintiffs have filed a Motion for Leave to Take Second
Deposition of Linda La Vay, but on different grounds than those argued in the instant Motion
to Compel. Doc. 233, “Motion for Leave.” Therefore, the Motion for Leave does not affect
the Court’s analysis here.
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Plaintiffs’ counsel: That’s not what I’m asking her. I’m saying it is
referencing that.
Doc. 179 at 47:7-48:9.
Question #4: Do you know what a support obligation is?
La Vay: No.
Doc. 179 at 54:6-7.
Question #5: I’m asking you, do you know what the phrase “support
obligation” means, that which you wrote on that letter?
La Vay: I cannot give you a legal opinion on that.
Doc. 179 at 54:15-18.
Question #6: My question to you, ma’am, is what did it mean to you
when you used the words “support obligation?” Not where you got it
from; what did it mean to you?
Mr. Hymowitz: Objection to form.
Rubin: Objection.
Fein: Objection
La Vay: I think you’re asking an opinion, and I don’t really have one.
Doc. 179 at 104:11-19.
Plaintiffs argue that La Vay was evasive when she answered this question.
Plaintiffs note that it seems “inconceivable” that La Vay does not know what a
support obligation means based on her experience as a trust advisor. Plaintiffs do
not seem to be making any argument regarding opposing counsel’s objections to the
questions, rather, they just take issue with the witness’ answer. The Court agrees
that since there was no privilege objection, the deponent was required to answer the

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question, which she did.

Plaintiffs’ arguments regarding the sufficiency of her

answer go to impeachment of the witness and are not a basis for compelling the
witness to provide a better response. This is not a case in which La Vay was noticed
as a witness pursuant to Federal Rule 30(b)(6), which would have required the
deponent to be knowledgeable about the subject matter identified as the area of
inquiry.
Motions for Sanctions
Plaintiffs have moved for sanctions pursuant to Federal Rule 30 against Fein5
(Doc. 192) and Rubin (Doc. 195) for their conduct at the La Vay deposition, arguing
that they impeded, delayed and frustrated the fair examination of La Vay when they
instructed her not to answer numerous questions and made several speaking and
suggestive objections to mislead the deponent. Plaintiffs also move for sanctions
against Rubin regarding the depositions of Thomas Craven (“Craven”) and Bernard
DeStafney (“DeStafney”), both former employees of Wells Fargo and noticed as fact
witnesses. As sanctions, Plaintiffs request the Court include all reasonable fees and
costs for the depositions, as well as the fees and costs for a continued deposition of
the witnesses, which they necessitated.

Wells Fargo responds that much of

Plaintiffs counsel’s questions were complicated, compound and duplicative, and it was
obligated to object on the record pursuant to Federal Rule 32(d)(3)(B), which provides:
Plaintiffs take issue with the fact that Ms. Fein is an attorney licensed in the United
States District Court for the Eastern District of Pennsylvania, and not licensed to practice in
the United States District Court for the Middle District of Florida and therefore was not
permitted to appear and make objections at the deposition. The deposition, however, was
noticed for and took place in Lansdale, Pennsylvania, located in the Eastern District of
Pennsylvania.
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(B)
Objection to an Error or Irregularity. An objection to an error or
irregularity at an oral examination is waived if:
(i) it relates to the manner of taking the deposition, the
form of a question or answer, the oath or affirmation, a
party’s conduct, or other matters that might have been
corrected at that time; and
(ii) it is not timely made during the deposition.
Wells Fargo further argues that the deposition was delayed and frustrated because
copies of the exhibits were not provided to opposing counsel prior to the deposition,
although they were requested. Plaintiffs’ counsel also provided only one copy of the
exhibits, which had to be passed between both the witness and counsel.
The court has broad discretion to fashion appropriate sanctions for the
violation of discovery obligations. United States v. Certain Real Property Located at

Route 1, 126 F.3d 1314, 1317 (11th Cir. 1997). Pursuant to Federal Rule 30(d)(2),
“[t]he court may impose an appropriate sanction – including the reasonable expenses
and attorney’s fees incurred by any party – on a person who impedes, delays, or
frustrates the fair examination of the deponent.”
A review of the deposition transcripts reveal that counsel were less than
professional with each other. This Court’s Civil Discovery Practice Manual states
that “those in attendance should conduct themselves in the manner expected during
courtroom proceedings in the presence of a judge.” Handbook on Civil Discovery

Practice in the United States District Court for the Middle District of Florida at
II.A.2. Surely counsel for all parties involved would not have conducted themselves

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in court as they did in the depositions. The Manual further provides that conduct
during depositions should accord with Local Rule 5.03(7), (8), (9), (12), (13) and (16). 6
The Court finds that sanctions are not warranted.

As noted, La Vay’s

deposition was not cut short by defense counsel, and the DeStafney and Craven
depositions lasted less than the maximum seven hours allowed under Federal Rule
of Civil Procedure 30(d)(1). 7

Thus, Plaintiffs’ counsel had the opportunity to

continue questioning the witnesses at that time, and the request to continue the
depositions is not well taken. Counsel for all parties are admonished and advised in
the future that they should conduct themselves professionally, putting aside any
personal animosity and engage in good faith efforts to work with opposing counsel in
order to best serve their clients.

(7) Avoid disparaging personal remarks or acrimony toward opposing counsel
and remain wholly detached from any ill feeling between the litigants or
witnesses.

6

(8) Refer to all persons, including witnesses, other counsel and the parties by
their surnames and not by their first or given names.
(9) Only one attorney for each party shall examine, or cross examine each
witness. The attorney stating objections, if any, during direct examination,
shall be the attorney recognized for cross examination.
(12) In making objections counsel should state only the legal grounds for the
objection and should withhold all further comment or argument unless
elaboration is requested by the Court.
(13) In examining a witness, counsel shall not repeat or echo the answer given
by the witness.
(16) Counsel shall admonish all persons at counsel table that gestures, facial
expressions, audible comments, or the like, as manifestations of approval or
disapproval during the testimony of witnesses, or at any other time, are
absolutely prohibited.
M.D. Fla. Rule 5.03.
7

In fact, the DeStafney deposition lasted less than three hours.

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ACCORDINGLY, it is hereby
ORDERED:
1.

Plaintiffs’ Motion to Compel Discovery Responses and for Payment of

Fees Pursuant to Federal Rule of Civil Procedure 37 (Doc. 208) is DENIED.
2.

Plaintiffs’ Motions for Sanctions Pursuant to Federal Rule of Civil

Procedure 30 (Docs. 192, 193, 194, 195) are DENIED.
3.

Plaintiffs’ Motion for Leave to File Reply to Defendant Wells Fargo

Bank, N.A.’s Memorandum in Opposition to Plaintiffs’ Motion for Sanctions (Doc.
225) is DENIED. 8
DONE and ORDERED in Fort Myers, Florida on this 24th day of September,
2014.

Copies:
Counsel of record

The Court finds that a reply brief would not aid the Court in its determination of
the issues.
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