Barrette Outdoor Living, Inc. v. Michigan Resin Representatives, LLC et al

Filing 215

ORDER OVERRULING DEFENDANT JOHN H. LEMANSKIS OBJECTION/APPEAL [#210] AND AFFIRMING MAGISTRATE JUDGE HLUCHANIUKS SEPTEMBER 26, 2014 ORDER [#207]. Signed by District Judge Gershwin A. Drain. (Bankston, T)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
BARRETTE OUTDOOR LIVING, INC.
d/b/a U.S. FENCE INC.,
Plaintiff,

Case No. 11-cv-13335
HON. GERSHWIN A. DRAIN

v.

MICHIGAN RESIN REPRESENTATIVES,
a Michigan limited liability company, et al.,
Defendants.
_____________________________/
ORDER OVERRULING DEFENDANT JOHN H. LEMANSKI’S
OBJECTION/APPEAL [#210] AND AFFIRMING MAGISTRATE JUDGE
HLUCHANIUK’S SEPTEMBER 26, 2014 ORDER [#207]
I.

INTRODUCTION
Presently before the Court is Defendant John H. Lemanski’s Objections to

Magistrate Judge Michael Hluchaniuk’s Order Denying Defendant’s Motion to
Dismiss or, in the Alternative, to Compel Discovery, filed on October 14, 2014. For
the reasons that follow, the Court will overrule Defendant’s Objections and will affirm
Magistrate Judge Hluchaniuk’s Order denying Defendant’s Motion to Dismiss or, in
the Alternative, to Compel Discovery.
-1-

II.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY
Plaintiff manufactures and sells outdoor accessory products to the general

public and purchases millions of pounds of resin each year in connection with its
business. Plaintiff hired Defendant in 2007. The events giving rise to the instant
action began in February of 2010 when Defendant was a Purchasing Manager at
Plaintiff’s Flint, Michigan facility. One of the essential duties of Defendant’s position
was to ensure that Plaintiff paid the lowest price possible for resin. The centerpiece
of Plaintiff’s claims concerns Defendant’s purported scheme involving a “shell”
company run by his sister and her roommate, who are also both named as defendants
herein, for the purpose of reselling resin to Plaintiff at inflated prices. Specifically,
Plaintiff alleges that the shell company purchased resin for approximately
$3,800,000.00 from Resin Distribution Inc., and then resold the same resin to Plaintiff
in an amount exceeding $4,200,000.00, with Defendant and his cohorts pocketing the
difference.
The undersigned was recently reassigned to this matter on October 3, 2014. A
review of the docket reveals that the instant dispute has a long and fiercely litigated
procedural history. After several rulings on the parties’ competing dispositive
motions, all of Plaintiff’s claims remain save for Plaintiff’s claim for tortious
inducement of breach of fiduciary duty, which Plaintiff voluntarily dismissed in
-2-

September of 2011. The judge who previously presided over this matter entered
summary judgment in favor of Plaintiff on Defendant’s Counterclaim in June of 2013.
Discovery closed on June 28, 2013. The discovery phase also similarly
engendered extensive motion practice including several motions to compel brought
by Plaintiff, as well as a motion for spoilation sanctions resulting in monetary
sanctions and an adverse inference against Defendant that his cell phone and personal
computer contained unfavorable information suggesting he was in fact involved with
the shell company run by his sister and her roommate.
The instant objections arise from Defendant’s Motion to Dismiss or, in the
Alternative, to Compel Discovery, wherein Defendant argued that Plaintiff failed to
adequately respond to his Second Set of Document Requests. Defendant has been
representing himself in this action since a stipulated order allowing his counsel to
withdraw was entered on August 6, 2013. As noted by the magistrate judge however,
Defendant was represented by counsel during the discovery phase in this matter.
On April 2, 2013, Defendant’s counsel sent correspondence to Plaintiff’s
counsel delineating deficiencies with respect to Plaintiff’s responses to Defendant’s
Second Set of Document Requests. Thereafter, counsel for both parties had a face-toface meeting and between April and June of 2013 worked out the issues with respect
to Plaintiff’s document production. This is evidenced by the fact that counsel for
-3-

Defendant never filed a Motion to Compel with respect to Defendant’s Second Set of
Document Requests. On November 10, 2013, Defendant, who declined to obtain new
counsel, sent correspondence to Plaintiff’s counsel indicating his belief that Plaintiff’s
document production was still incomplete.

Plaintiff’s counsel disagreed with

Defendant’s characterization of the document production but offered to meet with
Defendant to discuss the matter. Defendant refused to meet with counsel; instead he
filed his Motion to Dismiss or, in the Alternative, to Compel Discovery.
In denying Defendant’s motion, the Magistrate Judge relied on the following
facts: (1) Defendant’s motion was “inexcusably tardy” having been “brought five
months” after discovery closed, (2) the motion was filed without meeting with counsel
as required by the Federal Rules of Civil Procedure and (3) the motion was
misplaced in that Plaintiff had never been warned that dismissal was a potential
sanction which is, at a minimum, required for a district court’s imposition of the most
severe sanction for discovery related abuses.
III.

LAW & ANALYSIS
A.

Standard of Review

The decision and order of a non-dispositive motion by a magistrate judge will
be upheld unless it is clearly erroneous or contrary to law. 28 U.S.C. § 636(b)(1)(A);
Fed. R. Civ. P. 72(a); Massey v. City of Ferndale, 7 F.3d 506, 509 (6th Cir. 1993).
-4-

Any appeal of or objection to a magistrate judge’s order must be made within fourteen
days of the entry of the order, must specify the part of the order the party objects to,
and state the basis for the objection. E.D. Mich. L.R. 72.1; 28 U.S.C. § 636(b)(1);
Fed. R. Civ. P. 72(a). Objections that are only general and are not specific waive the
right to appeal. See Howard v. Secretary of HHS, 932 F.2d 505, 508-09 (6th Cir.
1991).
In a non-dispositive order entered by a magistrate judge, a district judge shall
consider such objections and shall modify or set aside any portion of the magistrate
judge’s order found to be clearly erroneous or contrary to law. Fed. R. Civ. P. 72(a).
“A finding is ‘clearly erroneous’ when although there is evidence to support it, the
reviewing court on the entire evidence is left with the definite and firm conviction that
a mistake has been committed.” United States v. United States Gypsum Co., 333 U.S.
364, 395 (1948); Hagaman v. Comm’r of Internal Revenue, 958 F.2d 684, 690 (6th
Cir. 1992). “If two permissible views exist, a magistrate judge’s decision cannot be
‘clearly erroneous.’” Hennigan v. Gen. Elec. Co., No. 09-11912, 2010 U.S. Dist.
LEXIS 111757, *2 (E.D. Mich. Oct. 20, 2010). Rule 72(a) provides considerable
deference to the determinations of magistrate judges. In re Search Warrants, 889 F.
Supp. 296, 298 (S.D. Ohio 1995).
B.

Timeliness
-5-

As an initial matter, Plaintiff argues that Defendant’s objections should be
overruled because they were untimely filed. Rule 6 of the Federal Rules of Civil
Procedure governs the computation of any time period specified in the Federal Rules
of Civil Procedure. Rule 6(a)(1) states:
(1) Period Stated in Days or a Longer Unit.
When the period is stated in days or a longer unit of time:
(A) exclude the day of the event that triggers the period;
(B) count every day, including intermediate Saturdays, Sundays,
and legal holidays; and
(C) include the last day of the period, but if the last day is a
Saturday, Sunday, or legal holiday, the period continues to run until the
end of the next day that is not a Saturday, Sunday, or legal holiday.
Fed. R. Civ. P. 6(a)(1). Pursuant to Rule 72(a), Plaintiff was required to file his
objections to Magistrate Judge Hluchaniuk’s Order within fourteen days after service.
See Fed. R. Civ. P. 72(a). Magistrate Judge Hluchaniuk issued his decision on
September 26, 2014. Thus, the fourteen day deadline for the filing of objections
began to run the following day, or on September 27, 2014, because the “day of the
event that triggers the period” is excluded under Rule 6(a)(1).
As such, the period for filing objections ended on Saturday, October 11, 2014,
or fourteen days from September 27, 2014. Defendant’s objections therefore were not
due until Tuesday, October 14, 2014, which was the “next day that [w]as not a

-6-

Saturday, Sunday, or legal holiday.” Fed. R. Civ. P. 6(a)(1)(C).1 Accordingly,
Defendant’s objections were timely filed under the applicable rules.
C.

Objections

Defendant raises nine objections to Magistrate Judge Hluchaniuk’s Order
denying his Motion to Dismiss or, in the Alternative, to Compel Discovery. None of
Defendant’s objections demonstrate that Magistrate Judge Hluchaniuk’s decision was
clearly erroneous or contrary to law. The Magistrate Judge correctly applied the
controlling authority concerning discovery sanctions under Rule 37 of the Federal
Rules of Civil Procedure to the facts of this case.
Defendant first objects claiming that the Magistrate Judge erroneously
concluded that Defendant’s motion failed to identify the specific documents sought.
Defendant’s objection focuses on electronically stored information (ESI) related to a
spreadsheet that Defendant has admitted he created. This spreadsheet contains
columns that suggest Defendant knew the shell company would earn a profit from
reselling resin to Plaintiff. Defendant’s objection is inexplicable; his contention that
“Plaintiff has not provided ESI of a now proven fraudulently fabricated spreadsheet”
is plainly without merit since he admitted during his deposition that he created the
spreadsheet. In any event, the Magistrate Judge correctly found that Defendant’s

1

Monday, October 13, 2014 was a federal holiday.
-7-

excessively untimely motion to compel, which was filed without any good faith effort
to resolve the purported deficiencies with Plaintiff’s document production, warrants
the denial of compelling Plaintiff to produce purportedly withheld documents.
Defendant further argues that the Magistrate Judge erroneously concluded that
Defendant failed to identify the specific documents that were sought by his motion.
This objection is similarly curious as Defendant’s motion did in fact fail to articulate
the specific documents sought. Even if Defendant had properly described the
documents he had yet to receive, the Magistrate Judge correctly concluded that
Defendant’s motion was woefully late, and in any event, the dispute concerning his
Second Set of Document Requests had been resolved by his former counsel by June
of 2013. This objection likewise lacks merit.
Next, Defendant objects to the Magistrate Judge’s conclusion that Defendant
was represented by very able counsel for over two years during the case. The Court
fails to discern how this objection establishes the Magistrate Judge’s decision was
clearly erroneous with respect to its conclusion concerning the propriety of discovery
sanctions or to compel unidentified documents. This objection warrants no further
discussion.
Defendant’s next objection that it was erroneous for the Magistrate Judge to
conclude prior counsel had resolved the issues concerning Plaintiff’s document
-8-

production also requires no further analysis. Defendant fails to point to any evidence
in the record demonstrating that the Magistrate Judge’s conclusion was clearly
erroneous.
Defendant also maintains that it was error for the Magistrate Judge to conclude
that Defendant’s 38-page, 320-paragraph affidavit suggests an ability to defend this
case on the present record. This objection likewise lacks merit as Defendant’s
protestations that he requires “numerous[,]” yet unidentified documents fails to
explain how the purported missing discovery relates to any of the claims or defenses
in this action. This objection is without merit.
Additionally, Defendant’s next objection – that his untimely motion does not
preclude remedies under the Federal Rules of Civil Procedure– is unsupportable in
law or fact. In any event, the Court agrees with the Magistrate Judge that Defendant’s
Motion to Dismiss or, in the Alternative, to Compel Discovery was extremely
untimely. Defendant has failed to establish good cause for demonstrating the reason
for his untimely motion regarding purported discovery abuses. Defendant’s claims
that he was unaware of outstanding production is without any legitimate basis in the
record.
Next, Defendant argues that the Magistrate Judge incorrectly concluded that
Plaintiff was not previously warned about discovery sanctions. This objection
-9-

demonstrates Defendant’s lack of understanding of the Federal Rules of Civil
Procedure. Defendant suggests that Plaintiff counsel’s awareness of his obligations
pursuant to the Rules of Professional Conduct and the Federal Rules of Civil
Procedure is sufficient warning to warrant the most severe sanction permitted under
Rule 37 of the Federal Rules of Civil Procedure. Defendant misapprehends clear
authority that such awareness does not amount to a district court’s repeated warnings
concerning a party’s discovery abuses.

Even if Defendant could establish

sanctionable conduct on the part of Plaintiff’s counsel, it would be an abuse of
discretion for this Court to impose the most severe sanction without any prior warning
that dismissal was a potential outcome.
Defendant also complains that he did not have an obligation to meet and confer
with Plaintiff’s counsel concerning the purported deficient document production. This
argument also demonstrates Defendant’s misunderstanding of his obligations under
the Federal Rules of Civil Procedure and this Court’s local rules. This objection
requires no further discussion other than a warning from this Court that further motion
practice without an honest, good faith effort to resolve disputes will not be tolerated.
Lastly, Defendant claims that the Magistrate Judge failed to thoroughly analyze
the dismissal portion of his Motion to Dismiss or, in the Alternative, to Compel
Discovery. Contrary to Defendant’s argument, the Magistrate Judge’s order contains
-10-

a well-reasoned and thorough analysis of this aspect of Defendant’s motion. See Dkt.
No. 207 at 5-7. This objection likewise lacks merit.
IV.

CONCLUSION
For the foregoing reasons, Magistrate Judge Hluchaniuk’s September 26, 2014

Order Denying Defendant’s Motion to Dismiss or, in the Alternative, to Compel
Discovery [#207] is AFFIRMED and Defendant Lemanski’s Appeal of the
Order/Objection to the Order [#210] is OVERRULED.
SO ORDERED.

/s/Gershwin A Drain
GERSHWIN A. DRAIN
United States District Judge

Dated: December 4, 2014

-11-