NetJets Aviation, Inc. et al v. Peter Sleiman Development Group, LLC et al

Filing 124

ORDER granting in part and denying in part 116 Motion to compel. Signed by Magistrate Judge Monte C. Richardson on 5/16/2012. (MOH)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
JACKSONVILLE DIVISION
NETJETS AVIATION, INC. and NETJETS
SALES, INC.,
Plaintiffs,
vs.

Case No. 3:10-cv-483-J-32MCR

PETER SLEIMAN DEVELOPMENT GROUP,
LLC, PETER SLEIMAN, and JENNIFER
WARD,
Defendants.
_____________________________________/

ORDER
THIS CAUSE is before the Court on Defendants’ Motion to Compel (Doc. 116)
filed April 12, 2012. Plaintiffs filed a response in opposition to this motion (Doc. 117) on
April 30, 2012. Accordingly, the matter is now ripe for judicial review.
I. BACKGROUND
The instant litigation stems from contracts entered into between Plaintiffs and a
Florida corporation, J.Ward. When J.Ward breached the contracts by failing to pay
monies owed, Plaintiffs sued J.Ward in Ohio state court and obtained a judgment
against it. Plaintiffs were unable to collect on the judgment and subsequently brought
the instant litigation initially alleging claims for corporate alter ego liability for breach of
contract and breach of contract implied-in-fact against Defendant, Peter Sleiman
Development Group (“PSDG”) related to the purchase and lease of fractional ownership
interests in jet aircrafts by J.Ward, Inc. (Doc. 32). Plaintiffs also alleged claims of
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quasi-contract and unjust enrichment against PSDG, Peter Sleiman (“Sleiman”), and
Jennifer Ward (“Ward”) for private jet travel and related services provided to and
received by Defendants. Id. Plaintiffs subsequently amended the complaint to include
claims for alter ego liability against Sleiman and Ward related to J.Ward’s purchase and
lease of the fractional ownership interests in the aircraft. (Doc. 63).
In February 2011, Defendants, PSDG and Sleiman, served Plaintiffs with
requests for production and interrogatories. Plaintiffs responded on March 31, 2011.
Defendants contend Plaintiffs’ objections and responses to many of the discovery
requests are deficient and therefore, they filed the instant Motion to Compel.
II. ANALYSIS
Motions to compel discovery under Rule 37(a) are committed to the sound
discretion of the trial court. See Commercial Union Ins. Co. v. Westrope, 730 F.2d 729,
731 (11th Cir. 1984). The trial court’s exercise of discretion regarding discovery orders
will be sustained absent a finding of abuse of that discretion to the prejudice of a party.
See Westrope, 730 F.2d at 731.
The overall purpose of discovery under the Federal Rules is to require the
disclosure of all relevant information so that the ultimate resolution of disputed issues in
any civil action may be based on a full and accurate understanding of the true facts, and
therefore, embody a fair and just result. See United States v. Proctor & Gamble Co.,
356 U.S. 677, 682, 78 S.Ct. 983 (1958). Discovery is intended to operate with minimal
judicial supervision unless a dispute arises and one of the parties files a motion

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requiring judicial intervention. Furthermore, “[d]iscovery in this district should be
practiced with a spirit of cooperation and civility.” Middle District Discovery (2001) at 1.
In the instant case, Defendants contend many of Plaintiffs’ responses to their
discovery requests are deficient. Specifically, Defendants contend Plaintiffs’ boilerplate
objections are not sufficiently detailed. Plaintiffs respond that they conferred with
Defendants and provided further detail regarding their objections. Defendants further
contend the information they seek in the discovery requests is relevant despite Plaintiffs’
claims to the contrary. The Court will address each of Defendants’ allegations.
Request for Production No. 5
In this request, Defendants seek all documents and communications related to
the sale, lease, or use of the Subject Aircraft to or by any person or entity during 2006
and 2007. Defendants contend this information regarding the use of the jets by
Defendants and other individuals and entities is relevant because Plaintiffs’ claims arise
out of the use of the jets. Further, Defendants claim that because Plaintiffs allege
Defendants’ use of the jets was improper, reviewing documents relating to other
individuals’ use of the aircraft will lead to the discovery of relevant information regarding
the propriety of Defendants’ use. Finally, Defendants believe the requested information
will reflect the date Plaintiffs resold J.Ward’s share of the aircraft, which will be relevant
with respect to Plaintiffs’ damages claim.
Plaintiffs respond that their claims are based upon Defendants’ domination and
control of J.Ward and Defendants’ acceptance of flights on private aircraft provided by
Plaintiffs without payment. Accordingly, the use of the aircraft by other individuals and

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entities is not relevant to the instant litigation. Moreover, Plaintiffs point out that the sale
or lease of the aircraft by other individuals or entities has no bearing on their damages
as pursuant to the agreements, damages are determined by specific dates and are not
contingent upon Plaintiffs’ re-selling the interest.
Rule 26(b)(1) of the Federal Rules of Civil Procedure provides that “[p]arties may
obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim
or defense . . .” Courts construe relevancy “broadly to encompass any matter that
bears on, or that reasonably could lead to other matter[s] that could bear on, any issue
that is or may be in the case.” Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351,
98 S.Ct. 2380 (1978) (citing Hickman v. Taylor, 329 U.S. 495, 501, 67 S.Ct. 385
(1947)). Relevant information is discoverable even if it is not admissible at trial, “if the
discovery appears reasonably calculated to lead to the discovery of admissible
evidence.” Rule 26(b)(1), Fed.R.Civ.P. The Federal Rules of Civil Procedure strongly
favor full discovery whenever possible. Moore v. Armour Pharmaceutical Co., 927 F.2d
1194, 1197 (11th Cir. 1991).
“Thus, although the undersigned is aware that the threshold for determining
whether discovery is relevant is relatively low, the ‘proponent of a motion to compel
discovery [still] bears the initial burden of proving that the information sought is
relevant.’” Diamond State Ins. Co. v. His House, Inc., No. 10-20039-CIV, 2011 WL
146837, *5 (S.D. Fla. Jan. 18, 2011) (quoting Peacock v. Merrill, No CA 05-0377-BH-C,
2008 WL 176375, *8 (S.D. Ala. Jan.17, 2008)). Here, Defendants have not met that
burden with respect to this request. The Court does not believe information regarding

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the sale or lease of the jets to any other individual/entity is relevant to the instant
litigation and therefore, will deny Defendants’ Motion to Compel with respect to Request
No. 5.
Requests for Production Nos. 8 and 9
These requests seek all billing records, credit records, underwriting records,
investigation records, due diligence records, background records, closing files, and all
other documents and communications related to (1) all customers, purchasers, lessees,
or users of Plaintiffs’ jets and (2) the decision by Plaintiffs to sell, lease, or allow the use
of its jets to its customers. Defendants argue the information sought in these requests
is relevant because Plaintiffs’ claims involve the use of aircraft under Plaintiffs’ lease
program. Further, Defendants believe the documents requested will show whether
Plaintiffs were diligent when investigating a potential client’s background or
creditworthiness. Plaintiffs respond that they have produced responsive documents
relating to J.Ward’s account. With respect to the documents regarding all other
customers, Plaintiffs argue that the information is voluminous and not relevant. The
Court agrees.
Witnesses for Plaintiffs have already testified that Plaintiffs did not, as a general
practice, conduct formal due diligence. Requiring Plaintiffs to produce billing records
and communications to all of its clients is overly burdensome. Perhaps Defendants
should serve an interrogatory asking if there have been any instances in which Plaintiffs
have engaged in due diligence. It appears this would be a much less burdensome and

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more productive way to gain the information they seek. Accordingly, the Court will deny
Defendants’ Motion to Compel with respect to Requests Nos. 8 and 9.
Requests for Production Nos. 11 and 12
These requests seek information regarding other lawsuits in which Plaintiffs
alleged alter ego liability or sought to collect money for aircraft services. Defendants
argue the information is relevant because alter ego liability is an uncommon cause of
action. As such, Defendants believe information regarding other alter ego cases may
shed light on Plaintiffs’ debt collection practices. Similarly, Defendants argue
information regarding any other cases in which Plaintiffs sued a customer may show
that Plaintiffs routinely sue individuals who are not parties to contracts with them in an
attempt to reach entities with “deeper pockets.”
The Court does not believe information regarding other lawsuits in which
Plaintiffs alleged alter ego liability or in which Plaintiffs’ sued for monies owed will lead
to the discovery of admissible evidence. As such, the Court will not require Plaintiffs to
respond to either Requests Nos. 11 or 12.
Requests for Production Nos. 15 and 16
These requests seek information regarding any instance in which Plaintiffs
entered into a contract with a business entity without a personal guarantee and/or in
which Plaintiffs were or are in litigation with such entity. Defendants believe this
information will show whether it was a common practice of Plaintiffs to enter into
agreements with potential clients without the requirement of a personal guarantor.
Defendants believe this will support their claim that this litigation is simply “an after-the-

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fact back and fill effort by Plaintiffs to impose liability against parties with whom it could
have contracted, but chose not to.” (Doc. 116, p.15). Plaintiffs respond that they do not
have a practice of requiring a personal guarantee when entering into contracts. As
such, responding to this request would require the production of every contract and
communication in Plaintiffs’ possession. Considering the limited relevance, if any exists,
in these documents, the Court will not require Plaintiffs to respond to Request No. 15.
As for information regarding other litigation, the Court does not see the
relevance. Defendants claim the information will help show whether Plaintiffs routinely
name individuals and entities who are not parties to an agreement with them as
defendants in lawsuits. Such information is not relevant to the issues in the present
litigation and therefore, the Court will not require Plaintiffs to respond to Request No. 16.
Request for Production No. 17
This request seeks all flight activity reports for Plaintiffs’ aircraft including all
documentation that every person flying in the aircraft had the contractual right to do so.
Defendants argue this information is relevant because Plaintiffs’ allege Defendants’ use
of the aircraft was improper. Specifically, Defendants believe this information will be
relevant to Plaintiffs’ unjust enrichment claims. According to Defendants, if Defendants’
use of a plane did not cause any disruption in Plaintiffs’ ability to provide aircraft to other
clients, Plaintiffs’ unjust enrichment claim would be “significantly diminished.”
As Plaintiffs point out, their unjust enrichment claim is premised on Sleiman’s
“knowing and accepting a benefit under circumstances that make it inequitable for the
party to retain such benefit without payment of the value.” (Doc. 117, p.13).

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Accordingly, information regarding other clients’ flights is not relevant to whether
Sleiman was unjustly enriched by using Plaintiffs’ aircraft. Therefore, the Court will
again deny Defendants’ Motion to Compel insofar as it relates to Request No. 17.
Request for Production No. 19
This request asks for all collection notices or collection letters to all customers,
purchasers, lessees, or users of NetJets. Defendants take the position that this request
seeks information relevant to Plaintiffs’ collection practices. Defendants contend this
request seeks information regarding three of Plaintiffs’ practices: (1) attempts to impose
liability on non-parties to a contract, (2) limitations on an owner’s use of the jets, and (3)
permitting or restricting a delinquent owner from using the jets. Again, the Court does
not believe the collection notices or letters are relevant to the issues in the instant
litigation and will not require Plaintiffs to provide them.
Request for Production No. 20
In this request, Defendants ask for Plaintiffs’ organizational charts since its
inception. Defendants failed to provide any argument regarding the relevance of this
information and as the Court can discern none, Plaintiffs need not respond to this
request.
Request for Production No. 23
This request seeks documents related to lawsuits in which Plaintiffs were a party
since their inception. Again, Defendants have failed to show how this information is
relevant to the issues in the instant litigation and therefore, their request for an Order
compelling Plaintiffs to produce it is denied.
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Request for Production No. 37
This request seeks information showing the relationship between the
compensation paid to any of Plaintiffs’ employees and the amounts collected by
Plaintiffs from its customers. Defendants claim this information will show whether
Plaintiffs’ employees are diligent in their determination of whether a potential client can
afford payments under the terms of the agreement or whether the employees are
motivated by personal economic gain. Plaintiffs respond by noting Defendants are
aware that Plaintiffs’ employees are not compensated based upon the amounts
collected by Plaintiffs. Therefore, the Court directs Plaintiffs to respond to this request
by indicating there are no such documents.
Request for Production No. 44
This request seeks all operative documents referred to in the contracts entered
into by the parties. Plaintiffs respond that all such documents are attached to the
Second Amended Complaint. Plaintiffs shall revise their response to this request to so
indicate.
Request for Production No. 47
In this request, Defendants seek information regarding Plaintiffs’ practices and
procedures for: (1) determining the creditworthiness of a potential client, (2) determining
when personal guarantees would be required, (3) reviewing and evaluating prospective
clients, and (4) deciding whether Plaintiffs would enter into a contract with a potential
client. This request is duplicative of numerous other requests and for reasons already

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noted in this Order, the Court will deny Defendants’ Motion to Compel as it relates to
this request.
Request for Production No. 48
This request seeks information showing all revenues collected or accrued by
Plaintiffs surrounding their aircraft from June 20, 2006 through the present. Defendants
claim they need this information in order to determine Plaintiffs’ damages. Specifically,
Defendants argue the information requested will show the amount paid by J.Ward and
the amount paid by other parties who used the same aircraft. Further, Defendants
believe the documents will show whether Plaintiffs took any steps to mitigate their
damages. Plaintiffs respond they have already provided Defendants with documents
showing the amounts paid against the balance of the J.Ward account and documents
showing how they mitigated their damages by re-purchasing the 6.25% interest in one
jet and terminating the lease agreement on the other. Plaintiffs note that the information
on all revenues collected by Plaintiffs is not relevant and would be extremely
burdensome for Plaintiffs to collect. The Court agrees that Plaintiffs have already
produced relevant information and they will not be required to respond further to this
request.
Interrogatory No. 4
This interrogatory asks for a calculation of Plaintiffs’ damages claimed against
Sleiman. Plaintiffs objected to this interrogatory on the basis that it sought protected
work product. Plaintiffs further note that at the time they prepared this response, in
March 2011, Sleiman had not provided any information regarding his flights and

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therefore, Plaintiffs could not respond to the interrogatory. It is unclear whether Sleiman
has since provided that information. In any event, Plaintiffs have failed to substantiate
their claim of work product. “Their mere conclusory statements do not suffice.” Riley v.
U.S., No. 11-2244-EFM-DJW, 2012 WL 1231830, *6 (D. Kan. Apr. 12, 2012) (overruling
work product objections where plaintiffs failed to meet their burden of showing that
interrogatory seeking method of calculating damages was protected work product).
Accordingly, Plaintiffs objections on the basis of work product are overruled and if they
are in possession of the information regarding Sleiman’s use of the plane, they are
directed to revise their response to this interrogatory.
Interrogatory No. 7
This interrogatory seeks the identities of all of Plaintiffs’ customers during the
years 2006 and 2007. Defendants argue this request seeks relevant information
because it will show that they were not Plaintiffs’ customers in 2006 and 2007. The
Court agrees with Plaintiffs that this request is bordering on ridiculous. There is no
question that Defendants were not Plaintiffs’ customers and Plaintiffs do not make such
a claim. Moreover, if Defendants are determined to have Plaintiffs make such an
admission, it would be much more efficient to serve Plaintiffs with a request for
admissions instead of asking them to identify all of their customers to show Defendants
were not customers.

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Accordingly, after due consideration, it is
ORDERED:
Defendants’ Motion to Compel (Doc. 116) is GRANTED in part and DENIED in
part as provided in the body of this Order. Plaintiffs shall provide their amended
responses to the discovery requests no later than Friday, June 1, 2012.1
DONE AND ORDERED in Chambers in Jacksonville, Florida this

16th

day of

May, 2012.

MONTE C. RICHARDSON
UNITED STATES MAGISTRATE JUDGE
Copies to:
Counsel of Record

1

In their Motion and Response, the parties each ask for sanctions. While the Court has
primarily denied this Motion, it is requiring Plaintiffs to amend their response to at least three
requests. Additionally, Defendants had reasonable grounds for their belief that some of the
requested documents were relevant. Accordingly, the Court will not award sanctions at this time.
However, the Court is concerned with the apparent failure of counsel for Defendants to properly
confer with opposing counsel prior to filing the instant motion. It appears that most of the issues
raised in the instant motion could have and should have been resolved by the parties without
involving the Court. Additionally, the Court is concerned with the two remaining motions to compel
filed by the parties. Counsel should note that future failures to properly confer will result in the
offending motion being either stricken or denied and sanctions being imposed on the attorney filing
the motion.
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