Jin Zhi Star Lt. LLC et al v. Ameican Zurich Insurance Company
Filing
339
AMENDED ORDER amending 338 Order on Emergency Motion to Quash. Signed by Judge Robin S. Rosenbaum on 7/13/2012. (RSR)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No. 08-61191-CIV-ROSENBAUM/SELTZER
JIN ZHI STAR LT, LLC,
a Florida corporation, and
U.S. CAPITAL/FASHION MALL, LLC,
a Florida corporation,
Plaintiffs,
v.
AMERICAN ZURICH INSURANCE CO.,
an Illinois corporation,
Defendant.
/
ORDER
This matter is before the Court on Non-parties Gregg D. Scarlett’s and Karen C. Bremer’s
Emergency Motion to Quash Subpoenas [D.E. 329]. The Court has reviewed the Non-parties’
Motion; the Responses of Plaintiffs/Counterclaim Defendants Jin Zhi Star LT, LLC; and U.S. Capital
Fashion Mall, LLC, and Defendant/Counterclaim Plaintiff American Zurich Insurance Company; the
Non-parties’ Reply; and the case file. After careful consideration, the Court now grants in part and
denies in part the Non-parties’ Motion for the reasons set forth below.
I. Background
This matter involves a dispute over insurance coverage for a mall that was damaged by
Hurricane Wilma on October 24, 2005. Following a bench trial held by the Honorable Federico
Moreno in this matter, the Eleventh Circuit dismissed the parties’ cross-appeals, holding that the
district court’s decision following the bench trial was not a final one under 28 U.S.C. § 1291, and,
thus, was not appealable. In its decision, the Eleventh Circuit noted that, among other matters, the
district court needed to allow Defendant/Counterclaim Plaintiff Zurich to present evidence in
furtherance of its affirmative defenses to coverage of Plaintiff/Counterclaim Defendant’s insurance
claim.
This Court subsequently set the matter for a bench trial beginning on July 16, 2012.
Defendant/Counterclaim Plaintiff American Zurich Insurance Company served Non-parties Gregg
D. Scarlett and Karen C. Bremer (the “Non-parties”) with subpoenas to testify at the trial. In
response, the Non-parties filed their pending Emergency Motion to Quash.
In support of their Motion, the Non-parties note that they are not parties or officers to a party
in this action. See D.E. 329 at 1. Mr. Scarlett lives in Tampa, and Mrs. Bremer, in Clearwater —
both outside this district and more than 100 miles from the Court. Id. Neither Mr. Scarlett nor Mrs.
Bremer regularly conduct business in person in Fort Lauderdale. Id. Mr. Scarlett serves as the Senior
Vice President of Operations for Outback Steakhouse. Id. As such, he is currently scheduled to be
in New York at a business meeting of company executives during the trial period. Id. at 4. According
to Mr. Scarlett, because of his position and his responsibilities of operating 770 restaurants in fortynine states, his attendance at the meeting is “critical.” Id.
For her part, Mrs. Bremer is the Vice President of Real Estate for OSI, described by Mrs.
Bremer as “one of the world’s largest casual dining companies with approximately 86,000 domestic
Team Members and more than 1,400 restaurants in 49 states, and 21 countries and territories.” Id.
at 2 n.1. Although Mrs. Bremer does not regularly conduct business in person in Fort Lauderdale,
however, Mrs. Bremer is actually scheduled to attend a bankruptcy hearing in Fort Lauderdale on the
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morning of July 16, 2012, the first day of trial in the above-captioned case. Id. at 5. As it turns out,
that hearing will be held in a courtroom on the same floor of the same courthouse where the instant
matter will be tried.
Mr. Scarlett and Mrs. Bremer urge the Court to release them from the subpoenas, noting that
they both previously testified in actions filed by Cheeseburger-South Florida, Limited Partnership,
and Bonefish/South Florida-I Limited Partnership against U.S. Capital in the Circuit Court for the
Seventeenth Judicial Circuit, in and for Broward County. Id. at 4. Those actions concerned claims
arising from each company’s restaurant leases at the Fashion Mall, which is the property that the
insurance policy at issue in this case is alleged to cover. Accordingly, the Non-parties suggest that
their testimony in that action, which regards matters relating to a fraud defense that
Defendant/Counterclaim Plaintiff wishes to present, be used as a surrogate for the Non-parties’
testimony at the trial set for Monday in the pending case. Id.
Defendant/Counterclaim Plaintiff responds that the Non-parties’ testimony is “critical” to
Defendant/Counterclaim Plaintiff’s ability to present its affirmative defense of fraud. See D.E. 335.
In support of this position, Defendant/Counterclaim Plaintiff points to the Non-parties’ testimony in
the Broward Circuit Court matter. According to Defendant/Counterclaim Plaintiff, the Non-parties
testified that Plaintiff/Counterclaim Defendant U.S. Capital allowed the mall property where the
restaurants of the companies for which the Non-parties worked were located to fall into a state of
disrepair and that U.S. Capital was “unresponsive” to the requests of the Non-parties’ employers for
fundamental repairs. Id. at 3.
Plaintiffs/Counterclaim Defendants object to the Non-parties’ testimony at all, describing it
as irrelevant to the issues pending before the Court.
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See D.E. 332.
Nonetheless,
Plaintiffs/Counterclaim Defendants offer to stipulate to the authenticity of any exhibits accepted into
evidence in the Broward Circuit Court case, although they will not stipulate to their relevancy. Id.
at 2-3.
Finally, the Non-parties reply that Defendant/Counterclaim Plaintiff Zurich has “vastly
overstat[ed]” its need for the testimony of the Non-parties. D.E. 336 at 2. In support of this
conclusion, the Non-parties note that on June 13, 2012, Zurich indicated that it had “not decided
whether we will actually call [the Non-parties] as witnesses.” D.E. 329-1. And, as late as July 5,
2012, Zurich repeated that it was still “in the process of determining whether [the Non-parties’]
testimony will be necessary, but are serving them in case we need them.” Id. Further clarifying,
Zurich explained, “If [the Non-parties’] former testimony is allowed, then we may not need them.”
D.E. 329-2. Indeed, the Non-parties point out, Zurich never even served subpoenas on them at all to
testify at the trial when it was set to begin on July 9, 2012.
II. Discussion
This motion requires the Court to consider Rules 45(c)(3)(A)(ii) and (c)(3)(B)(iii), Fed. R.
Civ. P., and Rule 45(c)(3)(C). Rule 45(c)(3)(A)(ii) provides,
On timely motion, the issuing court must quash or modify a subpoena
that: (ii) requires a person who is neither a party nor a party’s officer
to travel more than 100 miles from where that person resides, is
employed, or regularly transacts business in person — except that,
subject to Rule 45(c)(3)(B)(iii), the person may be commanded to
attend a trial by traveling from any such place within the state where
the trial is held.
Rule 45(c)(3)(B)(iii), in turn, states,
To protect a person subject to or affected by a subpoena, the issuing
court may, on motion, quash or modify the subpoena if it requires: (iii)
a person who is neither a party nor a party’s officer to incur substantial
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expense to travel more than 100 miles to attend trial.
Finally, Rule 45(c)(3)(C) authorizes a court to order appearance under “specified conditions” if both
of the following conditions exist: (1) the subpoenaing party demonstrates “a substantial need for the
testimony . . . that cannot be otherwise met without undue hardship;” and (2) the subpoenaing party
reasonably compensates the subpoenaed person.
Here, both Mr. Scarlett and Mrs. Bremer initially qualify for the protections of Rule
45(c)(3)(A)(ii). Neither is a party or a party’s officer, and neither resides, is employed, or regularly
transacts business in person within 100 miles of Fort Lauderdale.
Both, however, reside in Florida, where the trial will be occurring. Therefore, the Court must
consider whether to exercise its discretion to modify or quash the subpoenas under Rule
45(c)(3)(B)(iii). In making this determination, the Court considers the factor set forth in Rule
45(c)(3)(C) — that is, whether Zurich has shown “a substantial need for the testimony that cannot be
otherwise met without undue hardship.”1 While Plaintiff/Counterclaim Defendant asserts that the
information that the Non-parties allegedly posses is not relevant, the Court cannot be certain at this
time. And, in view of the Eleventh Circuit’s directive to ensure that Defendants/Counterclaim
Plaintiffs have an opportunity to present their affirmative defenses, the Court cannot find that Zurich
lacks a substantial need for the testimony at this time. Because this trial is a bench trial, should the
Court conclude after hearing the evidence that it is not relevant, the Court may exclude it then.2
1
If the Court finds this to be the case, the Court has no reason to believe that Zurich
would not reasonably compensate the Non-parties, as required under Rule 45(c)(3)(C)(ii).
2
The Court reminds Zurich, however, that Judge Moreno imposed a two-day limit on the
presentation of Zurich’s case. However Zurich wishes to use that time is up to Zurich, but the
Court does not anticipate extending the time allowed.
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In the case of Mrs. Bremer, she will be present at the same courthouse where the trial is taking
place, at the same time that the trial is proceeding. And, upon inquiry with the presiding bankruptcy
judge handling Mrs. Bremer’s other matter, this Court is advised that the U.S. Capital proceeding that
Mrs. Bremer is attending will be called near the beginning of the bankruptcy court’s calendar. Under
these circumstances, it is difficult for the Court to understand how requiring Mrs. Bremer to testify
at trial in the above-captioned case would impose an undue burden on her. Accordingly, the Nonparties’ Motion to Quash is DENIED as it regards Mrs. Bremer.
The Court does not reach the same conclusion as it pertains to Mr. Scarlett. Based on his job
duties, testimony at trial in this case would impose a substantial burden. While the Court might be
willing to require Mr. Scarlett to appear, nonetheless, here, a good alternative exists and the Court
need not burden Mr. Scarlett unnecessarily. Mr. Scarlett’s testimony from the Broward Circuit Court
case is available and will accomplish Zurich’s goals. Moreover, U.S. Capital had an opportunity to
examine Mr. Scarlett in the Broward Circuit Court case. Under these circumstances, Mr. Scarlett’s
Broward Circuit Court testimony can be used by Zurich.3 Consequently, the Non-parties’ Motion to
Quash is GRANTED as it relates to Mr. Scarlett.
III. Conclusion
For the foregoing reasons, Non-parties Gregg D. Scarlett’s and Karen C. Bremer’s Emergency
Motion to Quash Subpoenas [D.E. 329] is GRANTED IN PART and DENIED IN PART,
consistent with the terms of this Order. In addition, Defendant/Counterclaim Plaintiff may
3
To be clear, the Court notes that the rulings in this Order do not constitute rulings on
relevancy. Upon hearing the testimony at issue, the Court will make an independent judgment
regarding its relevancy.
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offer the Broward Circuit Court testimony of Gregg D. Scarlett at trial.
DONE and ORDERED at Fort Lauderdale, Florida, this 13th day of July 2012.
ROBIN S. ROSENBAUM
UNITED STATES DISTRICT JUDGE
cc:
The Honorable Alicia Otazo-Reyes
Counsel of Record
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