Inglis v. Wells Fargo Bank, N.A.

Filing 84

ORDER denying 77 Plaintiff's Motion for Sanctions for Violating Rule 45(e)(2)(B), Fed. R. Civ. P.; granting 82 Plaintiff's Motion for Extension of Time. See Order for details. Signed by Magistrate Judge Carol Mirando on 6/30/2016. (ANW)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
RICHARD K. INGLIS, as Special
Trustee to the trust under the will of
Rosa B. Schweiker, dated February 2,
1961, the Frederick W. Berlinger
Revocable Deed of Trust, dated
10/17/1991, as amended and restated.
Plaintiff,
v.

Case No: 2:14-cv-677-FtM-29CM

WELLS FARGO BANK N.A.,
Defendant.
ORDER
Before the Court are Plaintiff's Motion for Sanctions for Violating Rule
45(e)(2)(B), Fed. R. Civ. P. (Doc. 77) and Plaintiff’s Motion for Extension of Time (Doc.
82). Defendant filed responses in opposition. Docs. 80, 83. For the reasons set
forth below, Plaintiff’s motion for sanctions is denied and the motion for extension is
granted.
Plaintiff is the Special Trustee of the Berlinger Trusts pursuant to the Orders
of the Probate Court of Collier County, Florida. Doc. 1-1 at 5. Plaintiff brought this
action alleging civil theft pursuant to Florida Statutes § 772.11.

Id.

Plaintiff

alleges that Defendant caused injury to the Berlinger Trusts while engaged in trust
administration during the transfer of assets to the successor trustee.

Id.

It is

Plaintiff’s position that Defendant intentionally failed to transfer the $6,464,723.96
to the successor trustee. Id. at 7.

Defendant issued subpoenas to ING, Reliance and SunTrust seeking financial
records.

See Docs. 39, 40, 43. 1

Defendant specifically requested all bank

statements, all deposits made into any and all accounts, all documentation regarding
any incoming and outgoing transaction with regard to any and all accounts held by
ING/Reliance or SunTrust as to the Rose S. Berlinger GST Trust, Rosa B. Schweiker
Trust, Frederick Berlinger Martial Trust, and Frederick Berlinger Family Trust from
January 1, 2011 through December 31, 2011.

Docs. 39 at 2; 40 at 2; 43 at 2.

Defendant also requested correspondence and notes related to communications
between ING/Reliance or SunTrust and Defendant, ING/Reliance and SunTrust
Bank, and ING/Reliance or SunTrust and Bruce Berlinger, Stacey Berlinger a/k/a
Stacey O’Connor, Brian Berlinger and Heather Berlinger regarding the Berlinger
Trust accounts from January 1, 2011 through December 31, 2011. Id.
Plaintiff filed Motions to Modify each of the three subpoenas issued. Docs. 39,
40, 43. Plaintiff objected to the entire subpoena directed to ING/Reliance. Docs. 39
at 3, 43 at 3. Plaintiff also objected to the financial records requested in parts A, B,
and C of the subpoena directed to Suntrust. Doc. 40 at 2. Plaintiff alleged that the
information requested is protected by the financial privilege and also is irrelevant,
and therefore, not discoverable. Docs. 39 at 3, 40 at 2, 43 at 3. Plaintiff, however,
did not object to the request directed to SunTrust for correspondence and notes
related to communications between SunTrust and Defendant, ING/Reliance and

Defendant stated in response to the motion to modify that its subpoena to ING was
reissued to Reliance, as successor to ING. Doc. 47 at 1. Accordingly, the Court will
reference the entities as “ING/Reliance.”
1

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SunTrust, and SunTrust and the beneficiaries. Doc. 40 at 2. After consideration of
the motions to modify, the Court held that “although Plaintiff has a constitutional
right of privacy in the information in the financial records, the documents are
relevant and therefore, discoverable.”

Doc. 79 at 11 (citing Friedman v. Heath

Institute of Port St. Lucie, Inc., 863 So.2d 189, 194 (Fla. 2003)).
Prior to the Court ruling on the motions to modify the subpoenas, Plaintiff filed
the present motion for sanctions. Plaintiff moves for sanctions stating that Defendant
violated Rule 45(e)(2)(B).

Doc 77 at 1.

Plaintiff states that it timely notified

Defendant that documents Defendant subpoenaed were subject to claims of privilege.

Id. at 1. Plaintiff states that pursuant to Rule 45(e)(2)(B), once Plaintiff timely
notified Defendant of the claims of privilege, Defendant was prohibited from
disclosure or use of the information. Id. at 2 (citing Fed. R. Civ. P. 45(e)(2)(B)).
Plaintiff states that instead of complying with the rule, Defendant intentionally used
the documents obtained from subpoenas, which were subject to claims of privilege,
during the depositions of Plaintiff and Bruce D. Berlinger. Id. Plaintiff states that
since those documents were used prior to the claims of privilege or protection were
resolved by the Court, Defendant’s usage violated the federal rules. Id. (citing Fed.
R. Civ. P. 45(e)(2)(B)). Plaintiff also asserts that the Motions to Modify Subpoenas
should have operated to stay discovery of the documents requested in the subpoena
until the Court ruled on the motions. Id. (citing Nationwide Ins. Co. v. Seven-Up

Bottling, Co., No. 91-2267, 1993 WL 82301 (E.D. Pa. Mar. 17, 1993)). Therefore,
Plaintiff alleges that monetary sanctions are warranted under 45(d)(1). Id.

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Defendant responds that Plaintiff’s motion should be denied because Plaintiff
failed to seek a stay of discovery at the time of filing their motions to modify or
anytime between filing the motions to modify and the present motion for sanctions.
Doc. 80 at 3. Additionally, Defendant alleges that at no point prior to filing the
present motion did Plaintiff notify Defendant that the documents produced in
response to the subpoenas were subject to a particular claim or privilege.

Id.

Moreover, Defendant alleges that Plaintiff continually relied upon documents he
sought to prevent Defendant from obtaining.

Id. at 4.

Specifically, Defendant

contends that Plaintiff set the depositions of two SunTrust employees and had every
intention of moving forward with the depositions despite his claims in the motion to
modify that the documents were not relevant and privileged.

Id.

Finally,

Defendant contends that since this Court found that the documents were relevant
and subject to discovery, sanctions are not warranted for Defendant’s use of the
documents because there has been no harm to Plaintiff or the individuals he purports
to represent. Id. at 8.
Federal Rule of Civil Procedure 45(e)(2)(B) provides
[i]f information produced in response to a subpoena is subject to a claim
of privilege or of protection as trial-preparation material, the person
making the claim may notify any party that received the information of
the claim and the basis for it. After being notified, a party must
promptly return, sequester, or destroy the specified information and any
copies it has; must not use or disclose the information until the claim is
resolved. . . .
Fed. R. Civ. P. 45(e)(2)(B). Here, Plaintiff filed motions to modify the subpoenas
issued to SunTrust, ING and Reliance and asserted that the information requested

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was subject to a financial privilege. See Docs. 39, 40, 43. Regardless of whether the
Court imposed a stay, the federal rules explicitly state that a party is prohibited from
using or disclosing information subject to claims of privilege until the claim is
resolved. Fed. R. Civ. P. 45(e)(2)(B). Although Defendant alleges that Plaintiff did
not notify it that the documents were subject to a particular claim of privilege (Doc.
80 at 3), the Court finds this argument to be somewhat disingenuous because the
motions to modify clearly assert that the documents were subject to a financial
privilege. See Docs. 39, 40, 43. Accordingly, Defendant should not have utilized
those documents prior to the Court ruling on the motions to modify. The Court,
however, ultimately ruled that the documents were discoverable. Therefore, there
was no harm done by Defendant’s utilization of the documents in the depositions.
There was no prejudice to Plaintiff. Therefore, the Court finds that sanctions are
not warranted in this particular instance. Defendant, however, is cautioned that
utilization of information subject to a claim of privilege is prohibited under the federal
rules until the claim is resolved. Fed. R. Civ. P. 45(e)(2)(B). Future violations of
the federal rules could result in the imposition of sanctions.
Also before the Court is Plaintiff’s Motion for Extension of Time. Doc. 82.
Plaintiff requests a 17-day extension of the deadline for expert disclosures. Id. at 2.
Defendant states that granting this request would prejudice it because the extension
would allow Defendant only two weeks to prepare to file dispositive motions. Doc.
83 at 3.

Although Plaintiff suggested that the entire schedule be extended by

seventeen days, Defendant was opposed to that suggestion.

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Doc. 82 at 2.

Defendant states that Plaintiff has had sufficient time to disclose its experts, and
Plaintiff has failed to show that his inability to comply with the current deadline was
not due to lack of diligence.

Doc. 83 at 4.

Defendant also acknowledges that

simply extending the expert disclosures and dispositive motions deadlines would not
allow the Court adequate time to rule on the dispositive motions. Id.
Considering the arguments of both parties, the Court finds good cause to
extend the entire Case Management and Scheduling Order (Doc. 64) by thirty days.
This is the first extension of the scheduling order.

Additionally, in an effort to

alleviate prejudice to any party, the Court will allow an extension.
ACCORDINGLY, it is hereby
ORDERED:
1.

Plaintiff's Motion for Sanctions for Violating Rule 45(e)(2)(B), Fed. R.

Civ. P. (Doc. 77) is DENIED.
2.

Plaintiff’s Motion for Extension of Time (Doc. 82) is GRANTED. The

Court will extend the Case Management and Scheduling Order (Doc. 64) by thirty
(30) days.
3.

The Clerk is directed to enter an Amended Case Management and

Scheduling Order.
4.

All other directives set forth in the Case Management and Scheduling

Order (Doc. 64) remain unchanged.

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DONE and ORDERED in Fort Myers, Florida on this 30th day of June, 2016.

Copies:
Counsel of record

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