Design Basics, LLC et al v. Ahmann Companies Inc et al

Filing 59

ORDER denying 46 Motion to Compel Inspection of Defendants Plan Inventory/Project Files. See text of Order for details. Signed by Magistrate Judge Kelly Mahoney on 3/2/17. (djs)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF IOWA
EASTERN DIVISION
DESIGN BASICS, LLC and
PLAN PROS, INC.,
Plaintiffs,

No. 16-CV-0015-LRR

vs.

ORDER

AHMANN DESIGN, INC.,
AHMANN HOME PLANS, INC.,
JOSEPH GERARD AHMANN,
and DONNA L. AHMANN,
Defendants.
____________________
On February 17, 2017, this matter came before the court for a telephonic hearing
on Plaintiffs’ Motion to Complete Inspection of Defendants’ Plan Inventory/Project Files
(Doc. 46) (Continued Inspection Motion).

Plaintiffs were represented by Michael T.

Hopkins and Dana A. LeJune. Defendants were represented by Matthew Novak. At
the conclusion of the telephonic hearing, I denied the motion on the grounds that any
relevance of the requested discovery is outweighed by the burden, primarily from
extension of deadlines and delay of trial, that would occur from allowing additional
inspection of Defendants’ documents. For the reasons both stated on the record and in
this Order, the Continued Inspection Motion (Doc. 46) is denied.
I.

PROCEDURAL BACKGROUND

Plaintiffs Design Basics, LLC and Plan Pros, Inc. (collectively Design Basics)
filed an Amended Complaint on March 18, 2016.

Doc. 22.

Defendants Ahmann

Design, Inc.; Ahmann Home Plans, Inc.; Joseph Gerrard Ahmann; and Donna L.

Ahmann (collectively Ahmann) filed an Answer on March 31, 2016, denying Design
Basics’ claims. Doc. 25. At issue in this case is Design Basics’ claims that fourteen
of Ahmann’s stock plans infringe on copyrights of eight Design Basics’ plans. Doc. 22
¶ 20. On May 6, 2016, the court issued a scheduling order, which set the deadline for
completing discovery as February 20, 2017, and the dispositive motions deadline as
March 20, 2017.

Doc. 26.

The trial management order, issued May 9, 2016,

scheduled trial for July 24, 2017.1 Doc. 28. These orders remain in effect; the parties
have not requested an extension of the deadlines or to continue trial. The deadline to
amend the complaint expired on December 5, 2016. Doc. 26.
On August 10, 2016, the Honorable Jon S. Scoles issued an Order Regarding
Discovery (Doc. 43), granting Design Basics a “limited opportunity” to inspect
documents related to custom plans designed by Ahmann. The court allowed Design
Basics to examine those documents to determine whether they contained any evidence of
copyright infringement. The court specifically noted that the sole item of evidence that
supported Design Basics’ claim that Ahmann’s custom plans infringed on Design Basics
copyrights was an email from Mike Sattler to an Ahmann representative in February 2010
(Sattler email) that indicated Ahmann had altered a Design Basics plan. Doc. 43. The
court stated, “Whether any additional inspection will be permitted may depend on what
evidence, if any, is discovered in the first inspection.” Doc. 43.
Design Basics first contacted Ahmann to schedule the inspection on December 7,
2016, nearly four months after the court’s order allowing inspection.

During the

inspection, which occurred on December 15, 2016, a Design Basics representative
examined nine of approximately 90 to 100 boxes. Nearly one month later, on January
13, 2017, Design Basics requested copies of specific documents from that inspection and
obtained the copies around January 25, 2017. According to Ahmann’s counsel, of the
1

I noted the pending deadlines and trial date at the beginning of the telephonic hearing on the
Continued Inspection Motion but later during the hearing referred to the trial date as May 24,
rather than July 24. That misstatement does not affect my order in this case.
2

approximately 750 to 1,000 files that the representative examined, he located four items:
two marketing sheets and two plans. The next apparent contact regarding a continued
inspection occurred when Design Basics’ counsel emailed Ahmann’s counsel at 4:42 p.m.
on Saturday, January 28, 2017. In that email, Design Basics’ counsel included a draft
of the Continued Inspection Motion (which was drafted quite similarly to a motion to
compel discovery) and requested a response by the close of business on Monday, January
30, 2017. The parties were unable to agree on a continued inspection of documents,
and Design Basics filed the Continued Inspection Motion on February 1, 2017. Ahmann
filed a timely resistance to the motion (Doc. 47) on February 13, 2017, and Design Basics
filed a timely reply (Doc. 57) on February 16, 2017.
II. DISCUSSION
“Mutual knowledge of all the relevant facts gathered by both parties is essential to
proper litigation.” Hickman v. Taylor, 329 U.S. 495, 507 (1947).
Parties may obtain discovery regarding any nonprivileged matter that is
relevant to any party’s claim or defense and proportional to the needs of the
case, considering the importance of the issues at stake in the action, the
amount in controversy, the parties’ relative access to relevant information,
the parties’ resources, the importance of the discovery in resolving the
issues, and whether the burden or expense of the proposed discovery
outweighs its likely benefit.
Fed. R. Civ. P. 26(b)(1). “Discovery requests are typically deemed relevant if there is
any possibility that the information sought is relevant to any issue in the case.”

Kampfe

v. Petsmart, Inc., 304 F.R.D. 554, 557 (N.D. Iowa 2015). To sustain a relevance
objection to requested discovery, the party must show that the requested information falls
outside “the broad scope of relevance” under Federal Rule of Civil Procedure 26(b)(1)
or that the potential burden of providing the discovery outweighs the requested
information’s marginal relevance.

St. Paul Reins. Co. v. Commercial Fin. Corp., 198

F.R.D. 508, 511 (N.D. Iowa 2000). Courts are required to issue scheduling orders that
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limit the time, among other things, to complete discovery and file motions. Fed. R.
Civ. P. 16(b)(1) & (3)(A). A court is required to limit discovery if it finds that “the
discovery sought is unreasonably cummulative or duplicative . . . [or that] the party
seeking discovery had ample opportunity to obtain the information by discovery in the
action.” Fed. R. Civ. P. 26(b)(2)(C)(ii).
In this case, the burden of allowing the continued inspection of Ahmann’s customplan documents outweighs any relevance the documents may present. Design Basics is
seeking to complete inspection of approximately 90 boxes that likely contain tens of
thousands of documents. The initial inspection of nine boxes of documents resulted in
Design Basics locating documents that have some relevance to the case. The Design
Basics’ representative, Carl Cuozzo, found copies of Design Basics plans, some of which
included redlined changes, and construction drawings for an Ahmann plan that closely
resembles a Design Basics plan. Cuozzo located thirty-four Ahmann custom plans that
he believes infringe on five of the Design Basics plans listed in the Amended Complaint.
These Ahmann custom plans identified by Cuozzo do not involve the fourteen Ahmann
stock plans at issue under the Amended Complaint. It appears the primary relevance of
the documents would be toward additional claims of copyright infringement.

The

deadline for amending the complaint expired in December. Therefore, such relevance
no longer exists at this stage of the proceedings. The documents’ remaining relevance
for discovery purposes goes to potential damages2 and the general actions of Ahmann in
drafting plans. That relevance is strongly outweighed by the likely delays (discussed
further below) that would result from allowing the continued inspection.
In addition, the delay by Design Basics in seeking to inspect Ahmann’s documents
has contributed to the disproportionality of the requested continued inspection. Counsel
for Design Basics indicated there was some delay in finding availability of a
2

At the hearing, Design Basics argued that the discovered information is relevant to proof of
damages, but as noted by Ahmann, they did not raise this argument in their written Motion to
Complete Inspection.
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representative to conduct the initial inspection. Counsel acknowledged, however, that
they could have moved more quickly in scheduling the initial inspection. They provided
no reasonable justification for waiting until December to schedule the inspection or for
the additional delay of nearly one month to request copies of documents located during
that inspection. In a similar vein, Attorney LeJune noted during the telephonic hearing,
which occurred the Friday prior to the Monday deadline to complete discovery, that
Design Basics intended to pursue additional discovery, including seeking to depose and
obtain documents from a former Ahmann draftsman and requesting a search of emails of
an Ahmann customer. This case has been pending for nearly one year, and the parties
were aware of the deadlines set by the court in May 2016. The failure by Design Basics
to diligently pursue discovery 3 does not justify allowing their continued inspection of
Ahmann’s documents.
Furthermore, allowing the continued inspection would most likely result in a delay
of filing dispositive motions and of the trial date. Ahmann’s counsel stated during the
telephonic hearing that the defense is waiting for the close of discovery to file dispositive
motions and that allowing additional inspection would result in essentially reopening
discovery. It appears that allowing Design Basics to continue the inspection would result
in Ahmann seeking to conduct additional discovery to dispute claims and issues raised by
Design Basics. As an example, Design Basics’ attorney, Mr. LeJune, cited to the Sattler
email and its incriminating nature in the Continued Inspection Motion.
2 n.1.

See Doc. 46 at

Ahmann’s counsel provided information that Sattler had purchased the

construction license for the plan discussed in the Sattler email, which meant that Ahmann
3

I also have concerns with the manner in which counsel for Design Basics has engaged in
discovery in this case. During the telephonic hearing, Attorney LeJune acknowledged that he
intentionally failed to provide notice to Ahmann’s counsel of subpoenas to non-party witnesses
for depositions and the production of documents until a week after the witnesses had been served.
Such conduct is contrary to Federal Rule of Civil Procedure 45(a)(4), which requires advance
notice and providing a copy of the subpoena to opposing counsel before the subpoena is served.
It demonstrates a failure on the part of Design Basics’ counsel to act in good faith in conducting
discovery in this case.
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did not infringe on Design Basics’ copyright with that plan. Design Basics’ counsel
acknowledged in their reply (Doc. 57) that this was true but contends they were unaware
of that information at the time of the proceedings when Judge Scoles allowed the initial
inspection. It was only after Design Basics raised this issue that Ahmann was able to
investigate and obtain information that completely contradicted Design Basics’ position.
This information further undermines Design Basics’ relevance claims. It further shows
that the requested discovery would necessitate extended deadlines for discovery and filing
of dispositive motions and a continuance of the trial date. The likely delays that would
result from allowing a continued inspection far outweigh any relevance that would come
from the continued discovery.
III.

CONCLUSION

For the reasons stated on the record during the telephonic hearing on February 17,
2017, and the reasons stated above, Plaintiff’s Motion to Complete Inspection of
Defendants’ Plan Inventory/Project Files (Doc. 46) is denied.
IT IS SO ORDERED this 2nd day of March, 2017.

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