Marshall v. GE Marshall Inc et al
Filing
127
OPINION AND ORDER denying 105 Motion to Compel Discovery from dft GE Marshall Inc; granting 108 Motion to Compel Discovery from dft Frank Marshall; granting 109 Motion to Compel Discovery from dfts Clinton, Ross and Roger Marshall and granting 111 Motion to Compel Discovery from Karen Marshall. Signed by Magistrate Judge Andrew P Rodovich on 11/15/12. (kjp)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
HAMMOND DIVISION
CASA M. MARSHALL,
)
)
Plaintiff
)
)
v.
)
)
GE MARSHALL, INC.; M5, INC.;
)
MBIP LLC; TOWER ROAD LLC; JOLIET)
ROAD PROPERTIES LLC; CRCFR
)
PROPERTIES LLC; FRANK A.
)
MARSHALL; CLINTON E. MARSHALL; )
ROGER W. MARSHALL; ROSS J.
)
MARSHALL, individually and in
)
their official capacities as an )
officer director and/or
)
shareholder of GE Marshall Inc, )
M5 Inc., MBIP LLC, Tower Road
)
LLC, Joliet Road Properties LLC,)
CRCFR Properties LLC, and as a )
beneficiary of the Glen E.
)
Marshall Marital Trust; MARIE
)
MARSHALL, as Trustee of the Glen)
E. Marshall Marital Trust; KAREN)
MARSHALL, as beneficiary of the )
Glen E. Marshall Marital Trust, )
)
Defendants
)
CIVIL NO. 2:09 cv 198
OPINION AND ORDER
This matter is before the court on the Motion to Compel
Discovery From Defendant, G.E. Marshall, Inc. [DE 105]; the
Motion to Compel Discovery from Defendant Frank Marshall [DE
108]; the Motion to Compel Discovery from Defendants Clinton
Marshall, Ross Marshall and Roger Marshall [DE 109]; and the
Motion to Compel Discovery from Defendant Karen Marshall [DE 111]
all filed by the plaintiff, Casa M. Marshall, on August 24, 2012.
For the reasons set forth below, the Motion to Compel Discovery
From Defendant, G.E. Marshall, Inc. [DE 105] is DENIED, the
Motion to Compel Discovery from Defendant Frank Marshall [DE 108]
is GRANTED, the Motion to Compel Discovery from Defendants
Clinton Marshall, Ross Marshall and Roger Marshall [DE 109] is
GRANTED, and the Motion to Compel Discovery from Defendant Karen
Marshall [DE 111] is GRANTED.
Background
The plaintiff, Casa M. Marshall, was an officer, director,
and minority shareholder of G.E. Marshall, Inc., from 2003 until
she was terminated in 2008, and was the only female to hold these
positions.
Casa was diagnosed with a brain tumor, forcing her to
take FMLA leave to receive treatment.
She subsequently was
served with a warning to return to work.
Casa alleges she exper-
ienced a series of adverse employment actions when she returned,
including revocation of certain authorities.
Casa complains that
the defendants withheld corporate information from her, threatened her, and intimidated her.
On October 10, 2007, the defen-
dants offered to buy out Casa’s interest in G.E. Marshall, Inc.,
Joliet Road Properties, LLC, and CRCFR Properties, LLC.
Casa
alleges that the buy-out offer was not made in good faith and was
based on discounted five year old values, arbitrary non-valuation
opinions, and conjecture.
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While employed at G.E. Marshall, Casa complained about her
working conditions and was threatened that she would be terminated if she were to file a complaint with the Equal Employment
Opportunity Commission or Indiana Civil Rights Commission.
She
ultimately was terminated on January 14, 2008, and subsequently
filed a charge of discrimination with the EEOC.
Casa was issued
a Notice of Right to Sue letter on March 30, 2009.
On February
28, 2011, Casa filed a seven-count amended complaint alleging:
(1) gender discrimination; (2) age discrimination; (3) violation
of the ADA; (4) Title VII Retaliation; (5) violation of the
Family and Medical Leave Act of 1993; (6) Breach of Fiduciary
Duty to Minority Shareholder; and (7) Breach of Duty of Good
Faith and Fair Dealing.
On February 3, 2012, Casa served the defendants with two
subpoenas – one directed to Commercial Advantage, Inc. and the
other directed to BKD, LLP - both of which held personal financial documents belonging to the defendants.
to quash the subpoenas.
The defendants moved
On June 20, 2012, the court denied the
motion to quash, explaining that the information sought might
reveal evidence that the defendants devalued the company, made a
bad faith buy-out offer, and discriminated against Casa.
The
court directed the defendants to turn over their personal information, including tax returns, estate planning documents, and
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other personal financial information.
Karen Marshall asked the
court to reconsider the order as it applied to her, arguing that
her personal financial information was irrelevant because she was
sued only in her capacity as a beneficiary to the Glen E. Marshall Trust and did not participate in any of the management
decisions.
The court denied Karen’s motion on October 10, 2012.
On July 12 and July 25, 2011, respectively, Casa propounded
her first set of interrogatories and requests for production on
G.E. Marshall, Inc. ("GEMI") and M5, Inc.
GEMI and M5 responded
on September 30, 2011, but Casa found the responses to some of
the interrogatories and requests for production incomplete and
evasive.
The parties engaged in a discussion to resolve their
discovery dispute.
GEMI and M5 represent that they offered to
make their financial records available, but Casa never made an
appointment to review the records.
Casa represents that only
GEMI made its financial documents available, but that M5 offered
no such accommodation.
During the course of the parties’ discussions, GEMI and M5
informed Casa that they did not believe that any of her document
requests were relevant to the subject matter but stated they
would work to provide detailed responses.
On June 25, 2012, Casa
communicated to GEMI and M5 the reasons she believed her discovery requests were relevant.
Specifically, Casa explained that
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the financial condition of GEMI, the net worth of GEMI, whether
the defendants siphoned money and reduced the value of GEMI, and
the amounts and frequency of any payments received by any of the
defendants from GEMI that Casa did not receive would serve as
evidence that the defendants engaged in self-dealing transactions
and breached their fiduciary duties and that the buy-out the
defendants offered was based on discounted five year old values.
Casa’s June 25, 2012 letter also explained that the requests were
relevant to her claims for discrimination and that GEMI payroll
and paycheck histories for any Marshall grandchildren may provide
evidence that the defendants improperly siphoned money from GEMI
and reduced the value.
As of the date Casa filed her motion,
GEMI and M5 objected to or failed to respond to certain interrogatories and numerous requests for production.
On July 13, 2011, Casa also served Frank, Clinton, Ross, and
Roger Marshall, the Marshall brothers, with her first set of
interrogatories and request for production of documents.
On
September 30, 2011, the Marshall brothers served their responses.
Casa found their responses incomplete and evasive, explaining
that they objected to and wholly failed to answer certain interrogatories and requests for production.
The parties discussed
the discovery requests, and on July 27, 2012, the Marshall
Brothers’ counsel stated that they were invoking the Fifth
5
Amendment right against self-incrimination with regard to the
request for their federal and state tax returns.
The parties
have been unable to reach an agreement.
Casa also served Karen Marshall, beneficiary of the Glen E.
Marshall Marital Trust, with interrogatories and requests for
production on May 25, 2012. Karen told Casa to expect discovery
responses by July 13, 2012, but Casa did not receive the responses by this date.
The parties discussed the production of
the discovery responses, and Karen responded that she would not
provide discovery responses because it was her position that the
requests were propounded upon her in her individual capacity and
not as a beneficiary to the Glen E. Marshall Marital Trust, the
capacity in which she was sued.
Karen informed Casa that she
would not serve responses until the court ruled on her motion to
reconsider the court’s June 20, 2010 Opinion and Order denying
the defendants’ motion to quash.
Casa now moves to compel the defendants to provide complete
and non-evasive answers to her interrogatories and requests for
production.
Discussion
A party may "obtain discovery regarding any matter, not
privileged, that is relevant to the claim or defense of any
party, including the existence, description, nature, custody,
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condition and location of any books, documents, or other tangible
things."
Federal Rule of Civil Procedure 26(b)(1).
For discov-
ery purposes, relevancy is construed 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."
Chavez v. DaimlerChrysler Corp., 206 F.R.D. 615, 619
(S.D. Ind. 2002)(quoting Oppenheimer Fund, Inc. v. Sanders, 437
U.S. 340, 351, 98 S.Ct. 2380, 2389, 57 L.Ed.2d 253 (1978)).
Even
when information is not directly related to the claims or defenses identified in the pleadings, the information still may be
relevant to the broader subject matter at hand and meet the
rule’s good cause standard. Borom v. Town of Merrillville, 2009
WL 1617085, *1 (N.D. Ind. June 8, 2009) (citing Sanyo Laser
Prods., Inc. v. Arista Records, Inc., 214 F.R.D. 496, 502 (S.D.
Ind. 2003)).
See also Adams v. Target, 2001 WL 987853, *1 (S.D.
Ind. July 30, 2001)("For good cause, the court may order discovery of any matter relevant to the subject matter involved in the
action."); Shapo v. Engle, 2001 WL 629303, *2 (N.D. Ill. May 25,
2001)("Discovery is a search for the truth.").
A party may seek an order to compel discovery when an
opposing party fails to respond to discovery requests or has
provided evasive or incomplete responses.
Procedure 37(a)(2)-(3).
Federal Rule of Civil
The burden "rests upon the objecting
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party to show why a particular discovery request is improper."
Gregg v. Local 305 IBEW, 2009 WL 1325103, *8 (N.D. Ind. May 13,
2009)(citing Kodish v. Oakbrook Terrace Fire Protection Dist.,
235 F.R.D. 447, 449-50 (N.D. Ill. 2006)); McGrath v. Everest Nat.
Ins. Co., 2009 WL 1325405, *3 (N.D. Ind. May 13, 2009)(internal
citations omitted); Carlson Restaurants Worldwide, Inc. v.
Hammond Professional Cleaning Services, 2009 WL 692224, *5 (N.D.
Ind. March 12, 2009)(internal citations omitted).
The objecting
party must show with specificity that the request is improper.
Cunningham v. Smithkline Beecham, 255 F.R.D. 474, 478 (N.D. Ind.
2009)(citing Graham v. Casey’s General Stores, 206 F.R.D. 253,
254 (S.D. Ind. 2002)).
That burden cannot be met by "a reflexive
invocation of the same baseless, often abused litany that the
requested discovery is vague, ambiguous, overly broad, unduly
burdensome or that it is neither relevant nor reasonably calculated to lead to the discovery of admissible evidence."
Cunning-
ham, 255 F.R.D. at 478 (citing Burkybile v. Mitsubishi Motors
Corp., 2006 WL 2325506, *6 (N.D. Ill. Aug. 2, 2006))(internal
quotations and citations omitted).
Rather, the court, under its
broad discretion, considers "the totality of the circumstances,
weighing the value of material sought against the burden of
providing it, and taking into account society’s interest in
furthering the truth-seeking function in the particular case
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before the court."
Berning v. UAW Local 2209, 242 F.R.D. 510,
512 (N.D. Ind. 2007)(examining Patterson v. Avery Dennison Corp.,
281 F.3d 676, 681 (7th Cir. 2002))(internal quotations and citations omitted).
See also Hunt v. DaVita, Inc., 680 F.3d 775, 780
(7th Cir. 2012)(explaining that the district court has broad
discretion in supervising discovery).
When a party files a discovery motion, she must submit a
certification explaining her good faith efforts to confer and
resolve the discovery dispute without seeking court intervention.
Rule 37(a)(1); Local Rule 37.1.
The requirement to meet-and-
confer must be taken seriously, because the court must find that
the parties made a good faith effort to resolve the dispute
before the court can rule on the merits of the motion. See
Robinson v. Potter, 453 F.3d 990, 994–95 (8th Cir. 2006) (citing
Naviant Mktg. Solutions, Inc. v. Larry Tucker, Inc., 339 F.3d
180, 186 (3rd Cir. 2003)).
See Shoppell v. Schrader, 2009 WL
2515817, *1 (N.D. Ind. August 13, 2009) (finding good faith
certification of a single letter and a brief telephone conversation inadequate).
"Fed.R.Civ.P. 37(a) envisions a genuine
two-way communication where the parties engage in a meaningful
dialogue to resolve the issues without judicial intervention."
Forest River Housing, Inc. v. Patriot Homes, Inc., 2007 WL
9
1376289 (N.D. Ind. May 7, 2007) (citing Shuffle Master, Inc. v.
Progressive Games, Inc., 170 F.R.D. 166, 171 (D.C. Nev. 1996)).
Courts have broad discretion in determining whether the
moving party has satisfied the meet-and-confer component of Rule
37(a)(1) and Local Rule 37.1.
Mintel Intern. Group, Ltd. v.
Neerghen, 2008 WL 4936745, *1 (N.D. Ill. Nov. 17, 2008).
In
making this determination, the court will consider the totality
of the circumstances. Kidwiler v. Progressive Paloverde Ins. Co.,
192 F.R.D. 193 (N.D. W.Va. 2000). One correspondence can meet
this requirement when it is detailed and continued contact likely
would not have been successful in resolving the discovery dispute. Kidwiler, 192 F.R.D. at 198. See also Alloc, Inc. v. Unilin
Beheer B.V., 2006 WL 757871, *1 (E.D. Wis. March 24, 2006)
(finding that several letters exchanged between the two parties
satisfied the meet and confer requirement of Rule 37).
On the
other hand, several correspondences may fail to meet Rule 37's
standard if the court determines that the correspondences were
not genuine two-way communications involving a meaningful dialogue.
The communication specifically must address the conflict
and appear to involve meaningful negotiations.
Housing, 2007 WL 1376289 at *1.
Forest River
The motion should be denied
where it is obvious that the parties did not engage in a meaningful dialogue, particularly where the non-moving party shows a
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willingness to compromise.
1376289 at *1-2.
See Forest River Housing, 2007 WL
Failure to confer after discovery has been
supplemented may be detrimental to the moving party’s request.
Design Basics, Inc. v. Granite Ridge Builders, Inc., 2007 WL
1830809, *2 (N.D. Ind. June 21, 2007) (denying motion to compel
where it was apparent that the plaintiff did not confer with
defendant after the defendant supplemented its discovery responses).
Casa first asks the court to compel GEMI to produce documents concerning its corporate, organizational structure, bylaws,
meeting minutes, corporate resolutions, record of shareholders,
officers and directors, GEMI real estate mortgages, documents
related to any civil, criminal, or administrative proceeding to
which GEMI was a party, documents related to any other companies,
corporations, partnerships or other business entities that GEMI
has formed or been a member, documents of GEMI’s financial stake
in defendants Tower Road and MBIP, valuation of GEMI, M5, MBIP,
Tower Road, Joliet Road Properties, and CRCFR Properties, appraisals of real property in which GEMI, Joliet, and CRCFR
Properties have an interest, appraisals for real estate holdings
of GEMI, accounting or audits performed by GEMI, and forecasts
and actual sales and revenue of GEMI.
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Casa has made a similar
request from M5, seeking documents concerning its organization
and assets.
GEMI and M5 responded that they agreed to make their financial records available for Casa to inspect.
However, Casa
ignored their offer and never scheduled an appointment to review
the documents.
GEMI and M5 also state that Casa’s counsel would
have had access to GEMI’s bookkeeper’s office who manages the
annual audit of GEMI and M5 and the office manager’s office where
the human resource documents and miscellaneous documents regarding the business of GEMI and M5 are stored.
Casa acknowledges
that GEMI agreed to make its financial records available, but
complains both that M5 never made such an offer and that the
financial data that has been offered for inspection will not
encompass all of her discovery requests.
Casa has provided no explanation why she did not accept
GEMI’s offer and inspect the documents before determining what
discovery requests remain unanswered.
The record reflects that
documents in addition to GEMI’s financial records may have been
ascertainable had Casa accepted GEMI’s offer and inspected the
records.
GEMI and M5 represent that audit and general business
documents were maintained in the bookkeeper’s and officer
manager’s office.
GEMI and M5 were willing to negotiate and
accommodate some of Casa’s discovery requests, yet she failed to
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accept this invitation without explanation.
Rule 37 demands a
meaningful negotiation with an eye on resolving the issues.
Given GEMI and M5's willingness to open up its files, it does not
appear that Casa engaged in the negotiations in good faith, and
she certainly did not take advantage of the opportunity to retain
responses to some of her discovery requests before seeking court
intervention.
The record reflects that the parties could have
reached an agreement on many, if not all of the issues, if Casa
was willing to accept GEMI’s terms.
The proper course would have
been for Casa to accept GEMI’s invitation, review its documents,
and then seek court intervention for any discovery requests that
remained outstanding after further efforts to resolve the issues.
Moreover, GEMI and M5 agreed to supplement their responses
by opening up their files for inspection.
The failure to meet
and confer after a party supplements its discovery responses may
be detrimental to the moving party’s motion to compel.
Basics, 2007 WL 1830809 at *2.
Design
Failure to take advantage of an
opportunity to obtain the outstanding discovery is contrary to
the spirit of Rule 37 and does not satisfy the good faith meet
and confer standard.
For these reasons, the court finds that
Casa did not fulfill her obligations under Rule 37 because she
did not engage in the negotiations in good faith and with the
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intent to resolve the outstanding discovery dispute absent court
intervention.
Casa next asks the court to compel Frank, Clinton, Ross, and
Roger Marshall to respond to two interrogatories, which asks the
brothers to identify any company or business entity from which
they received a salary or income and to reveal their gross and
net incomes from 2003 through 2011.
Casa also seeks the Marshall
brothers’ pay stubs, W-2 and 1099 forms, federal tax returns
including schedules and attachments, financial resources, bank
accounts, shares and stock certificates, limited liability and
corporations formed or created, partnerships and business affiliations, agreements, leases, real estate contracts, appraisals of
the defendants’ business entities, and life insurance policies.
Casa first informs the court that the Marshall brothers
raised their Fifth Amendment right against self incrimination in
response to her request to produce their state and federal tax
returns.
In their response brief, the Marshall brothers do not
address this objection.
It is the opposing party’s duty to show
why discovery requests are privileged, and by failing to respond,
the Marshall brothers waived this objection.
See Wright v.
United States, 139 F.3d 551, 553 (7th Cir. 1998)(explaining that
arguments not raised in initial brief are considered waived).
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The Marshall brothers next object to the discovery requests
because Casa could have obtained much of the information she
sought by accessing GEMI and M5's corporate records as GEMI
offered.
However, much of the information Casa requested was
personal to the Marshall brothers and may not be revealed by
review of GEMI and M5's records.
Specifically, Casa requests the
Marshall brothers’ individual tax returns, business interests,
pay stubs, and additional personal financial information.
Although GEMI and M5's financial documents may show payments they
made to the Marshall brothers, it would not be in possession of
all of the Marshall brothers’ personal information, specifically
information that derives from other sources, including other
defendant business entities.
For this reason, it is not clear to
the court how the Marshall brothers’ personal financial information would be redundant of Casa’s request for GEMI and M5's
financial and organizational documents, nor have the Marshall
brothers satisfied their burden to show that the information
would be redundant and outside the scope of discovery.
In fact,
the court previously ruled that the individual defendants’ personal information may be relevant to prove that the defendants
devalued the company, made a bad faith buy-out offer, and discriminated against Casa.
Because the Marshall brothers have not
established that the discovery requests are shielded by privilege
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or redundant of the information requested from GEMI, Casa’s
motion to compel discovery responses from the Marshall brothers
is granted.
Casa also served interrogatories and requests for production
on Karen Marshall.
After several extensions of time, Karen
informed Casa that she would not send her responses until after
the court ruled on her motion to reconsider the June 20, 2012
Opinion and Order.
Karen has objected to the interrogatories and
requests for production, arguing that they were served upon her
as an individual and not in the manner which she was sued, as a
beneficiary of the Glen E. Marshall Marital Trust.
Karen is correct that the interrogatories and requests for
production did not specifically name her as the beneficiary of
the Glen E. Marshall Trust and that non-parties cannot be served
with interrogatories and requests for production.
However, it
can be inferred that Casa intended to serve Karen in the capacity
in which she was sued.
It would be futile to require Casa to
serve an identical set of interrogatories and requests for production adding only that the discovery is directed to Karen, as
beneficiary of the Glen E. Marshall Trust.
The court previously
ordered that Karen was not shielded from discovery of her personal information solely because of the capacity in which she was
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sued, as was explained more thoroughly in the court’s order on
Karen’s motion to reconsider.
Karen has not demonstrated that the information sought in
Casa’s interrogatories and requests for production are shielded
from discovery because of the capacity in which she was sued and
further admits that she was waiting to serve responses pending
the court’s order on her motion to reconsider.
The court denied
her motion and has twice directed Karen to participate in discovery and explained why her responses are relevant and must be
produced.
Because Karen has not offered an alternative explana-
tion to show why she should not be compelled to produce responses
to the outstanding discovery requests, Casa’s motion to compel
discovery responses from Karen is granted.
_______________
Based on the foregoing, the Motion to Compel Discovery From
Defendant, G.E. Marshall, Inc. [DE 105] filed on August 24, 2012,
is DENIED; the Motion to Compel Discovery from Defendant Frank
Marshall [DE 108] filed on August 24, 2012, is GRANTED; the
Motion to Compel Discovery from Defendants Clinton Marshall, Ross
Marshall and Roger Marshall [DE 109] filed on August 24, 2012, is
GRANTED; and the Motion to Compel Discovery from Defendant Karen
Marshall [DE 111] filed on August 24, 2012, is GRANTED.
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ENTERED this 15th day of November, 2012
s/ ANDREW P. RODOVICH
United States Magistrate Judge
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