West Hills Farms, LLC v. ClassicStar, LLC et al

Filing 798

MEMORANDUM OPINION & ORDER: 1) Plas' Motion for Sanctions and the Motion to Join that Motion for Sanctions are GRANTED as set forth below. 2) That GeoStar Corporation is precluded from disputing the authenticity of documents appearing to have b een created or received by GeoStar or its agents. 3) That the testimony offered by GeoStar Corporation's designee may be used by any party only insofar as it contains admissions against GeoStar itself and as offered against GeoStar. 4) GeoStar C orporation is estopped from denying the assertions set forth by Plas and other parties to this motion in paragraphs (a) through (s) of Pla's Memo in Support of its Motion for Sanctions and paragraphs (1) through (13) in the Memo in Support of th e Joinder in Plas' Motion. 5) Motions as filed in 09-cv-15 (DE 76 and 78 ) are DENIED AS MOOT. 6) Plummer parties' Motion is STRICKEN from 09-cv-167 (DE 14 ) as it appears that the parties did not intend to file the motion in that individual case. Signed by Judge Joseph M. Hood on 4/4/2012.Associated Cases: 5:07-cv-00353-JMH-REW et al.(SCD)cc: COR

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION at LEXINGTON
IN RE CLASSICSTAR MARE LEASE
LITIGATION

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MDL No. 1877
Master File:
Civil Action No. 07-353-JMH
5:06-cv-243-JMH
5:07-cv-347-JMH
5:07-cv-348-JMH
5:07-cv-349-JMH
5:07-cv-351-JMH
5:07-cv-352-JMH
5:07-cv-419-JMH
5:08-cv-17-JMH
5:08-cv-53-JMH
5:08-cv-60-JMH
5:08-cv-74-JMH
5:08-cv-321-JMH
5:08-cv-418-JMH
5:08-cv-496-JMH
5:09-cv-15-JMH
5:09-cv-167-JMH
MEMORANDUM OPINION & ORDER

*** *** ***
This matter is before the Court upon the Plaintiffs’ Motion
for Sanctions Against GeoStar and Defendants S. David Plummer II,
Spencer D. Plummer, III, Strategic Opportunity Solutions, LLC d/b/a
Buffalo

Ranch,

and

Zeus

Investments,

LLC’s

(hereinafter,

collectively, “the Plummer parties”) Limited Joinder in that Motion
for Sanctions Against GeoStar and Request for Additional Sanctions

filed in the various cases listed in the caption above.1

GeoStar

has responded with respect to both motions, and the Movants have
replied in further support of their motions. Having considered the
motions, the Court grants the requests for relief, and sanctions
are entered as set forth below.
These parties request an award of sanctions restricting the
use of GeoStar’s deposition testimony due to the failure of
GeoStar’s designated witness to appear for the second and third
days of GeoStar’s deposition.

The designee’s failure to appear

meant that Plaintiffs were unable to conclude questioning directed
to GeoStar and that the Plummer parties never had an opportunity to
cross-examine GeoStar’s designated witness on that testimony which
was elicited through questioning by Plaintiffs’ counsel on the
first day of the deposition. The failure to appear for questioning
has, according to these parties, prejudiced their ability to gather
evidence in support of their own claims and cross-claims against
GeoStar, defend against GeoStar’s cross- and third-party claims in
the various suits, as well as the Plummer parties’ ability to
cross-examine GeoStar’s designee about that testimony which could
be construed as being offered against the Plummers during the first
day of the deposition.

Plaintiffs and the moving Defendants seek

to have certain facts deemed established and to restrict the use of

1

The location of these motions in the various records are set
forth, by docket entry number, in the order language, below.
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what limited deposition testimony GeoStar’s designated witness
offered without examination by all interested parties on the first
day of the scheduled three day deposition.
Pursuant

to

Fed.

R.

Civ.

P.

30(b)(6),

GeoStar

had

an

obligation to designate one or more witnesses to appear on its
behalf at a deposition noticed by Plaintiffs and as ordered by this
Court, as well as to prepare that witness to testify regarding
GeoStar’s position on the topics included in the notice – here
someone with knowledge of corporate documents.

A failure to

provide

designee

an

adequately

prepared

essentially, a failure to appear.

and

willing

is,

See Black Horse Lane Assoc.,

L.P. v. Dow Chem. Corp., 228 F.3d 275, 304 (3d Cir. 2000).

In such

a situation, Fed. R. Civ. P. 37(d) authorizes the Court to impose
sanctions on a corporate party, directing that certain facts be
deemed

established

or

prohibiting

the

party

from

presenting

evidence or opposing certain claims. Rule 37 puts no limits on who
may move for sanctions, and, thus, the Court concludes that both
the party who noticed the depositions and others that might have
questioned the designee at a noticed deposition may seek sanctions.
See Payne v. Exxon Corp., 121 F.3d 503, 509-10 (9th Cir. 1997).

In

this way, the Court can prevent frustration of the discovery
process by giving the frustrated party or parties the benefit of an
inference that the deposition would have yielded evidence favorable
to its position – or at least unfavorable to that defendant.

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Moore’s Federal Practice – Civil § 37.96 (2009).

Further, this

Court recognizes that the parties’ taking the deposition could and
likely would have requested authentication of documents identified
by the notice of deposition in the course of that proceeding.

See

Sprint Comm. Co. L.P. v. Theglobe.com, Inc., 236 F.R.D. 524, 528
(D. Kan. 2006).

This Court concludes that it can also provide

relief from the designee’s failure to appear with respect to this
issue by refusing to allow the errant corporation to deny that such
documents are authentic.
The various parties have briefed this issue extensively but,
frankly, the Court finds that the issues raised by the motion of
whether to sanction Defendant GeoStar are quite simple.

GeoStar

was provided a list of topics upon which its designee was to
provide testimony at a deposition.

GeoStar had discretion in

selecting its designee or designees.

A selected designee appeared

and decided, after a single day of questioning, to walk out of the
deposition rather than proceed as noticed.

Geostar has not

disputed these facts and does not deny that the moving parties have
been prejudiced by them with respect to the preparation of their
claims and defenses.
Rather, GeoStar spends the bulk of its briefs in response to
the various requests for relief arguing that the movants are
seeking what is essentially a default judgment against it.

While

that may well be the result of the sanctions requested, GeoStar

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misses the point.

GeoStar was given an opportunity to provide

evidence in this case, including evidence that would arguably
support its defenses.

GeoStar’s failure to produce a designee to

provide that evidence means that, if Geostar is unable to offer a
defense due to limitations on what evidence it can now offer in
support of its claims and defenses, it was the master of its own
fate at the deposition.

Put another way, GeoStar made its own bed

and must now lie in it.
The Court finds that it is only fair that GeoStar itself be
precluded from disputing the authenticity of documents appearing to
have

been

created

or

received

by

GeoStar

or

its

agents,

as

requested by Plaintiffs. Further, the limited testimony offered by
GeoStar’s designee may be used with respect to any admissions in
that testimony against GeoStar itself.

The more difficult

question is what to do with any inferences that can be drawn from
testimony actually offered or anticipated from the designee that
speaks to other Defendants or cross- or third-parties in these
matters.

In the context of allegations of conspiracy, this is

particularly troubling – for GeoStar’s knowledge and actions can be
imputed

to

conspiracy.

anyone

else

who

demonstrably

participated

in

the

That said, the Court believes that any issue in this

regard can be straightforwardly remedied by estopping GeoStar from
denying the assertions set forth by Plaintiffs and the other
parties to this motion.

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Frankly, the proponents of the facts which are to be inferred
from GeoStar’s silence will still need to provide some evidence
from which these inferences themselves can be drawn in order for
them to be accepted as established with respect to parties other
than GeoStar.

Thus, for example, a party would need to show some

evidence to the Court that GeoStar “entered into sham leases with
Buffalo

Ranch,”

see

proposed

inference

(d)

in

Plaintiff’s

Memorandum of Law, in order to assert that fact against Buffalo
Ranch.

Then, the parties other than GeoStar may still marshal

evidence in support of their claims and defenses and remain free to
challenge the inferences that touch on the claims against them
using the evidence available to them to the extent that the
inference speaks to their action or inaction, even if GeoStar
itself cannot.
In

this

instance,

the

Court

concludes

that

the

fairest

resolution is to sanction Geostar by prohibiting GeoStar, and
GeoStar alone, from presenting evidence that would deny any of the
assertions (a) through (s) set forth in the Plaintiff’s Memorandum
in Support of its Motion for Sanctions and those set forth in
paragraphs (1) through (13) in the Memorandum in Support of Joinder
in the Plaintiffs’ Motion filed by the Plummers, Buffalo Ranch, and
Zeus Investments.
Accordingly, IT IS ORDERED:
(1)

that the Plaintiffs’ Motion for Sanctions and the Motion

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to Join that Motion for Sanctions, albeit in a limited fashion, by
Defendants S. David Plummer II, Spencer D. Plummer, III, Strategic
Opportunity

Solutions,

LLC

Investments,

and

Request

their

d/b/a
for

Buffalo

Ranch,

Additional

and

Zeus

Sanctions2

are

GRANTED as set forth below;
(2)

that GeoStar Corporation is precluded from disputing the

authenticity

of

documents

appearing

to

have

been

created

or

received by GeoStar or its agents;
(3)

that the testimony offered by GeoStar Corporation’s

designee may be used by any party only insofar as it contains
admissions against GeoStar itself and as offered against GeoStar;
(4)

that GeoStar Corporation is estopped from denying the

assertions set forth by Plaintiffs and the other parties to this
motion in paragraphs (a) through (s) of Plaintiff’s Memorandum in
Support of its Motion for Sanctions and paragraphs (1) through (13)
in the Memorandum in Support of Joinder in the Plaintiffs’ Motion
filed by the Plummers, Buffalo Ranch, and Zeus Investments;
(5)

that these motions as filed in 5:09-cv-15 [DE 76, 78] are

DENIED AS MOOT; and
(6)

that the Plummer parties’ Motion is STRICKEN from 5:09-

2

These motions can be found in the records of these matters
as follows: 5:06-cv-243 [DE 385, 391], 5:07-cv-347 [DE 141, 146],
5:07-cv-348 [DE 151, 153], 5:07-cv-349 [DE 169, 171], 5:07-cv-351
[DE 65, 67], 5:07-cv-352 [DE 78, 81], 5:07-cv-353 [DE 1061, 1080],
5:07-cv-419 [DE 116, 118], 5:08-cv-17 [DE 43], 5:08-cv-53 [DE 216,
222], 5:08-cv-60 [DE 34, 36], 5:08-cv-74 [DE 42], 5:08-cv-321 [DE
120, 124], 5:08-cv-418 [DE 30], 5:08-cv-496 [DE 85].
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cv-167 [DE 14], as it appears that the parties did not intend to
file the motion in that individual case.
This the 4th day of April, 2012.

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