Hancock Bank v. Hill Street, L.L.C. et al

Filing 91

ORDER granting in part and denying in part 74 Motion to Compel. Signed by Magistrate Judge Monte C. Richardson on 12/24/2013. (MOH)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
JACKSONVILLE DIVISION
HANCOCK BANK, a Mississippi
banking corporation,
Plaintiff,
vs.

Case No: 3:13-cv-71-J-25MCR

HILL STREET, L.L.C., a Florida limited
liability company, et al.,
Defendants.
/
ORDER
THIS CAUSE is before the Court on Defendant, Hill Street L.L.C.’s Motion to
Compel (Doc. 74) filed December 2, 2013. In the Motion, Defendant requests an Order
compelling Plaintiff to produce documents responsive to its requests for production of
documents. Plaintiff filed a response in opposition to this motion (Doc. 82) on
December 12, 2013. 1 Accordingly, the matter is now ripe for judicial review.
I. BACKGROUND
On January 17, 2013, Plaintiff filed the Complaint in this case against a borrower,
Hill Street, L.L.C., seeking to recover on a defaulted consolidated note and to foreclose
mortgages on properties used as security for the consolidated note. (Doc.1).
Additionally, Plaintiff sued numerous other defendants who executed guaranties on the

Plaintiff also filed a request for oral argument on the instant motion. (Doc. 76). After
reviewing the parties’ submissions, the Court does not believe oral argument is necessary and
will therefore, deny Plaintiff’s request.

1

consolidated note and seeks to enforce those guaranties due to Hill Street’s default.
Id. 2
On May 30, 2013, Defendant, Hill Street, served Plaintiff with its first requests for
production of documents. Defendant contends Plaintiff failed to produce all responsive
documents. Specifically, Defendant took the deposition of David McCranie, a former
special assets officer for Plaintiff and “the primary point of contact on behalf of [Plaintiff]
with the borrower and guarantors from approximately December of 2010 through
January of 2013.” (Doc. 74, p.2). During his deposition, Mr. McCranie testified about
memoranda he prepared regarding the Loan and emails he sent to various employees
of Plaintiff regarding the Loan. Mr. McCranie also testified that he maintained a hard
copy “working file” on the Loan, which was in his office when his employment with
Plaintiff was terminated in January of 2013. Defendant argues that Plaintiff has failed to
produce the emails, memoranda, and files referenced by Mr. McCranie. Additionally,
Defendant contends Plaintiff improperly removed documents from its privilege log.
Finally, Defendant takes the position that Plaintiff is improperly withholding documents
on the basis of confidentiality and work product.
II. ANALYSIS
Motions to compel disclosures and other discovery under Rule 37(a) are
committed to the sound discretion of the trial court. Commercial Union Insurance 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.

On August 6, 2013, Plaintiff filed an Amended Complaint (Doc. 45) adding additional
guarantors as new defendants.

2

-2-

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.
See United States v. Proctor & Gamble Co., 356 U.S. 677, 682, 78 S.Ct. 983, 986-87
(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.
As noted above, Defendant contends Plaintiff is failing to produce documents
referenced by Mr. McCranie during his deposition. Additionally, Defendant believes
Plaintiff improperly removed responsive documents from its privilege log and is
improperly withholding documents on the basis of confidentiality and work product. The
Court will examine each of these contentions.
A. Documents referenced by Mr. McCranie
In the instant case, Defendant contends Plaintiff failed to properly produce the
relevant, responsive documents about which Mr. McCranie testified. Specifically,
Defendant takes the position that Plaintiff is improperly withholding emails, memos, and
entries to Plaintiff’s KO system. 3 Defendant points to Mr. McCranie’s testimony that he
sent and received at least one hundred emails to and from his supervisor, Bill Wilson,
regarding the Loan. Plaintiff responds that it produced all emails in its possession.
Plaintiff points out that Mr. McCranie also testified he routinely deleted emails from his
Outlook account because it became too full. The Court will accept counsel for Plaintiff’s

3

The KO system is an “internal system that allowed someone to make short notes on the bank’s dealings
with the borrower.” (Doc. 74, p.6).

-3-

representations that Plaintiff is not withholding any relevant, non-privileged emails. It is
certainly possible that the emails to which Mr. McCranie was referring were deleted.
With respect to memoranda, Defendant also believes Plaintiff is improperly
withholding memos and reports regarding the Loan. Plaintiff points out that Mr.
McCranie’s testimony regarding his memos was not entirely clear as to how many
memos he prepared. On the one hand, Mr. McCranie testified that he was meticulous
about keeping files up to date, however, he also failed to recall if he prepared memos
after many meetings he had with the borrowers. Plaintiff represents that it has
produced all but three of the memoranda it was able to locate prepared by Mr.
McCranie. The other three were withheld on the basis of privilege or relevance.
Plaintiff also represents that it was not able to locate a hard copy working file for Mr.
McCranie. Once again, the Court believes Defendant has failed to demonstrate that
Plaintiff is improperly withholding documents. Plaintiff provided an affidavit from Renee
Mashburn, Plaintiff’s Loss Share Assets Assistant, who explained the steps she took to
gather information responsive to the discovery requests. The Court is simply not
convinced Plaintiff is failing to turn over the materials referenced by Mr. McCranie.
Finally, with respect to the KO Report, Defendant notes that Plaintiff produced
the KO Report for the Loan, however, there were no entries for the period of time from
July 2011 to July 2012. Although Mr. McCranie did not specifically recall making an
entry during that time, he believed it was unlikely that he did not because he had been
“pretty religious about using KO.” (Doc. 74, p.6). Plaintiff responds that the complete
KO Report related to the Loan has been produced. Further, Plaintiff asserts that
following Mr. McCranie’s deposition, it conducted an investigation to determine whether

-4-

any entries to the KO Report had been deleted or were otherwise missing. Plaintiff
determined that no entries had been deleted. Indeed, Plaintiff learned from the vendor
of the KO system that it is not possible to delete entries. Accordingly, the Court is again
unconvinced that Plaintiff is improperly withholding any KO Report entries.
B. Removal of Documents from Privilege Log
Defendant takes the position that Plaintiff improperly removed several documents
from the privilege log. Plaintiff did so following the Court’s October 22, 2013 Order
(Doc. 68) granting in part and denying in part Defendant’s first motion to compel. In that
Order, the Court upheld several of Plaintiff’s objections to Defendant’s discovery
requests on the grounds that they did not seek relevant information. Based on this
ruling, Plaintiff removed several documents from its privilege log as they were not
relevant. Defendant takes the position that even though the Court ruled certain of its
requests sought irrelevant information, Defendant is still entitled to many of the
documents under a more general discovery request. Specifically, Defendant points to
its Request for Production No. 10 which states:
Please produce each and every non-privileged document
that constitutes, evidences, refers, or relates to any
correspondence or other communication between Plaintiff
and any Person not a party to this lawsuit regarding or
concerning the Loan and/or the subject matter of this
litigation, including but not limited to any notes, minutes,
memoranda recording meetings or communications
regarding valuation of the Property.
(Doc. 74, p.21). Plaintiff responds by pointing out that documents responsive to a
request found to be seeking irrelevant information are not automatically deemed
relevant simply because they are responsive to a more general request. (Doc. 82,
p.19). The Court agrees.

-5-

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)). “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-cv-20039, 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, Defendant has not met that
burden with respect to the documents it alleges Plaintiff improperly removed from the
privilege log. All Defendant states is that Plaintiff “improperly removed entries from its
log that are responsive to Defendant’s Documents Requests” (Doc. 74, p.14) and points
to an extremely general, broad request. This is not enough. Accordingly, the Court will
deny Defendant’s Motion to Compel insofar as Defendant argues Plaintiff improperly
removed items from the privilege log.
C. Confidential Documents
Next, Defendant argues Plaintiff improperly withheld eighty documents on the
basis that they were confidential and/or proprietary. Plaintiff responds that it is only
withholding seven documents on the grounds of confidentiality and these documents

-6-

are tax returns of three individuals. 4 Plaintiff provides no legal authority to support its
failure to produce the documents and instead states that it is willing to produce the tax
returns “subsequent to the execution of a Confidentiality Agreement acceptable to all
parties and with the permission of any affected individuals or entities not a party to the
Confidentiality Agreement.” (Doc. 82, p.15). The Court will direct Plaintiff to produce
the tax returns on or before Wednesday, January 8, 2014. The parties are free to
agree to a confidentiality agreement without further Court intervention, however, failure
to agree to the terms of a confidentiality agreement will not excuse failure to produce
the documents by the date noted. 5
D. Work Product Doctrine
Defendant next complains that Plaintiff is improperly withholding business
records based on the work product doctrine. Specifically, Defendant argues Plaintiff
has withheld eighty-three documents on the basis of work product. Again, Defendant
includes documents removed from the second amended privilege log and the Court will
not address those. As for the remaining ten documents, Plaintiff asserts it has
produced two of them and that the remaining eight are indeed work product and/or
protected by the attorney-client privilege. 6 As Defendant has not contested the
attorney-client privilege assertion, the Court will limit its examination to the eight
documents being withheld on the basis of the work product doctrine.

4

The remaining seventy-three documents were removed from the privilege log as being irrelevant. As
the Court ruled Defendant failed to meet its burden to show these documents were relevant, the Court will
not discuss them further.

5 Counsel and the parties should be aware that this deadline does not grant anyone license to behave in
an unreasonable fashion. Indeed, any party or counsel doing so will face sanctions.
6

Plaintiff produced documents 37 and 119 and designated documents 80 and 86 as being protected by
the attorney-client privilege in addition to the work product doctrine.

-7-

“The work product doctrine was created to allow attorneys to make careful and
thoughtful preparation for litigation, without fear that their adversaries will unfairly benefit
from their efforts.” Bridgewater v. Carnival Corp., 286 F.R.D. 636, 639 (S.D. Fla. 2011)
(citing Hickman v. Taylor, 329 U.S. 495, 510–11, 67 S.Ct. 385 (1947)). The doctrine
was first recognized by the Supreme Court in Hickman v. Taylor and is now also
codified in Rule 23(b) of the Federal Rules of Civil Procedure. It offers qualified
protection for materials that are: (1) documents or tangible things, (2) prepared in
anticipation of litigation, (3) by or for a party, or for his representatives. Bridgewater,
286 F.R.D. at 639 (citations omitted).
In the instant case, Plaintiff asserts that documents numbered 116, 118, 130,
131, 134, and 138 are internal communications between Plaintiff’s employees occurring
between October 24, 2012 and December 31, 2012, that relate to the filing of the
foreclosure action and the strategy to be pursued in that litigation. (Doc. 82, pp. 16-17).
Additionally, Plaintiff is withholding documents numbered 44 and 47, which appear to be
another internal correspondence and an internal memorandum.
“The party claiming a privilege has the burden of proving its applicability.”
Bridgewater, 286 F.R.D. at 637. Moreover, as the court in Bridgewater noted:
“[a] failure of proof as to any element causes the claim of
privilege to fail.” North Carolina Elec. Membership Corp. v.
Carolina Power & Light Co., 110 F.R.D. 511, 515
(M.D.N.C.1986). “That burden is not, of course, discharged
by mere conclusory or ipse dixit assertions, for any such rule
would foreclose meaningful inquiry into the existence of the
relationship, and any spurious claims could never be
exposed.” In re Bonanno, 344 F.2d 830, 833 (2nd Cir.
1965). The party claiming the privilege must provide the
court with underlying facts demonstrating the existence of
the privilege, which may be accomplished by affidavit.
United States v. Osborn, 561 F.2d 1334, 1339 (9th Cir.

-8-

1977). “Unless the affidavit is precise to bring the document
within the rule, the Court has no basis on which to weigh the
applicability of the claim of privilege. An improperly asserted
claim of privilege is no claim of privilege at all.” International
Paper Co. v. Fibreboard Corp., 63 F.R.D. 88, 94 (D. Del.
1974). “[S]ubmitting a batch of documents to the Court in
camera [does not] provide an adequate or suitable substitute
because the Court is often without information of what the
document concerns or how it came into being or other
relevant information which would enable it to determine
whether the documents are privileged.” Id.
This burden, to sustain a claim of privilege, is heavy because
privileges are “not lightly created nor expansively construed,
for they are in derogation of the search for the truth.” United
States v. Nixon, 418 U.S. 683, 710, 94 S.Ct. 3090 (1974);
see also United States v. Bryan, 339 U.S. 323, 331, 70 S.Ct.
724 (1950) (privileges contravene the fundamental principle
that “the public ... has a right to every man's evidence”).
They must be strictly construed and accepted “only to the
very limited extent that permitting a refusal to testify or
excluding relevant evidence has a public good transcending
the normally predominant principle of utilizing all rational
means for ascertaining truth.” Trammel v. United States, 445
U.S. 40, 50, 100 S.Ct. 906 (quoting Elkins v. United States,
364 U.S. 206, 234, 80 S.Ct. 1437 (1960)).
Bridgewater, 286 F.R.D. at 638-39.
Applying these principals to the instant case leads the undersigned to find that
Plaintiff has not satisfied its burden of demonstrating the work product doctrine applies.
Plaintiff has simply labeled several internal communications and a memorandum as
dealing with the status of the loan and/or property, proposed forbearance, strategy in
collective action, damages in the form of payoff amounts, offer to satisfy the loans, and
strategy for litigation. However, Plaintiff has provided no facts demonstrating that these
documents were produced in anticipation of litigation. Rather, in its response to
Defendant’s motion, Plaintiff states that these documents “were plainly prepared at a
time where there was a ‘substantial likelihood that litigation would occur,’ as evidenced

-9-

by the fact that Hancock was corresponding at that same time with its outside counsel
related to the filing of this foreclosure action.” (Doc. 82, p.17).
The problem with Plaintiff’s explanation is that it assumes that the mere fact that
a document was prepared during a time period where it was likely that litigation would
occur is sufficient to warrant protection by the work product doctrine. Rather, as the
former Fifth Circuit noted:
It is admittedly difficult to reduce to a neat general formula
the relationship between preparation of a document and
possible litigation necessary to trigger the protection of the
work product doctrine. We conclude that litigation need not
necessarily be imminent, as some courts have suggested,
as long as the primary motivating purpose behind the
creation of the document was to aid in possible litigation.
United States v. Davis, 636 F.2d 1028, 1040 (5th Cir.1981) (citations omitted). 7
Accordingly, the more relevant question is: what was the primary motivating purpose
behind the creation of the document. Plaintiff has failed to show that the primary
motivating purpose behind the creation of any of the withheld documents was to
prepare or aid in possible or existing litigation. Moreover, what is more troubling to the
Court is that Plaintiff voluntarily agreed to produce documents 37 and 119, both of
which were designated as work product and had similar descriptions in the privilege log
as the documents Plaintiff continues to withhold.
Because there are only eight documents at issue, rather than have Plaintiff file a
third amended privilege log, the Court will conduct an in camera review of the
documents. To that end, Plaintiff is directed to produce the documents being withheld
on the basis of work product to the Court for an in camera review no later than

7

In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir.1981), the Eleventh Circuit adopted as
binding precedent all decisions handed down by the former Fifth Circuit before October 1, 1981.

- 10 -

Thursday, January 2, 2014. Plaintiff should also provide affidavits or other evidence to
support its position that the primary motivating purpose behind the creation of the
documents was to aid in litigation. The Court will not accept conclusory statements.
E. Additional Issues
While Defendant has requested sanctions against Plaintiff pursuant to Rule 37 of
the Federal Rules of Civil Procedure, the Court does not believe such an award is
warranted in the instant case. The Court again upheld the majority of Plaintiff’s
objections and believes Plaintiff’s objections to the discovery requests at issue in this
case were substantially justified. Accordingly, Defendant’s request for sanctions is
denied. Furthermore, to the extent Defendant seeks an extension of the discovery
deadline in order to depose individuals regarding the documents, such does not appear
necessary. If the Court orders the production of any of the documents being withheld
on the basis of the work product doctrine, it will consider whether further discovery is
warranted.
Accordingly, after due consideration, it is
ORDERED:
Defendant's Motion to Compel (Doc. 74) is GRANTED IN PART AND DENIED
IN PART as provided in the body of this Order.
DONE and ORDERED in Jacksonville, Florida this
2013.

Copies furnished to:

- 11 -

24th

day of December,

Counsel of Record

- 12 -