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

Filing 133

ORDER denying 118 Motion for sanctions; granting in part and denying in part 119 Motion to compel; and denying 123 Motion to compel. Signed by Magistrate Judge Monte C. Richardson on 6/20/2012. (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 Plaintiffs’ Motion for Sanctions (Doc. 118)
and Motion to Compel (Doc. 119) filed May 4, 2012 as well as Defendants’ Amended
Motion to Compel and for Sanctions (Doc. 123) filed May 14, 2012. Defendants filed
responses in opposition to Plaintiffs’ motions on May 20 and 25, 2012 (Docs. 128 and
130) and Plaintiffs filed a response in opposition to Defendants’ motion on May 31, 2012
(Doc. 131). Accordingly, these matters are 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
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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
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).
Discovery in this case has been extremely contentious. The instant motions are
simply the latest examples of what has become a pattern. It appears neither side is
particularly interested in resolving any dispute without Court intervention. The
undersigned certainly hopes this pattern will change.
II. ANALYSIS
The Court will first address Plaintiff’s Motion to Compel (Doc. 119) and then will
address the parties’ motions for sanctions1 (Docs. 118 and 123).
A.

Plaintiff’s Motion to Compel (Doc. 119)
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

1

Although Defendants’ motion is titled a motion to compel and for sanctions, it is in reality,
simply a motion for sanctions.
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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
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 matter, Plaintiffs contend both PSDG and Sleiman have failed to
properly respond to numerous discovery requests. The Court will first address the
requests directed to Sleiman individually and will then turn to the requests directed to
PSDG.
1.

Discovery Requests Directed to Sleiman

In their Motion, Plaintiffs claim Sleiman failed to properly respond to five different
discovery requests. The Court will address each of these requests.
a.

Interrogatory No. 2

This request seeks information regarding all businesses Sleiman had an
ownership interest in at any time since January 1, 2005. It is not clear why Sleiman
objected to this interrogatory as both sides simply quote the response which states that
Sleiman does not waive previously asserted objections. Sleiman went on to provide

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information regarding businesses in which he had an interest since he left Sleiman
Enterprises in November 2005. Sleiman does not provide any explanation as to why he
failed to provide the information regarding businesses in which he had an ownership
interest since January 1, 2005 and as the Court believes Plaintiffs have shown such
information relevant, Sleiman is directed to supplement his response to this
interrogatory.
b.

Interrogatory No. 4

This interrogatory seeks information regarding all real estate in which Sleiman
had an ownership interest since January 1, 2005 from which Jennifer Ward or J Ward
received any form of compensation. Sleiman’s response simply references his
response to Interrogatory No. 2. Again, Sleiman has failed to identify any reason for an
objection to this interrogatory other than to state that he has provided responsive
documents. The Court does not agree that such is sufficient and therefore, directs
Sleiman to file a revised response to this interrogatory which provides a complete
response. If Sleiman intends to utilize documents to respond to this request, he shall
identify all responsive documents by their Bates numbers.
c.

Interrogatories Nos. 14 and 15

These interrogatories ask Sleiman to identify all financial institutions where he
has had checking, savings, investment, or any other financial account at any time from
January 1, 2005 to December 31, 2007, including the account numbers and the dates
the accounts were opened and closed. It appears Sleiman objects to these requests as
seeking an overly broad range of personal financial information irrespective of any

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relationship to J Ward. Plaintiffs argue the information in these interrogatories is
relevant because the records produced thus far show millions of dollars being
withdrawn from J Ward accounts through “unidentified internal bank transfers, wire
transfers, and miscellaneous debits.” (Doc. 119, p.11). They believe the information
sought through these interrogatories will show Sleiman was the recipient of at least
some of these transactions.
Sleiman believes there is a less intrusive way for Plaintiffs to obtain the
information they are seeking. Namely, Sleiman proposes Plaintiffs identify the specific
transactions they are seeking information about and “the parties could then pursue
records related to those particular transactions as opposed to years of Mr. Sleiman’s
personal banking records . . .” (Doc. 128, p.11). While that may be a persuasive
argument if Plaintiffs were seeking all of Sleiman’s account statements, these two
interrogatories simply ask Sleiman to identify the account numbers and dates the
accounts were opened and closed. The Court believes this information is relevant,
would not be unduly burdensome for Sleiman to produce, and is not overly intrusive.
Accordingly, Sleiman is directed to file revised responses to these interrogatories.
d.

Interrogatory No. 21

This interrogatory seeks the monthly and year-end account statements from any
financial institution in which Sleiman had an interest since January 1, 2005 and which
received funds from or transferred funds to Jennifer Ward or J Ward. Sleiman objects
to this interrogatory as being harassing and overly broad. As noted above, counsel for
Sleiman proposes that rather than seeking the account statements, Plaintiff should

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“identify the specific transactions they claim involved Mr. Sleiman, if any, and the parties
could then pursue records related to those particular transactions as opposed to years
of Mr. Sleiman’s personal banking records (which would obviously include countless
irrelevant transactions).” (Doc. 128, p.11). Moreover, Sleiman states:
The Plaintiffs[’] approach is to seek the production of a
potentially large amount of information (i.e., two years of all
of his banking and investment records) for the stated goal of
hopefully identifying information related to a finite number of
transactions Plaintiffs have the ability to identify. The
approach is unduly harassing and not the optimal method to
obtain what Plaintiffs seek to obtain. For example, if the
Plaintiffs have identified a withdrawal from a J Ward bank
account in the amount of $1,000, for which Plaintiffs suggest
the “ultimate beneficiary” is unidentified, it would make the
most sense for Plaintiffs to identify the transaction and serve
discovery tailored at the particular transaction or even
depose the Defendants regarding same.
(Doc. 128, p.12).
The Court agrees that the time frame for this interrogatory is too broad. Plaintiffs
seek account statements from January 1, 2005 to the present. Plaintiffs have provided
no information to support such a broad request. The relevant period appears to be from
January 1, 2005 through December 31, 2007. As for Sleiman’s suggestion that
Plaintiffs identify the particular transaction and then seek information regarding it rather
than all of Sleiman’s account information, the Court finds some appeal in it. However,
the Court is concerned that based on the apparent inability of counsel to cooperate in
discovery, as demonstrated by the sheer number of motions to compel and motions for
sanctions filed as well as the vitriolic and frankly, unprofessional, language used in
some of these motions, it will simply be inviting another motion to compel. Despite this

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concern, the Court will direct counsel for Plaintiffs to identify the dates of the particular
transactions about which it seeks information. Sleiman shall, within fourteen days of
receiving this information from Plaintiffs’ counsel, provide any account statements
covering the particular dates. If an account only provides a yearly statement, Sleiman
shall provide the yearly statement(s) for the specific dates provided by Plaintiffs. In lieu
of this, Sleiman is free to respond to the interrogatory as presently worded, with the
above-mentioned alteration of the time period, from January 1, 2005 to December 31,
2007.
2.

Discovery Requests Directed to PSDG

Plaintiffs claim PSDG failed to properly respond to five requests for production of
documents. The Court will address each of these requests.
a.

Request for Production No. 1

In this request, Plaintiffs seek all periodic financial statements for PSDG since
January 1, 2005. Plaintiffs argue this information is relevant because Ward testified
PSDG compensated her for her role as President of PSDG, however, “PSDG has
admitted no compensation has been given to J Ward and that PSDG has no
employment records showing compensation paid to Jennifer Ward.” (Doc. 119, p.15).
Additionally, Plaintiffs note that PSDG “has admitted it has no contractual relationships
with any brokers or real estate agents, nor has it made any payments to real estate
agents or brokers since January 1, 2005.” Id. The Plaintiffs simply conclude that the
financial statements will help show that PSDG, Sleiman, and Ward improperly used J

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Ward for their personal benefit. The Court fails to see the connection and therefore,
questions the relevance of the financial statements
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, Plaintiffs have not met that
burden with respect to this request. Plaintiffs have simply failed to show how the
financial statements of PSDG for over seven years will lead to the discovery of

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admissible evidence in this case. Accordingly, the Court will deny Plaintiffs’ Motion to
Compel with respect to Request No. 1.
b.

Requests for Production Nos. 6, 7, and 8

These requests seek: 1) the monthly and year-end statements from any financial
institution where PSDG had an account from January 1, 2005, which transferred money
to and/or received funds from Ward or J Ward; 2) all canceled checks from any of
PSDG’s accounts since January 1, 2005 that relate to or were for the benefit of Ward or
J Ward; and 3) all documents relating to any wire transfers from any of PSDG’s
accounts since January 1, 2005 that relate to or were for the benefit of Ward or J Ward.
PSDG responds to each of these requests by asking Plaintiffs to identify the particular
transactions, checks, or wire transfers about which they are concerned. Plaintiffs
respond to Defendants’ suggestion by arguing that they should not be required to only
seek information related to records they already have and “assume that no other
transactions exist.” (Doc. 119, p.16). Plaintiffs also point out that they learned Sleiman
had companies in which he had an ownership interest make payments to a third party
vendor (Ward’s interior designer) and reconciled those payments as compensation paid
to J Ward. PSDG does not respond to this assertion by Plaintiffs.
Based on this assertion, the Court believes the information sought by Plaintiffs is
relevant and PSDG should be required to respond to the requests, with the exception
that it need only produce responsive documents from January 1, 2005 to December 31,
2007.

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c.

Request for Production No. 12

This request seeks PSDG’s federal, state, and local income tax returns for 2005
through 2008. Plaintiffs argue this information is relevant because Ward was
responsible for commercial leasing, land acquisitions, marketing, sales, development,
and management for PSDG; yet neither J Ward nor any other real estate broker
received compensation since January 1, 2005. Plaintiffs believe the four years of
income tax returns will lead to information showing that PSDG improperly used J Ward
as a scheme to benefit Sleiman and Ward. Once again, the Court is not convinced
Plaintiffs have shown that the requested tax returns are relevant. Plaintiffs have simply
not made the connection between the lack of compensation to Ward and PSDG
improperly using J Ward as a method to benefit Sleiman and Ward. As such, the Court
will deny Plaintiffs’ Motion to Compel insofar as it relates to this request.2
B.

The Parties’ Motions for Sanctions (Docs. 118 and 123)
On May 4, 2012, Plaintiffs filed a motion for sanctions against Sleiman and

PSDG (Doc. 118). Defendants, Sleiman and PSDG, filed their own motion for sanctions
on May 14, 2012 (Doc. 123). Plaintiffs’ motion seeks sanctions “based upon
Defendants’ deceptive behavior throughout the discovery process and blatant abuse of
the judicial process.” (Doc. 118, p.1). Plaintiffs argue Defendants refused to properly
respond to their discovery requests, causing Plaintiffs to have to file motions to compel.
Plaintiffs point out Defendants objected to some of their requests on the basis that it

2

Plaintiffs request sanctions for having to file the Motion to compel. The undersigned does
not believe sanctions are appropriate in this instance and therefore, will not award them.
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would be harmful to Defendants to produce responsive documents, clearly implying
responsive documents existed. Additionally, Plaintiffs note counsel for Defendants
sought an extension of time in which to respond to the discovery requests, taking the
position that he needed additional time to address the voluminous amount of
documents. However, when Defendants actually responded to the discovery requests,
they produced a paltry 32 pages of documents and responded to most of the requests
with one word: “none.” Plaintiffs go on to call Sleiman and Ward “liars who simply do
not believe the rule apply to them.” (Doc. 118, p.6).
Defendants responded to this motion and counsel explained he was surprised by
the Motion for Sanctions. Counsel asserted he had not been aware of counsel for
Plaintiffs’ concern with the discovery responses as no one attempted to confer with him
prior to filing the motion. Counsel for Defendants further explained he was required to
consider a voluminous amount of information in order to identify whether responsive
documents existed. The fact that out of all of those documents, only a few or “none”
were responsive does not necessarily mean he or his clients lied.
The Court agrees with Defendant and does not believe sanctions are warranted
at this time. The Court directs counsel for both sides to refrain from filing any additional
motions for sanctions. At the conclusion of this matter, the Court will be in a better
position to consider the issue of sanctions and therefore, directs both sides to wait until
that time to seek sanctions.
As for Defendants’ motion for sanctions, Defendants ask the court to impose
sanctions on Plaintiffs “for their serious discovery abuse.” (Doc. 123, p.2). Defendants

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argue Plaintiffs produced over fifty pages of documents that had been “altered.” In fact,
Plaintiffs produced several documents that had been redacted. While the Court agrees
with Defendants that it is peculiar for documents, which do not appear to contain
confidential or sensitive information, to be redacted; the Court sees no harm in Plaintiffs’
conduct. It is clear Plaintiffs eventually produced unredacted versions of the documents
as Defendants attach same to the instant Motion. Although Defendants vaguely
contend there may be more documents that have been redacted, Defendants have
done nothing more than speculate. Indeed, Plaintiffs assert they have provided
Defendants with unredacted copies of all of the documents.
Additionally, Defendants contend they were prejudiced by Plaintiffs’ conduct in
that they were not able to question Plaintiffs’ corporate representative about the
redacted documents. However, the only specific example provided by Defendants was
that they questioned Mr. Shedlock regarding a communication on June 7, 2007,
however, because counsel for Defendants did not have the redacted portion of
Document A, he could not ask Mr. Shedlock about it. Plaintiffs respond that Defendants
will still have two more opportunities to question Mr. Shedlock, as he will be the
corporate representative for NetJets Aviation, Inc. and will also be available to be
deposed as a fact witness. As such, the Court does not believe Defendants have been
prejudiced by the failure of Plaintiffs to produce unredacted copies at an earlier time.
Finally, Defendants mention an inappropriate privilege log and argue that it was
untimely, however, Defendants have not asked the Court to do anything with respect to
it. Plaintiffs respond that the privilege log was not untimely as they produced it at the

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same time they provided all of the unredacted documents. In any event, the Court does
not believe, based on the circumstances of this case, that it would be appropriate to find
Plaintiffs waived the attorney-client privilege.
In closing, the Court will again express its concern that counsel for both parties
appear unwilling or unable to practice discovery with the “spirit of cooperation and
civility” expected of counsel in this district. The Court is aware that Plaintiffs believe
another motion to compel will be necessary with respect to discovery served on Jennifer
Ward. The Court urges counsel for both sides to confer and to make every effort to
resolve their disputes without further Court intervention. Counsel are hereby notified
that the Court will sanction any party or their attorney who takes an unreasonable or
unsupportable position with respect to this discovery.
Accordingly, after due consideration, it is
ORDERED:
1.

Plaintiffs’ Motion to Compel (Doc. 119) is GRANTED in part and DENIED

in part as provided in the body of this Order. Defendants shall provide their amended
responses to the discovery requests no later than Friday, June 29, 2012.3
2.

Plaintiffs’ Motion for Sanctions (Doc. 118) is DENIED.

3.

Defendants’ Amended Motion to Compel and for Sanctions (Doc. 123) is

DENIED.

3

This deadline obviously does not apply to Sleiman’s response to Interrogatory No. 21.
His response to this interrogatory is due fourteen days after receipt of the dates from Plaintiffs.
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DONE AND ORDERED in Chambers in Jacksonville, Florida this
June, 2012.

Copies to:
Counsel of Record

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20th

day of