Bettis et al v. Hall et al

Filing 217

ORDER granting 211 plaintiffs' motion to compel discovery. Signed by Magistrate Judge James P. O'Hara on 03/19/2015. (mb)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
TONY BETTIS, et al.,
Plaintiffs,
v.

Case No. 10-2457-JAR

GARY L. HALL, et al.,
Defendants.

ORDER
Following a jury trial in this breach-of-contract case, final judgment was entered
in 2012 against defendant Gary L. Hall, awarding plaintiffs $302,000, plus costs.1
Defendant failed to pay the judgment in full.

Subsequently, plaintiffs served post-

judgment discovery to gather information regarding defendant’s assets with which to
execute and satisfy the judgment. Because defendant failed to adequately respond to the
discovery, plaintiffs filed a motion to compel on February 19, 2015. The matter is
currently before the undersigned U.S. Magistrate Judge, James P. O’Hara, on plaintiffs’
motion to compel and for sanctions (ECF doc. 211).
Since judgment was entered against defendant, plaintiffs have attempted to collect
the judgment via writs of garnishment,2 subpoenas of third-parties’ records,3 a motion for

1

ECF docs. 145 and 157.

2

ECF docs. 168, 174, 185, 187, and 192.

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issuance of charging orders,4 and registration of the judgment in other states. Yet,
plaintiffs have not been able to identify assets sufficient to satisfy the judgment.
In a continued effort to identify such assets, plaintiffs served discovery in aid of
execution on June 5, 2014.5 On July 2, 2014, defendant moved for a two-week extension
of time to respond to the discovery.6 Plaintiffs later agreed to stay the due date for
responses to the discovery in exchange for defendant’s promise to make monthly
payments and to pay off the judgment in full by December 31, 2014. Although defendant
made partial payments toward the judgment in August and September 2014, his October
2014 payment was returned unpaid for insufficient funds. That payment was eventually
paid along with the November 2014 payment. However, defendant failed to make the
last promised payment of approximately $128,000 by December 31, 2014. Subsequently,
defendant asked that plaintiffs accept smaller monthly payments and delay the deadline
for his discovery responses. Plaintiffs declined, explaining that “due to Mr. Hall’s history
of failing to make payments, [they] could not accept unsecured promises and agree to
further delay in identifying Mr. Hall’s assets.”7

3

ECF docs. 191 and 196.

4

ECF doc. 200.

5

ECF doc. 205.

6

ECF doc. 206.

7

ECF doc. 212 at 2.

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On January 20, 2015, defendant served his answers to the discovery in aid of
execution.8 Plaintiffs assert that defendant failed to provide any of the information
requested and did not identify or attach a single document. Instead, plaintiffs claim that
defendant responded with “vague boilerplate objections.”9 Therefore, plaintiffs filed a
motion seeking to compel defendant to fully respond to the discovery requests.
Fed. R. Civ. P. 26(b)(1) provides that generally the scope of discovery is limited to
the parties’ pleaded claims and defenses, but that “[f]or good cause, the court may order
discovery of any matter relevant to the subject matter involved in the action.” When a
party files a motion to compel and asks the court to overrule objections, the objecting
party must specifically show in its response to the motion how each discovery request is
objectionable.10 Objections initially raised but not supported in response to the motion to
compel are deemed abandoned.11 However, if the discovery requests appear facially
objectionable in that they are overly broad or seek information that does not appear
relevant, the burden is on the movant to demonstrate how the requests are not

8

ECF doc. 210.

9

ECF doc. 211 at 2.

10

Sonnino v. Univ. of Kan. Hosp. Auth., 221 F.R.D. 661, 670-71 (D. Kan. 2004).

11

In re Bank of Amer. Wage & Emp’t Practices Litig., 275 F.R.D. 534, 538 (D. Kan.
2011).
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objectionable.12 With these standards in mind, the court addresses defendant’s objections
and responses to the disputed requests.
I.

General Objections
Defendant made six general objections in response to plaintiffs’ interrogatories

and eight general objections in response to plaintiffs’ requests for production.13 In the
District of Kansas, general objections are considered “overly broad and worthless unless
the objections are substantiated with detailed explanations.”14 Our courts disapprove of
the practice of asserting a general objection “to the extent” it may apply to particular
requests for discovery.15 Defendant, as the party resisting discovery, has the burden of
supporting all of his objections, including his general objections.16 The court finds that
defendant has made no meaningful effort to show how any of the general objections
apply to a specific request. Most of defendant’s general objections are listed “to the
extent” that they apply to any of the discovery requests, rendering them meaningless and
hypothetical because they are not applied to specific requests. Although defendant now

12

Id.

13

See ECF docs. 211-1 and 211-2.

14

Terracon Consultants Inc. v. Drash, No. 12-2345, 2013 WL 1633572, at *1 (D. Kan.
Apr. 16, 2013).
15

See Swackhammer v. Sprint Corp. PCS, 225 F.R.D. 658, 660-61 (D. Kan. 2004).

16

High Point SARL v. Sprint Nextel Corp., No. 09-2269, 2011 WL 4036424, at *10
(D. Kan. Sept. 12, 2001) (citing Johnson v. Kraft Foods N. Am., Inc., 236 F.R.D. 535,
538 (D. Kan. 2006)).
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attempts to “withdraw” the general objections in his response, the court still finds that
defendant’s “general objections” are overruled.
II.

Objections to Requests
As earlier explained, when ruling upon a motion to compel, the court generally

considers those objections which have been timely asserted and relied upon in response
to the motion. The court generally deems objections initially raised but not relied upon in
response to the motion as abandoned.17

Because defendant only relies upon three

objections in response to this motion, the court will only address those objections. Other
objections initially raised but not supported in response to the motion to compel are
deemed abandoned.
A.

Location of Production

Plaintiffs served twenty-two requests in their requests for production in aid of
execution.18 Plaintiffs did not receive any documents in response. Instead, defendant
objected to sixteen requests, responded that no documents were available, and/or stated
that certain documents would be made available for inspection and copying at
defendant’s office in Galena, Kansas (about 150 miles south of the Kansas City metro
area, where the case was tried and where both sides’ lawyers have their offices).

17

Sonnino, 221 F.R.D. at 670 (citing Cotracom Commodity Trading Co. v. Seaboard
Corp., 189 F.R.D. 655, 664 (D. Kan. 1999)).
18

Although plaintiffs numbered twenty-four requests, their requests for production did
not include Requests Nos. 20 and 21 (ECF doc. 211-2 at 6).
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Defendant asserts that the primary issue before the court is the location of his
production.

Defendant maintains that he is not objecting to producing documents.

However, defendant refuses to produce documents in plaintiffs’ counsel’s office in
Kansas City, Missouri, as requested. Instead, defendant has offered to produce the
documents in Galena, Kansas where the documents are maintained.

Alternatively,

defendant has offered to put the documents on a disc but only if plaintiffs pay for fifty
percent of the cost to do so. Finally, defendant has offered to make copies of the
documents but only at plaintiffs’ cost. Defendant argues that plaintiffs have failed to cite
any precedent for their request for defendant to produce the documents “over 150 miles
away from their location in another state.”19 Defendant explains that all of the documents
would constitute four to five boxes of records, all of which are maintained in Galena,
Kansas—more than 150 miles away from Kansas City.

Defendant insists that

transportation of the documents would be burdensome and that plaintiffs should pay for
copies to avoid this dispute.
There is a general rule that the responding party should bear the costs of producing
discovery.20 However, our courts have held that under Rule 34, a responding party need
only make requested documents available for inspection and copying—it need not pay

19

ECF doc. 215 at 2.

20

See Cardenas v. Dorel Juvenile Group, Inc., 230 F.R.D. 611, 619 (D. Kan. 2005);
see also Hudson v. AIH Receivable Mgmt. Services, No. 10-2287, 2011 WL 1402224, at
*1 (D. Kan. Apr. 13, 2011).
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the copying costs.21 Plaintiffs argue this case is distinguishable because the discovery at
issue here is discovery in aid of execution. Although plaintiffs admit that Kansas courts
have not addressed this specific issue, they assert that other federal courts have.
Notably, a court in the Western District of North Carolina held that the cost of
producing documents in response to discovery in aid of execution should be borne by the
producing party, noting that the judgment already ordered defendants to pay the costs of
the action.22 The court explained that the documents requested were essential for a just
determination of the defendants’ assets available to satisfy the judgment. Therefore, the
court ordered defendants to pay for the costs of copies to produce documents. Similarly,
in the Middle District of North Carolina, a court held that the expenses of judgment
collection could be assessed against the judgment debtor.23
As defendant cites, “[c]ourts have attempted to place practical restrictions on
parties electing to produce documents as they are kept in the usual course of business.
This customarily consists of balancing the burdens that would be imposed on the
respective parties.”24 In attempting to “balanc[e] the burdens,” the court sides with
21

Cardenas, 230 F.R.D. at 620 (citations omitted).

22

ECF doc. 216 at 2 (citing Atlantic Purchasers, Inc. v. Aircraft Sales, Inc., 101 F.R.D.
779, 780-83 (W.D.N.C. 1984)).
23

Id. (citing Travelers Indem. Co. of Ill. v. Hash Mgmt., Inc., 173 F.R.D. 150, 156
(M.D.N.C. 1997)).
24

ECF doc. 215 at 4 (citing S.E.C. v. Kovzan, No. 11-2017, 2012 WL 3111729, at *9
(D. Kan. July 31, 2012) (citations omitted), overruled in part by S.E.C. v. Kovzan, No.
11-2017, 2012 WL 4819011 (D. Kan. Oct. 10, 2012)).
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plaintiffs. Here, plaintiffs were awarded judgment along with costs almost two years ago.
Since that time, plaintiffs repeatedly have attempted to discover defendant’s assets with
which to execute the judgment. Plaintiffs have compromised with defendant by agreeing
to allow him to postpone discovery responses and make partial payments towards the
judgment.

After failing to make timely payment, defendant’s discovery responses

became due shortly afterward.

Instead of providing meaningful responses though,

defendant responded with general objections along with numerous other objections, and
insisted that plaintiffs share in the cost for him to comply with his discovery obligations.
Plaintiffs then suggested an informal telephone conference with the court to avoid the
additional time and expense of drafting a motion to compel and briefs in response, but
defendant refused. Now, defendant wants plaintiffs to pay for the copying costs before he
produces any responsive information to plaintiffs’ June 2014 discovery requests. Given
the foregoing, the court does not find that plaintiffs’ requests for production are
appropriate for shifting the cost of discovery. Nor has defendant shown compliance with
these discovery requests would be unduly burdensome.

Under these particular

circumstances, the court will follow the general rule that a party should bear the costs of
producing discovery.

Therefore, defendant shall produce copies of all responsive

documents at his own cost no later than March 26, 2015, in Kansas City.
B.

Documents Regarding Donna Hall

Plaintiffs asked for defendant’s most recent financial statement, bank statements,
tax returns, and information about transactions involving real property in Requests for
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Production Nos. 1-3, 9-10, and 12-13. Defendant objected that his wife, Donna Hall, is
not a party to this action. Because defendant only has joint financial statements, bank
statements, tax returns, and real estate holdings with Ms. Hall, he refused to comply with
the requests. In his response, defendant agreed that his financial condition is at issue.
Defendant also admitted that several pages of his joint tax return show income solely
owned by him. However, defendant disagreed that records “which would not reflect
whether an asset is owned by Gary or Donna Hall [are] responsive to the[se]
request[s].”25 Defendant suggested that plaintiffs add Donna Hall as a party to this
dispute and seek information directly from her so that she may object to the production of
her personal financial information. Defendant does not assert privilege or confidentiality
concerns. Essentially, defendant argues that the information sought is irrelevant.
At the discovery stage, relevancy is broadly construed, and a request for discovery
should be considered relevant if there is “any possibility” that the information sought
may be relevant to the claim or defense of any party. 26 When the discovery sought
appears relevant on its face, the party resisting discovery has the burden to establish the
lack of relevance by demonstrating that the requested discovery does not come within the
broad scope of relevance as defined under Rule 26(b)(1), or is of such marginal relevance
that the potential harm the discovery may cause would outweigh the presumption in favor
25

Id. at 5.

26

DIRECTV, Inc. v. Pucinelli, 224 F.R.D. 677, 684 (D. Kan. 2004) (citing McCoy v.
Whirlpool Corp., 214 F.R.D. 642, 643 (D. Kan. 2003)).
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of broad disclosure.27 Conversely, when relevancy is not apparent on the face of the
interrogatory or request, the party seeking the discovery has the burden to show the
relevancy of the information or documents sought.28
Fed. R. Civ. P. 69(a)(2) provides that a judgment creditor “may obtain discovery
from any person—including the judgment debtor—as provided in these rules or by the
procedure of the state where the court is located.” Courts have interpreted the scope of
post-judgment discovery broadly to include the discovery of assets upon which execution
can be made.29

Discovery is also allowed to find out about assets that have been

fraudulently transferred or are beyond the reach of execution, as well as information
“which could reasonably lead to the discovery of concealed or fraudulently transferred
assets.”30 Objections to post-judgment discovery based upon the argument that some of
the judgment debtor’s assets are exempt from execution have not met with approval. 31
The documents plaintiffs seek are relevant on their face. Thus, defendant has the
burden to show the irrelevancy of the information sought. The fact that the responsive
27

Id.

28

Id.

29

See Hartford Fire Ins. Co. v. P & H Cattle Co., No. 05-2001, 2009 WL 2951120, at
*7 (D. Kan. Sept. 10, 2009) (citing Fed. Deposit Ins. Corp. v. LeGrand, 43 F.3d 163, 172
(5th Cir. 1995)).
30

Id. (citations omitted).

31

Id. (citing White v. Gen. Motors Corp., No. 88-2053, 1990 WL 47437, at *1 (D.
Kan. Mar. 13, 1990) (discovery objection that some assets may ultimately prove to be
exempt from execution found to be without merit)).
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documents may contain some irrelevant or non-responsive information is not a valid
reason to withhold them in their entirety. Defendant has failed to meet his burden to
show there is no possibility the information sought may be relevant. Nor has defendant
provided any authority that defendant’s financial information is protected from disclosure
just because it is shared with his wife. Asking plaintiffs to add defendant’s wife as a
party even though they “have no claim against her,”32 and suggesting that Ms. Hall needs
to be brought before the court so the issue can be resolved, appears to be more of a delay
tactic than a valid objection. Although not specifically asserted, if defendant has valid
confidentiality concerns, the court suggests that the parties agree to the entry of a
protective order. However, based on the current record, the court finds that defendant
has failed to meet his burden to support his objections and withhold the disputed
documents. Defendant shall produce responsive documents at his cost no later than
March 26, 2015.
C.

Rule 33(d)

In an effort to locate and identify defendant’s assets, plaintiffs propounded
nineteen interrogatories.

Defendant responded with general objections, specific

objections to seven of the requests, and one or two-word answers to two of the requests.33
Defendant also stated that he would provide documents pursuant to Rule 33(d) in

32

ECF doc. 215 at 5.

33

See ECF doc. 211-1.

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response to Interrogatory Nos. 2-8 and 11-17.

Specifically, defendant instructed

plaintiffs that they could inspect and copy documents at his facility in Galena, Kansas.
Defendant provided no substantive answers in response to any of the interrogatories.
Plaintiffs argue that defendant’s reliance on Rule 33 is unfounded. Plaintiffs
assert that the disputed interrogatories ask for information about “the entities and real
property Mr. Hall owns, Mr. Hall’s debtors, the location of Mr. Hall’s stock certificates,
and banks where Mr. Hall and his entities have accounts.”34 Because defendant is
familiar with these documents, plaintiffs assert that it is improbable that the burden on
defendant to locate the specific information requested is the same as it would be for
plaintiffs to do so. Regardless, plaintiffs complain that defendant has failed to reference
the documents with sufficient detail to allow them to even find the information. And,
plaintiffs point out that no actual documents were produced in response to the
interrogatories.
Defendant responds that plaintiffs’ motion to compel on this point is premature
since plaintiffs have not reviewed the documents yet. Defendant assumes “[s]ince the
burden of determining the requested information is equally on the two parties, plaintiffs
should not be heard to complain.”35

Defendant claims that he has not referred to

production generally. Instead, defendant explains that he has referred to ledgers to reflect

34

ECF doc. 212 at 7.

35

ECF doc. 215 at 6.

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obligations he owes to third parties and operating agreements and corporate records to
show the identity of others involved in his various business entities. Defendant concludes
that the burden is equal. Therefore, defendant argues that he should be allowed to rely on
Rule 33(d) to respond to the interrogatories.
Plaintiffs respond that defendant has only provided broad categories of records,
which do not provide enough detail for plaintiffs to discern answers to their
interrogatories. For example, defendant lists “Articles of Incorporation and Operating
Agreements,” “ledgers,” and “documents concerning the sale, acquisition, and appraisal”
of property, specifying only three categories of records while claiming that these
documents comprise 5,000 pages relevant to twenty-five corporate business entities.
Plaintiffs maintain that defendant’s answers are not in compliance with the letter or spirit
of Rule 33(d) and ask that defendant provide responsive answers.
Fed. R. Civ. P. 33(d) provides:
If the answer to an interrogatory may be determined by examining,
auditing, compiling, abstracting, or summarizing a party’s business records
(including electronically stored information), and if the burden of deriving
or ascertaining the answer will be substantially the same for either party,
the responding party may answer by:
(1) specifying the records that must be reviewed, in sufficient detail to
enable the interrogating party to locate and identify them as readily as
the responding party could; and
(2) giving the interrogating party a reasonable opportunity to examine and
audit the records and to make copies, compilations, abstracts, or
summaries.

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It is well settled in this jurisdiction that a party “may not merely refer” another party to
documents “hoping [the other party] will be able to glean the requested information from
them.”36 “The court generally finds such practice unacceptable.”37
After reviewing defendant’s responses to the disputed interrogatories, the court
finds that defendant has failed to identify responsive documents with the requisite
specificity to enable plaintiffs to locate and identify such documents as required by Rule
33(d). Assuming defendant’s estimate of the volume of documents required to respond is
accurate,38 further details (e.g., date of each document, its identity, and where it can be
located) are necessary to comply with Rule 33(d). Furthermore, defendant has failed to
demonstrate that the burden of deriving the answers to the interrogatories from the broad
categories of documents described is substantially the same for plaintiffs as it is for
defendant. Therefore, defendant is ordered to amend his response to provide answers to
these specific interrogatories or provide copies of the responsive documents with the
requisite detail required by Rule 33(d) (at his cost) by March 26, 2015. If defendant
chooses the latter, he is reminded that he must specifically designate specific records to
permit plaintiffs to readily locate and identify the records from which the answer to the
specific interrogatories can be determined.
36

Johnson v. Kraft Foods N.A., Inc., 236 F.R.D. 535, 545 (D. Kan. 2006) (quoting
DIRECTV, Inc. v. Puccinelli, 224 F.R.D. 677, 680-81 (D. Kan. 2004)).
37

Id. (quoting DIRECTV, Inc., 224 F.R.D. at 680).

38

Defendant approximates 5,000 documents relevant to twenty-five corporate entities
must be reviewed to respond to plaintiffs’ discovery requests (ECF doc. 215 at 2-3).
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III.

Sanctions
Plaintiffs also seek sanctions against defendant pursuant to Fed. R. Civ. P.

37(a)(5). With reference to expenses and attorney’s fees, Rule 37(a)(5)(A) provides:
If the motion is granted—or if the disclosure or requested discovery is
provided after the motion was filed—the court must, after giving an
opportunity to be heard, require the party or deponent whose conduct
necessitated the motion, the party or attorney advising the conduct, or both
to pay the movant’s reasonable expenses incurred in making the motion,
including attorney’s fees.
The court “must not order this payment” if it finds that the motion was filed before the
movant met its duty to confer, or the failure to disclose was “substantially justified,” or
that “other circumstances make an award of expenses unjust.”39

The court should

diligently apply sanctions under Rule 37 both to penalize those who have engaged in
sanctionable misconduct and to deter those who might be tempted to such conduct in the
absence of such a deterrent.40 The district court is afforded wide discretion in choosing
an appropriate sanction.41
Plaintiffs argue that sanctions are appropriate because defendant has failed to
provide any information responsive to their interrogatories and has failed to produce any
documents responsive to their requests for production. Further, plaintiffs assert that the

39

Fed. R. Civ. P. 37(a)(5)(A).

40

Starlight Intern. Inc. v. Herlihy, 186 F.R.D. 626, 647 (D. Kan. 1999) (citing Olcott v.
Delaware Flood Co., 76 F.3d 1538, 1555 (10th Cir. 1996)).
41

Cardenas, 2006 WL 1537394, at *5 (citing Proctor & Gamble Co. v. Haugen, 427
F.3d 727, 738 (10th Cir. 2005)).
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majority of defendant’s objections are not substantially justified, and are designed to
delay discovery. Plaintiffs assert that they have made good faith attempts to resolve this
dispute without filing a motion but were left with no choice when defendant refused to
supplement his answers or participate in a telephone conference with the court.
Defendant responds that he has made documents available (in Galena, Kansas) and
that requiring plaintiffs to pay for copies is not sanctionable conduct.

Defendant

maintains that his refusal to produce certain documents and his reliance on Rule 33(d) to
respond to interrogatories are substantially justified. Therefore, defendant asserts that
plaintiffs’ request for attorney fees should be denied.
Thus far, the court has granted plaintiffs’ motion in its entirety. Defendant has
failed to produce any documents or substantive answers in response to plaintiffs’
discovery requests in aid of execution, which were served more than nine months ago.
Instead, defendant asserted meritless general objections, specific objections that he did
not reassert or support in response to the motion, and other objections and responses that
this court has rejected. Defendant could have avoided the expense of this motion but
chose to maintain his position and refuse a telephone conference with the court. Because
the court finds that defendant’s objections were not substantially justified and no
circumstances make an award of expenses unjust, plaintiffs’ request for attorney’s fees is
granted.
The parties are encouraged to confer and reach agreement on the amount of
attorney’s fees defendant will pay plaintiffs in connection with this dispute. In the
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hopefully unlikely event the parties cannot reach an agreement, by March 26, 2015,
plaintiffs shall file an accounting of the costs and legal fees (including supporting
documentation, such as attorney time sheets) they maintained in regard to filing and
briefing the motion to compel and for sanctions. Thereafter, defendant, may, if he
believes it necessary, file a response to plaintiffs’ filing by April 2, 2015, and address
whether sanctions should be awarded against defendant, or defense counsel, or both in
some proportion.
In addition to the sanctions imposed herein, defendant is specifically warned that
further noncompliance with discovery obligations may result in harsher sanctions,
including being held in contempt of court.
IT IS SO ORDERED.
Dated March 19, 2015, at Kansas City, Kansas.

s/ James P. O’Hara
James P. O’Hara
U. S. Magistrate Judge

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