Burch-Lucich v. Lucich et al

Filing 56

MEMORANDUM DECISION AND ORDER. NOW THEREFORE IT IS HEREBY ORDERED, that the plaintiff's motion to compel 41 is GRANTED. IT IS FURTHER ORDERED, that defendant's motion to compel 40 is GRANTED IN PART AND DENIED IN PART. IT IS FURTHER ORDERED, that the plaintiff's motion 45 is GRANTED. Signed by Judge B. Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (st)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO

BEAU BURCH-LUCICH,
Case No. 1:13-cv-218-BLW
Plaintiff,

MEMORANDUM DECISION AND
ORDER

v.
GARY L. LUCICH; MARCAE
LUCICH; MICHELLE LUCICH NIECE;
LUCICH FAMILY LIMITED
PARTNERSHIP, an Idaho limited
partnership; and NORTHWEST
FUNDING, LLC, formerly known as
LUCICH LLC, an Idaho limited liability
company,
Defendant.

INTRODUCTION
The Court has before it cross-motions to compel discovery responses, and
plaintiff’s motion to compel compliance with the Court’s Order regarding discovery of
certain material. The Court’s staff attempted a mediation session that was partially
successful, and the parties then briefed their remaining disputes. The motions are now at
issue. For the reasons explained below, the Court will grant in part and deny in part each
of the cross-motions, and will grant plaintiff’s motion to compel compliance with the
Court’s Order.

Memorandum Decision & Order - 1

BACKGROUND
Plaintiff Beau Burch-Lucich alleges that his grandparents and aunt collected an
inheritance from his father meant for him. He brings this action to recover damages for
their fraud.
Beau was Troy Lucich’s only child. Troy died in 1998 when Beau was eight years
old, although Beau did not realize it because his mother was raising him without any
assistance from Troy.
Beau alleges that his grandparents, defendants Gary and Marcae Lucich, knew he
was Troy’s son, but probated Troy’s estate as though he had no children. As a result,
Troy’s assets were allegedly distributed to (1) Gary and Marcae; (2) Troy’s sister,
Michelle; (3) Michelle’s children; and (4) the Lucich Family Limited Partnership. See
Complaint (Dkt. No. 1) at ¶ 18. Beau alleges that all of Troy’s assets should have gone to
him because, at the time of Troy’s death, Troy had no will, no spouse, and no other
children.
During the summer of 2004, when Beau was fourteen years old, he wanted to meet
his father. After learning that Troy had died six years earlier, he decided to visit his
grandparents – Troy’s parents – Gary and Marcae Lucich. Part of that visit included a
paternity test, which Beau alleges established that Troy was Beau’s father. During the
visit, Beau’s grandparents told him he was entitled to an 11% interest in the Lucich
Family Limited Partnership, which was created in 1999, after Troy’s death. That 11%
interest was allegedly conveyed to Beau during a family meeting. See Complaint, supra,
at ¶ 3.
Memorandum Decision & Order - 2

Beau claims he did not learn about the probate of his father’s estate until March
2013. To recover his share of Troy’s estate, Beau sued (1) his grandparents, Gary and
Marcae Lucich; (2) his aunt – Troy’s sister – Michelle Lucich; and (3) the Lucich Family
Limited Partnership (“Partnership”). Beau alleges seven claims against these defendants:
(1) probate fraud under Idaho Code § 15-1-106; (2) conspiracy to commit probate fraud;
(3) breach of fiduciary duty; (4) conspiracy to breach “partnership fiduciary duties”; (5)
constructive trust; (6) declaratory judgment; and (7) a “partner’s direct action” under
Idaho Code 53-2-1001.
ANALYSIS
Plaintiff’s Motion to Compel – Bank Records
To pursue his claims, plaintiff needs to value his interest in the Partnership and
trace its assets and liabilities. To that end, he has made discovery requests of defendants
seeking bank records pertaining to the Partnership. The record at least raises questions
concerning whether the Partnership used four bank accounts: (1) two accounts with
Idaho Independent Bank, one with an account number ending in 4054 and the other
ending in 9295; and (2) an account with U.S. Bank, with an account number ending in
2585; and (3) an account referred to as the Gem account.
The defendants provided information in their possession regarding two of these
accounts – those with the Idaho Independent Bank. But there are gaps in the documents
provided. The gaps make it difficult for plaintiff to trace the flow of funds and assets into
and out of the Partnership. This case is all about tracing – tracing those funds and assets

Memorandum Decision & Order - 3

to determine their source and ownership. Plaintiff is entitled to discovery to close the
gaps that exist in the financial information.
The defendants represent that they have no more information on these four
accounts, and they offered to provide a consent so that plaintiff could obtain whatever
information the banks have retained. But the consent offered by defendants was unduly
narrow and required plaintiff to identify specific documents. The defendants must
provide a full and unconditional consent to allow plaintiff to obtain the following: (1) All
information concerning Idaho Independent Bank account number ending in 4054 from
the date the account was opened through December 30, 2001; and (2) All information
concerning Idaho Independent Bank account number ending in 9295 for the period
between March 28, 2011 and May 25,2011, and the period between June 27, 2011, and
December 26, 2011.
With regard to the other two accounts – the U.S. Bank account and the Gem
account – the defendants assert that they were never used for any Partnership purpose and
were at all times used as the personal account of Gary and Marcae Lucich. But
deposition testimony and handwritten documents raise a question whether these two
accounts were used for Partnership purposes, and that is sufficient to make them
discoverable. For that reason, the Court will order that the defendants (1) turn over any
information in their possession concerning the U.S. Bank account number ending in 2585
and the Gem account for the entire period the accounts were open, and (2) provide a full
and unconditional consent for plaintiff to obtain from the banks information concerning

Memorandum Decision & Order - 4

U.S. Bank account number ending in 2585 and the Gem account, for the entire period the
accounts were open.
Plaintiff’s Motion to Compel – Columbia Investments
Plaintiff is seeking all documents including tax returns and K-1’s relating to
Columbia Investments. That entity was originally formed in 1997 by Gary and Marcae
Lucich and Buzz Woods, and its principal assets were parcels of real property. In late
1997, the partners gifted a 5% interest to Troy Lucich. When Troy passed away in 1998,
Gary Lucich was appointed personal representative of Troy’s estate. Gary testified in his
deposition that he paid the liabilities of Troy’s estate out of his own funds because the
estate’s assets were not sufficient to cover the liabilities. To reimburse himself for the
payment of those liabilities, Gary – in his capacity as personal representative of Troy’s
estate – directed Buzz Woods to transfer Troy’s 5% interest in Columbia Investments to
himself and his wife Marcae. The Luciches then transferred the 5% interest to their
daughter Michelle.
Plaintiff is seeking all Columbia Investment records, including IRS Form K-1s for
each member of the Partnership. A partnership uses IRS Form K-1 to report, for each
partner, his or her share of the partnership’s income, deductions, credits, etc. The K-1
forms for Columbia Investments would assist plaintiff in valuing Troy’s 5% share, and to
test Gary Lucich’s statement that Troy’s 5% share was fair reimbursement for Gary’s
payment of the estate’s debts.
There are indications in the record of an intermingling of funds between Columbia
Investments and the Partnership that supports plaintiff’s attempts to discover the
Memorandum Decision & Order - 5

Columbia documents and the K-1 forms. For example, the Partnership may have been
paying Columbia’s debts. See Exhibit Z (Dkt. No. 41-28). There are also indications in
the record that between 1997 and 2005, Columbia Investments purchased and sold real
property worth over two million dollars, and that Gary, Marcae, and Michelle may have
contributed their gains from those sales into the Partnership.
Plaintiff is entitled to trace the flow of assets and funds, and to accomplish that
tracing, he is entitled to examine the Columbia Investment documents from 1997 to 2005,
including all K-1s issued by Columbia and the tax returns requested.
Plaintiff’s Motion to Compel – Attorney Fees
The Court finds that no award of attorney fees is warranted here, and will deny
plaintiff’s request for fees contained in their motion to compel.
Defense Motion to Compel – Privilege Log
The Court turns next to the defendants’ motion to compel. The defendants note
first that plaintiff has claimed privilege for many documents but never filed a privilege
log. Plaintiff recognizes his obligation to produce a privilege log under Rule 26(b)(5)(A),
but argues that he is not required to prepare one until defendants initiate the conference
required by Local Rule 37.1. That Local Rule applies to “discovery” motions, however,
and this is a privilege issue governed by Rule 26(b)(5)(A), which requires the preparation
of a privilege log. The Court will so order.
Defense Motion to Compel – Paternity Contention
In Interrogatories 7 & 8, and Request for Production 3, defendants seek all facts,
documents, and persons with knowledge, that would support plaintiff’s assertion that (1)
Memorandum Decision & Order - 6

he is the biological son of Troy Lucich, and (2) defendants had been told by Troy, prior
to 2004, that Beau was his son. These are relatively narrow factual discovery requests
seeking discoverable material – plaintiff’s paternity is a key issue in this case. The
requests are not, on their face, seeking any material protected by privilege or the work
product doctrine.
Under the proportionality test in Rule 26(b)(2)(C), the benefits of this discovery
would be very high while the burden of responding would be comparatively low because
the amount of material at issue cannot be large. The plaintiff has provided vague
responses to these questions that are insufficient. The Court will compel more detailed
answers to these questions.
Defense Motion to Compel – Estate Assets & Liabilities
In Interrogatory 10, defendants seek information from plaintiff concerning the
assets and liabilities of Troy’s estate. These are fact interrogatories, rather than
contention interrogatories, and do not seek on their face any material covered by privilege
or the work product doctrine.
In answering this Interrogatory, the plaintiff referred the defendants to the records
already produced to calculate the estate’s assets and liabilities. Under Rule 33(d), where
the burden of sorting through a mass of business records to answer a fact interrogatory is
substantially the same for either party, the responding party may answer by identifying
those records and making them available for the responding party. Autex North America
Inc.v. Mitchell Intern., Inc., 2014 WL 4961437 (S.D.Cal. 2014). Here the burden of
finding the answer in the assembled discovery would be roughly the same for either
Memorandum Decision & Order - 7

party. The defendant Gary Lucich was the personal representative of the estate and so
was positioned to have existing knowledge about the estate’s assets and liabilities. Thus,
the Court finds that Rule 33(d) governs here, and the plaintiff’s answer is sufficient.
Defense Motion to Compel – Forgery Claim
In interrogatory 11 and request for production 15, defendants seek discovery
concerning the plaintiff’s allegations that documents were forged by defendants or Sunny
Lucich. These requests seek discoverable information, and the interrogatory questions
are contention interrogatories authorized by Rule 33(a)(2), as discussed above, and their
collection by plaintiff’s counsel will not implicate the work protect doctrine.
Turning to the proportionality test in Rule 26(b)(2)(C), the benefit of having the
forgeries identified is very high, and the burden would be minimal, as the requests do not
ask for a large amount of material. Once again, plaintiff invokes Rule 33(d) by referring
defendants to the documents already produced in discovery. But this time – unlike the
case with the assets and liabilities of Troy’s estate – the burden of finding an answer is
not shared equally. The defendants cannot search those records and find forgeries – they
depend on the plaintiff to identify the forgeries, and then the defendants can have their
own expert test the documents. Rule 33(d) does not apply in this situation and so the
plaintiff must fully answer interrogatory 11 and request for production 15.
Defense Motion to Compel – Fraud Claim
In interrogatory 14, the defendants seek information concerning the plaintiff’s
fraud claim. That interrogatory is set forth in full below:

Memorandum Decision & Order - 8

INTERROGATORY NO. 14: Please state with particularity and in full
substance every statement or representation you contend Gary Lucich,
Marcae Lucich and/or Michelle Lucich has made knowing, when it was
made that it was false, or with reckless disregard to its truth or falsity,
which statement or representation is the basis of any fraud claim you are
making in this case and, with respect to each statement or representation,
please state:
a) When by date or dates, or if unknown, approximate date or dates it
was made;
b) By whom;
c) To whom;
d) How made (oral, in writing, contained in a particularly identified
document);
e) A factual description of how you were deceived or misled by such
statement/representation;
f) When by date you first discovered the statement or representation
having been made;
g) When by date you first discovered the statement or representation
was false.
[Note: Please respond to each of the subsections of this Interrogatory
separately. Please identify all persons with knowledge by name, address
and telephone number with reference to each subsection. And, please
identify all documents by the document control numbers in this case.]
See Interrogatories (Dkt. No. 40-4) at p. 24.1
The plaintiff has objected to this interrogatory as being overly burdensome and as
intruding on protected work product. Certainly the detailed response demanded by
Interrogatory 14 will require immense effort and expense.2 See e.g. Hanford v. City of

1

Interrogatory 18, and requests for production 8 and 9, similarly seek information on the fraud claim,
and are subject to the same analysis set forth above.
2

By demanding such detail, Interrogatory 14 signals that failure to provide even the smallest piece of
evidence will result in that evidence being excluded at trial. This compels the responding party to incur
great expense to sweep up every crumb of evidence. In fact, however, “[t]he general rule governing the
use of answers to interrogatories is that under ordinary circumstances they do not limit proof.” Volterra
Semiconductor Corp. v. Primarion, Inc., 796 F.Supp.2d 1025, 1074 (N.D. Cal. 2011). As with any rule,

(Continued)
Memorandum Decision & Order - 9

Hanford, 2013 WL 5671460 at *8 (E.D.Cal. 2013) (stating that “[c]ontention
interrogatories should not require a party to provide the equivalent of a narrative account
of its case, including every evidentiary fact, details of testimony of supporting witnesses,
and the contents of supporting documents”); Schwarzer, Tashima & Wagstaff, Federal
Civil Procedure Before Trial (2014) at § 11:1682 (“[c]ontention interrogatories asking
for each and every fact . . . that supports particular allegations in a pleading may be held
overly broad and unduly burdensome”).
At the same time, the defendants are entitled to know the evidence supporting
plaintiff’s fraud claim. Kolker v. VNUS Medical Technologies, Inc., 2011 WL 5057094
at *6 (N.D.Cal. 2011) (noting that “courts generally approve” interrogatories that seek
“the identity of witnesses or documents”). To strike a balance between the burden and
the benefit, Rule 26(b)(2)(C) directs the Court to consider if there is a “less burdensome”
alternative to obtain the same information. Here there is: Plaintiff could answer
Interrogatory 14 by identifying the fraud evidence generally, and then defendants could
follow up with detailed questions in plaintiff’s deposition, a more efficient format for
assessing plaintiff’s recollection of (and reliance on) conversations and representations.

there are exceptions, but in the typical case, this general rule should result in responding parties foregoing
the costs of including every last crumb of evidence in their responses.

Memorandum Decision & Order - 10

Shoen v Shoen, 5 F.3d 1289, 1297 (9th Cir., 1993) (stating that “[w]ritten interrogatories
are rarely, if ever, an adequate substitute for a deposition when the goal is discovery of a
witness’ recollection of conversations”).
Moreover, by asking plaintiff’s counsel to explain precisely which witnesses and
documents he will use to prove each element of the fraud claim, Interrogatory 14 comes
close to revealing trial strategy, which is protected work product under Hickman v.
Taylor, 329 U.S. 495 (1947) and Rule 26(b)(3)(A).3 See In re Ashworth, Inc. Securities
Litigation, 213 F.R.D. 385, 389 (S.D.Cal.2002), (refusing to compel answers to
interrogatories that “would necessarily reveal counsel’s opinions regarding the relative
importance of these witnesses, the highlights of their testimony/factual knowledge, and
would link any future statements by the witnesses with plaintiff’s counsel’s legal theories
and conclusions as outlined in the complaint”).
But if Interrogatory 14 is read more narrowly to only ask plaintiff to identify the
witnesses and documents generally supporting the fraud claim – without asking plaintiff
to link each witness and document to each element of the fraud claim – it is proper.
While even this request intrudes to a degree on counsel’s thought process, that intrusion
is specifically authorized by Rule 33(a)(2): “An interrogatory is not objectionable merely

3

Rule 26(b)(3)(A) protects work product contained in “documents and tangible things” while
Hickman extends to intangible work product.

Memorandum Decision & Order - 11

because it asks for an opinion or contention that relates to fact or the application of law to
fact.” The drafters explained this further in the Advisory Committee Notes:
Rules 33 and 36 have been revised in order to permit discovery calling for
opinions, contentions, and admissions relating not only to fact but also to
the application of law to fact. Under those rules, a party and his attorney or
other representative may be required to disclose, to some extent, mental
impressions, opinions, or conclusions. But documents or parts of
documents containing these materials are protected against discovery by
this subdivision [26(b)(3) ].
See Advisory Comm. Notes to 1970 Amendments to Rule 26(b)(3) (emphasis added).
Consistent with this, “courts have generally held that contention interrogatories are
proper even where they probe a party’s contentions as to how the law applies to the facts,
explaining that such probing is perfectly permissible and does not invade the work
product privilege merely because the party’s counsel must disclose the reasoning
applying the law to the facts.” Gilmore v. City of Minneapolis, 2014 WL 4722488 at *5
(D.Minn. Sept. 22 2014) (quoting In re Rail Freight Surcharge Antitrust Litig., 281
F.R.D. 1, 4 (D.D.C.2011)).
To avoid intruding on protected work product, and to strike the balance directed
by the proportionality analysis in Rule 26(b)(2)(C), the Court will compel an answer to
Interrogatory 14 that identifies the evidence supporting the fraud claim without
answering each subpart of the Interrogatory and without linking that evidence to each
element of the fraud claim. The same analysis applies to requests for production 8 and 9.
With regard to Interrogatory 18, the plaintiff has already provided the type of answer just
approved by the Court for Interrogatory 14, and so the Court will deny the motion to
compel any further answer to Interrogatory 18.
Memorandum Decision & Order - 12

Defense Motion to Compel – Fiduciary Duty Claims
In requests for production 10 through 14, defendants seek documents concerning
plaintiff’s claims for breach of fiduciary duty. These discovery requests are similar to
those just discussed regarding fraud. For example, request for production 11 is set forth
in full below:
REQUEST FOR PRODUCTION NO. 11: Please produce any and all
documents that support your allegations in paragraphs 46 through 48 of the
Complaint that Gary Lucich or Marcae Lucich breached the fiduciary duty
you allege they owed to Plaintiff generally, and specifically:
1. That in omitting Plaintiff from the list of Troy's heirs, Gary Lucich
knowingly, intentionally, and under oath made a material false statement
and failed to make a true statement when under an affirmative duty to do so
(paragraph 46 a);
2. That Marcae Lucich "kept the court in the dark" regarding Plaintiff's
existence and status as Troy's sole heir (paragraph 47 a. ii);
3. That Gary Lucich or Marcae Lucich caused the assets of Troy's estate to
be distributed to Gary Lucich, Marcae Lucich, Michelle Bennett, Michelle
Bennett's children, and Lucich Family Limited Partnership (paragraph 46 d
and 47 a. iv);
4. That the probate of Troy G. Lucich's estate was still open in 2004 when
Troy's paternity of Plaintiff was established (paragraph 46 e);
5. That Gary Lucich refused to disclose to Plaintiff any information
regarding the probate of Troy's estate (paragraph 46 f and 47 a. v);
6. That Gary Lucich or Marcae Lucich participated in a civil conspiracy to
perpetuate a probate fraud (paragraph 46 g);
7. That Gary Lucich or Marcae Lucich did not account to Plaintiff for all
dealings in connection with the estate assets and property and the Lucich
Family Limited Partnership and that they had a duty to give Plaintiff such
an accounting (paragraph 46 i and 47 c);
8. That Plaintiff has an “acknowledged ownership interest” in Lucich
Family Limited Partnership, including all documents showing specifically
what persons or documents “acknowledged” said interest, the nature or
percentage of said interest, and how said interest was conveyed (paragraph
46 j and 47 d);
9. That said interest in Lucich Family Limited Partnership, if 10% or 11%,
was “far less” than that to which Plaintiff was entitled (paragraph 46 k and
47 e);
Memorandum Decision & Order - 13

10. That Gary Lucich or Marcae Lucich lied to Plaintiff in communicating
to Plaintiff that Plaintiff was entitled to no more than 11% interest in
Lucich Family Limited Partnership (paragraph 46 1 and 47 f);
11. That Gary Lucich or Marcae Lucich managed the Lucich Family
Limited Partnership as if Plaintiff was not a limited partner (paragraph 46
m and 47 g);
12. That Gary Lucich or Marcae Lucich made improper distributions and
transfers of Lucich Family Limited Partnership assets or that they have
made any distributions of Lucich Family Limited Partnership assets
whatsoever since its inception on December 30, 1999, to the present
(paragraph 46n and 47h);
13. That Gary Lucich or Marcae Lucich failed and refused to make
distributions of Lucich Family Limited Partnership assets to Plaintiff and
that Gary Lucich had any duty to make such distributions to Plaintiff
(paragraph 46o and 47i);
14. That Gary Lucich or Marcae Lucich failed and refused to disclose to
Plaintiff or otherwise provide Plaintiff with information and documents
bearing on Lucich Family Limited Partnership's transactions activities or
assets (paragraph 46 p and 47 j);
15. That Gary Lucich or Marcae Lucich used pressure tactics to get Plaintiff
to relinquish any interest Plaintiff may have or may have had in Lucich
Family Limited Partnership and failed and refused to provide Plaintiff with
information regarding what you allege was “the true extent and the value of
that interest” (paragraph 46 q and 47 k);
16. That Gary Lucich threatened Plaintiff that Plaintiff would get nothing
from Lucich Family Limited Partnership (paragraph 46 r);
17. That Plaintiff was injured by Gary Lucich or Marcae Lucich's said
alleged breach of a fiduciary duty to Plaintiff (paragraph 48).
The analysis applied by the Court to Interrogatory 14 applies here. These
Requests for Production are overly burdensome and intrude on protected work product.
Once again, the Court will order plaintiff to provide only a partial answer – to answer
requests for production 10 through 14, the plaintiff need only identify the documents that
relate to the fiduciary duty claim.
Defense Motion to Compel – Capital Contributions & Improper Distributions

Memorandum Decision & Order - 14

In Requests for Production 10, 11, 21, and 22, defendants seek documents that
show that plaintiff made a capital contribution to the Partnership, and that show any
improper Partnership distributions or instances where a defendant failed or refused to
make a Partnership distribution to plaintiff.4 Plaintiff has provided everything (except
that which will accompany a privilege log) in answer to Requests for Production 10 and
21, leaving only 11 and 22 at issue. The two Requests ask for the same material, and
Request for Production 11 is set forth below in full:
REQUEST FOR PRODUCTION NO. 11: Please produce (or identify by
specific document control number) every document showing, or that you
rely upon to show, that any Defendant:
a) made improper distributions and transfers of Limited Partnership
assets and benefits;
b) failed and refused to make distributions of Limited Partnership assets
to Plaintiff in accordance with his rightful ownership;
c) deprived Plaintiff of his fair share of Limited Partnership
distributions.
Part of this Request for Production asks plaintiff for evidence of a negative – that
is, it asks for evidence that defendants failed to take some action. Such discovery
requests are difficult to answer and often held unduly burdensome. Makaeff v. Trump
University, LLC, 2014 WL 3490356 (S.D.Cal. 2014) (collecting cases rejecting discovery
requests that require responding party to prove a negative). The Court agrees and will not
compel an answer to subparts (b) and (c) above. Subpart (a) is different, and asks for

4

Requests for production 10 and 11 are set forth in Exhibit D (Dkt. No. 40-5), while requests for
production 21 and 22 are set forth in Exhibit B (Dkt. No. 40-3).

Memorandum Decision & Order - 15

documents showing any improper transfers. The Court will compel an answer to that
subpart.
Plaintiff’s Motion To Compel Discovery Re QuickBooks
The plaintiff seeks to compel defendants to provide accounting records – including
QuickBooks records – for the defendant Partnership and an entity known as Northwest
Funding. Northwest Funding is a General Partner of the Partnership, holding a 1%
interest.
By letter dated May 16, 2013, plaintiff made a statutory demand under Idaho Code
§ 53-2-304 for information that includes “full information regarding the . . . financial
condition of the . . . limited partnership” and “other information regarding the activities
of the limited partnership . . . .” See I.C. § 53-2-304. With regard to this latter category,
the plaintiff requested “records of all payments of any nature to any partners of the
Partnership.” See Exhibit A (Dkt. No. 41-3). Northwest is a partner in the Partnership.
Thus, this formal request under the statute clearly included all accounting records for the
Partnership and Northwest, including QuickBooks accounting records.
Defendants failed to provide the records. For four months, plaintiff attempted to
obtain the records but received nothing from defendants. Plaintiff then served discovery
requests on defendants, again seeking the accounting records. For example, plaintiff’s
Interrogatory 18 asked defendants to identify the transfer of any cash or assets in excess
of $1,000 from the Partnership to Northwest Funding. See RFP & Interrogatories (Dkt.
No. 41-17) at ¶ 18. In addition to this Interrogatory, the plaintiff made a Request for
Production seeking “each document that relates to or concerns any transfer or distribution
Memorandum Decision & Order - 16

of cash, marketable securities or property from the [Partnership] to . . . Northwest
Funding . . . .” See RFP (Dkt. No. 41-19) at ¶ 25. These requests clearly cover the
QuickBooks records for both the Partnership and Northwest Funding because those
records might contain entries allowing plaintiff to trace assets and funds between those
two entities. In response to these requests, defendants failed to produce any of the
QuickBooks accounting records. See Responses (Dkt. No. 41-18 & 41-20).
A full year after the plaintiff had made his statutory request, the defendants
continued to object and a mediation session was held with the Court’s staff. During that
session, an agreement was reached for the defendants to turn over the QuickBooks
records. The parties entered into a Discovery Stipulation designed to “provide for the
orderly discovery of QuickBooks data and electronically stored information related to the
Partnership and identified as such, to provide for the orderly discovery of data (if any
exists) stored in the files of Northwest that relates to the Partnership.” See Discovery
Stipulation (Dkt. No. 38). The Court approved the agreement, and incorporated it into a
Court Order. See Order (Dkt. No. 39).
The Order directed the defendants to grant plaintiff access to “all the Data stored
by Northwest in its files (“Northwest Data”)” to a third party vendor, who would
download and copy that data and send it to Resolve Financial Group. Resolve would
separate the data relevant to the Partnership from irrelevant data, and provide a copy of
the partnership-relevant files to the defendants only. If the defendants did not file any
objection within seven days, Resolve would send the data files to the plaintiff. Plaintiff

Memorandum Decision & Order - 17

agreed to pay for the fees of the Resolve, the third party vendor, and the costs of the
mobile storage devices used for the retrieval.
In May of 2014, the third party vendor retrieved three categories of data: (1)
Partnership accounting data retrieved from the Lucich’s desktop computer; (2) Northwest
Quickbooks accounting data retrieved from the Lucich’s desktop computer; and (3)
Northwest Quickbooks accounting data retrieved from an a cloud-based account. The
third party vendor then transferred this data to defendants who raised no objection, and
the data was then sent on to Resolve.
Resolve discovered that it could not access the data because it was password
protected. Resolve was able to obtain from the defendants a password for the first
category of data listed above (the Partnership accounting data retrieved from the desktop
computer), but it did not work for the other two categories of data. The Luciches could
not recall the old passwords, and Marcae Lucich was “doing her best to remember the old
passwords” but having no success. See E-Mail From Counsel for the Lucich’s dated
June 13, 2014 (Dkt. No. 45-6). Eventually, Resolve used a password recovery program
to access the second category of data (the Northwest Quickbooks accounting data
retrieved from the desktop computer).
Still unable to access the third category of data, Resolve started examining the two
categories of data it was able to access. It found that “the Partnership’s funds and assets
have been extensively and hopelessly commingled with Northwest’s account . . . , the
Lucich’s personal account . . ., and a GEM account . . . . See Lyons Affidavit (Dkt. No.
45-2) at ¶ 9.
Memorandum Decision & Order - 18

Defendants argue that plaintiff is engaged in a “fishing expedition”, see Response
Brief (Dkt. No. 46) at p. 4, but this partial evaluation by Resolve shows the
discoverability of the Partnership and Northwest accounting data. This case centers on
tracing assets, and these accounting records are crucial to that tracing. The QuickBooks
accounting records were discoverable even before Resolve’s evaluation, and their study
simply confirms that conclusion. The Court therefore rejects defendants’ argument that
plaintiff has not carried his burden of showing this data is discoverable.
With regard to the third category of data – the online cloud-based Quickbooks data
for Northwest – plaintiff’s counsel stated that “it is not entirely clear to me” why this data
is not accessible. See E-mail From Counsel for Plaintiff dated June 23, 2014 (Dkt. No.
45-6). The record does not reveal any clear cause for the inaccessibility of the data.
At any rate, plaintiff offered a solution that involved granting Resolve a “fullreport user access” to the Quickbooks program that would allow Resolve to access the
online data while at the same time would prevent Resolve from making any changes to
the data. This “read-only” provision was important because this third category of data
includes the accounting records of the Luciches’ ongoing gas station and convenience
store business, such as payroll and tax information.
The defendants agreed to this but refused to comply with the Order and provide
the information unless the plaintiff agreed to the following requirements: (1) plaintiff
must identify in advance a list of “particular information [plaintiff] thinks exists related to
some identifiable issue or concern;” (2) plaintiff must arrange for Resolve to sort all the
documents they have already accessed, and provide it to defendants, before defendants
Memorandum Decision & Order - 19

will provide all the remaining Northwest data located on the cloud; (3) plaintiff must pay
defendants the expenses and fees they have incurred in contesting this discovery dispute;
(4) plaintiff must agree to, at most, a 30 day extension of the discovery deadlines; and (5)
plaintiff must agree to terminate the provision of the Discovery Stipulation that permits
Resolve to have access to the QuickBooks data until 30 days following the resolution of
the civil action.5
None of these five conditions was contained in the Discovery Stipulation
incorporated into the Court’s Order. That Order required defendants to turn over the
QuickBooks material. In explaining why he refused to comply with the Order, defense
counsel states that “the circumstances have changed warranting necessary clarification
and conditions not previously anticipated.” See Response Brief, supra at p.7.
But there is no change of circumstances that justifies defendants’ unilateral refusal
to abide by the terms of the Court’s Order. Defendants’ repeated claims that plaintiff is
engaged in a fishing expedition – and demands that he identify the particular documents
he needs before being allowed to examine the accounting records – are specious. As
discussed above, the accounting records are clearly discoverable, and there is no
requirement under those circumstances that the discovering party identify particular
documents before being allowed to examine the accounting records as a whole.

5

Defendants earlier demanded that Resolve sign an indemnity agreement holding them liable for
any alterations to the data occurring during downloading. The defendants later dropped that demand.

Memorandum Decision & Order - 20

Defendants continue to argue – even in the briefing on the present motion – that
plaintiff has failed to make a formal discovery request for the QuickBooks records. See
Response Brief, supra at p. 4. As discussed, the argument is unreasonable, and
demonstrates that defense counsel is being difficult rather than being a zealous advocate.
The defendants’ refusal to abide by the Order and turn over the discovery forced
plaintiff to file the motion now under consideration. The Court finds unreasonable the
defendants’ refusal to comply with the Order.
Accordingly, the Court will grant plaintiff’s motion and order the following: (1)
Defendants must immediately grant Resolve full-report user status to Northwest
Funding’s cloud-based QuickBooks data; and (2) The deadlines in this case shall be
postponed until the defendants have provided the information. Counsel shall inform the
Court when that information has been provided and the Court will hold a status
conference to set new deadlines.
Plaintiff also seeks an award of the attorney fees it incurred in filing this motion.
Defendants object and seek their own fees.
The discovery of accounting records in a tracing case is a simple process, typically
involving quick disclosure, no disputes, and minimal fees. In contrast, defense counsel in
this case has unreasonably fought disclosure of records that are clearly discoverable. He
is not entitled to be reimbursed for the fees he incurred in that fight.

Memorandum Decision & Order - 21

The Court does recognize that defense counsel was undergoing difficult personal
events in his life that may have clouded his judgment to some degree.6 But that does not
excuse his failure to comply with a Court Order and his difficult behavior that goes far
beyond zealous advocacy. Because that behavior forced plaintiff to file this motion, the
Court will award plaintiff the attorney fees necessary to prepare this motion and
associated briefing pursuant to the authority granted in Rule 37(a)(5).
ORDER
In accordance with the Memorandum Decision set forth above,
NOW THEREFORE IT IS HEREBY ORDERED, that the plaintiff’s motion to
compel (docket no. 41) is GRANTED. The Court compels defendants to provide an
answer as follows:
1. Regarding bank account records, and specifically with regards to Gary Lucich,
Marcae Lucich, and Michelle Lucich Niece, Defendants shall provide all bank
account records and any other responsive documents related to Plaintiff’s May
16, 2013, Statutory Demand to review partnership records, Requests for
Production No.’s 12, 18, 20, 26, and 28, and Interrogatory No. 12.
2. Regarding bank account records, and specifically with regard to the
Partnership, defendants shall provide all bank account records and any other

6

During the time of this dispute, defense counsel was dealing with a very serious family
emergency.

Memorandum Decision & Order - 22

responsive documents related to Plaintiff’s May 16, 2013, Statutory Demand
and Requests for Production No.’s 11, 19, and 25.
3. Regarding Columbia documents, and specifically with regards to Gary Lucich,
Marcae Lucich, and Michelle Lucich Niece, defendants shall, pursuant to
Requests for Production No.’s 4, 5, and 6 and Interrogatory No. 13, provide all
documents relating to Columbia, including, but not limited to, K-1’s received
by Defendants individually from Columbia.
4. Regarding Columbia documents, and specifically with regards to the
Partnership, defendants shall provide all documents relating to Columbia
pursuant to plaintiff’s Request for Production No.’s 3, 4, 5, 11, and 19.
5. The request for attorney fees is DENIED.
IT IS FURTHER ORDERED, that defendant’s motion to compel (docket no. 40)
is GRANTED IN PART AND DENIED IN PART. The motion is granted to the extent it
seeks to compel the following:
1. Privilege Log: Plaintiff must file a privilege log;
2. Paternity: Plaintiff must file answers to Interrogatories 7 & 8, and
Request for Production 3;
3. Forgery: Plaintiff must answer Interrogatory 11 and Request for
Production 15.
4. Fraud: Plaintiff must file answers to Interrogatory 14 and Requests for
Production 8 & 9 that identify the documents and witnesses that support
the claim of fraud. The motion is denied to the extent it asks for more,
Memorandum Decision & Order - 23

and the plaintiff is not compelled to link the evidence to each element of
fraud.
5. Fiduciary Duty: Plaintiff must file answers to Requests for Production
10 through 14 that identify the documents pertaining to the breach of
fiduciary duty. The motion is denied to the extent it asks for more.
6. Capital Contributions & Improper Distributions: Plaintiff must file
answers to Requests for Production 11(a) & 22(a).
IT IS FURTHER ORDERED, that the plaintiff’s motion (docket no. 45) is
GRANTED, and the Court orders the following: (1) Defendants must
immediately grant Resolve full-report user status to Northwest Funding’s cloudbased Quickbooks data; (2) The deadlines in this case shall be postponed until the
defendants have provide the information; (3) plaintiffs shall file a petition for
attorney fees and costs incurred in filing this motion with its supporting briefs and
documents, and the Court shall award those fees and costs that are reasonable; and
(4) Counsel shall inform the Court when the discovery has been provided and the
Court will hold a status conference to set new deadlines.

Memorandum Decision & Order - 24

DATED: January 5, 2015

_________________________
B. Lynn Winmill
Chief Judge
United States District Court

Memorandum Decision & Order - 25