Maher et al v. The Rowen Group, Inc. et al
Filing
173
MEMORANDUM Opinion and Order Signed by the Honorable Arlander Keys on 11/12/2013. Mailed notice(ac, )
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
ROBERT P. MAHER and MARILYN
V. MAHER, individuals,
Plaintiffs,
v.
THE ROWEN GROUP. INC., d/b/a
PLAYROOM ENTERTAINMENT, a
California corporation, and
DANIEL M.J. ROWEN, an individual,
Defendants.
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No. 12 C 7169
Judge Marvin E. Aspen
Magistrate Judge
Arlander Keys
MEMORANDUM OPINION AND ORDER
On September 7, 2012, Robert Maher and Marilyn Maher,
husband and wife, filed this lawsuit against Daniel Rowen and the
Rowen Group, a California corporation run by Mr. Rowen that does
business as Playroom Entertainment.
Playroom makes and sells
niche toys and games, both on its own and through distributors,
including a company called ACD, which is run by the Mahers’ son,
Robert Maher, Jr.
In their complaint, the Mahers allege that Mr.
Rowen and Playroom violated various provisions of a loan
agreement the parties executed on June 30, 2011.
The defendants
deny that they breached the agreement.
The case is currently before the Court on the Mahers’ motion
for entry of judgment, filed September 3, 2013, and on the
Mahers’ motion for sanctions, filed September 4, 2013.
Both
motions seek to punish the defendants for Mr. Rowen’s conduct in
connection with his deposition.
After the defendants designated
Mr. Rowen as Playroom’s 30(b)(6) witness, the plaintiffs served a
notice of deposition and Mr. Rowen was deposed on June 21, 2013.
But he failed to produce documents requested of him, and he was
not as prepared as he should have been to answer questions as a
30(b)(6) witness.
Accordingly, in response to a motion from the
plaintiffs, the Court issued an order compelling Mr. Rowen to
appear again and to produce the requested documents.
In its
order, issued August 19, 2013, the Court required Mr. Rowen to
sit for deposition by August 29, 2013.
a variety of reasons.
That did not happen – for
And the Mahers filed their motions seeking
sanctions, fees and costs.
Discussion
A.
The Mahers’ Motion for Sanctions
The Court turns first to the Mahers’ motion for sanctions
pursuant to Rule 37(b)(2).
Federal Rule of Civil Procedure
37(b)(2)(A) grants to district courts the power to impose
appropriate sanctions for violations of discovery orders.
Indeed, district courts have “wide latitude in fashioning
appropriate sanctions.” Johnson v. Kakvand, 192 F.3d 656, 661
(7th Cir. 1999).
An appropriate sanction is one that is
“reasonable under the circumstances.”
Id., citing Williams v.
Chicago Board of Education, 155 F.3d 853, 857 (7th Cir. 1998).
The Mahers have moved for sanctions against the Rowen Group
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and Mr. Rowen based upon Mr. Rowen’s performance at his initial
deposition session, and his failure to appear for a second
deposition session and to produce documents, as ordered by the
Court.
As a sanction for this behavior, the Mahers ask the Court
to strike the defendants’ answer to the complaint, strike the
defendants’ affirmative defenses and the remaining counts of his
counterclaim and preclude the defendants from offering any
evidence in support of his claims or in opposition to their
claims.
At an evidentiary hearing held October 11, 2013 in
connection with an emergency motion filed by the Mahers, the
Court heard testimony and arguments concerning what Mr. Rowen had
and had not produced in the way of documents.
At that time, the
Court granted the Mahers leave to seek Playroom’s bank records
directly from its banks.
And it ordered Mr. Rowen to sit for
another deposition session (of no longer than 2 hours) by
December 17th.
harsh.
Given this, the requested relief is extremely
It is especially harsh because the Mahers have also asked
for money damages to compensate them for any wasted time and
energy caused by Mr. Rowen’s deposition-related behavior (that
motion is addressed below).
The requested relief is also
particularly harsh because, at the end of the day, the Mahers
will have deposed Mr. Rowen and asked him all of the questions
they want to ask, and they will have received from Mr. Rowen all
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of the documents he has – as well as the bank records, which they
will receive via subpoena directly from the financial
institutions with which Playroom does business.
Additionally, although the Court does not condone the
failure to appear for deposition, this is not a case where a
party is simply thumbing its nose at a court order.
While the
Mahers were trying to nail down Mr. Rowen for a deposition,
counsel for the defendants filed a motion to withdraw from the
case before Judge Aspen, who twice continued it, most recently
until January 9, 2014.
Counsel’s motion – and whatever
circumstances led to the filing of the motion – does not excuse
Mr. Rowen’s discovery deficiencies.
But it does explain why
things might be taking longer than they otherwise should.
At the October 11 hearing, the Mahers made much of
handwritten notes Mr. Rowen claimed he took to document various
conversations and transactions.
Mr. Rowen testified at his
deposition that he took copious notes whenever he spoke with Mr.
Maher, as well as various licensors and debtors.
Yet, when asked
to produce those notes, he produced just a few pages.
This
appears to be one basis for the Mahers’ sanctions motion.
But,
at the October 11 hearing, Mr. Rowen testified that he had
produced all of the notes he had, and that he could not find any
of the other notes he referenced.
Mr. Rowen testified that he
has produced everything he has in response to plaintiffs’
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discovery requests; he testified that he provided some documents
at his first deposition session and provided some additional
documents at his second deposition session; he testified that, at
this point, he has produced everything he has.
Even if ordered
to do so by the Court, he cannot produce what he does not have.
And there is no suggestion that he may have destroyed responsive
documents, intentionally or otherwise.
When it granted the plaintiffs’ motion to compel Mr. Rowen’s
attendance at another deposition session, the Court indicated
that the defendants would be on the hook for the attorneys’ fees
and costs incurred by the Mahers in bringing the motion to compel
and in re-deposing Mr. Rowen.
Once that re-deposition occurs –
which will, by Court order, be by December 17th – the Court will
then be able to determine the exact amount of the award.
then, any award would seem to be premature.
Until
The Court is not
persuaded that further sanctions are warranted at this time.
B.
The Mahers’ Motion for Entry of Judgment
As explained, the Court previously indicated that the
defendants would have to cover the fees and costs associated with
the additional 30(b)(6) deposition session that was, in the
Court’s view, necessitated by Mr. Rowen’s failure to prepare the
first time around.
The Mahers have now filed a motion asking the
Court to enter judgment in their favor in the amount of
$19,063.70.
According to the plaintiffs, this is the “total
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amount of attorneys’ fees, costs and expenses incurred” by
plaintiffs in preparing for and taking Mr. Rowen’s Rule 30(b)(6)
deposition, and in drafting, filing and presenting the motion for
judgment.
Although the Court agrees that it is appropriate for
the defendants to bear these costs, the resolution of this issue
does not result in the entry of any judgment.
The motion is
really more of a sanctions motion, or a motion for fees and
costs.
Ultimately, the Mahers will get another crack at deposing
Mr. Rowen, which means the time spent preparing for the
deposition was not entirely wasted.
end produce what documents he had.
Additionally, he did, in the
The Court agrees that the
defendants should be required to compensate the Mahers to some
extent for their efforts to complete the deposition and obtain
the relevant documents.
Having said that, however, the Court
finds that the current motion is premature.
At the October 11
hearing, the Court set a deadline of December 17th for Mr.
Rowen’s re-deposition.
Until that deposition proceeds, it would
seem that awarding fees and costs now will only require the Court
to revisit the issue again later.
Rather than expend judicial
resources in this piecemeal fashion, the Court is inclined to
wait until the re-deposition proceeds and deal with the sanctions
at that time.
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Conclusion
For the reasons explained more fully above, the Court denies
the plaintiffs’ motion for sanctions [#153], and denies the
plaintiffs’ motion for entry of judgment [#151].
At some point,
the Court will award fees and costs incurred as a result of Mr.
Rowen’s conduct in connection with his deposition.
But for now
the issue is premature.
Dated: November 12, 2013
ENTER:
_______________________________
ARLANDER KEYS
United States Magistrate Judge
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