Bigham et al v. R&S Heating and Air Conditioning, Inc.
Filing
146
ORDER denying 133 Motion for Order to Show Cause; granting in part and denying in part 133 Motion to Compel. (Written Opinion) Signed by Magistrate Judge Becky R. Thorson on 10/7/2021. (DMM)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
James Bigham, John Quarnstrom, Robert
Vranicar, Jim Bowman, Mike McCauley,
Matt Fairbanks, as Trustees of the Sheet
Metal Local #10 Control Board Trust
Fund, and The Sheet Metal Local #10
Control Board Trust Fund,
v.
Plaintiffs,
Civ. No. 14-1357 (DWF/BRT)
ORDER ON PLAINTIFFS’ MOTION
FOR AN ORDER TO SHOW CAUSE
OR ALTERNATIVELY TO COMPEL
R&S Heating and Air Conditioning, Inc.,
Defendant,
v.
Agape Mechanical, LLC, and Philos
Mechanical, LLC
Respondents.
Amy L. Court, Esq., Carl S. Wosmek, Esq., and Christy E. Lawrie, Esq., McGrann Shea
Carnival Straughn & Lamb, Chtd., counsel for Plaintiffs.
Matthew J. Schaap, Esq., Robert B. Bauer, Esq., Dougherty, Molenda, Solfest, Hills &
Bauer P.A., counsel for Respondents.
This matter is before the Court on Plaintiffs’ Motion for an Order to Show Cause
or Alternatively to Compel. (Doc. No. 133.) For the reasons set forth below, Plaintiffs’
Motion is granted in part and denied in part.
I.
BACKGROUND
The underlying case was filed on April 30, 2014. (Doc. No. 1.) On April 21, 2017,
Judgment was entered in favor of Plaintiffs against R&S Heating and Air Conditioning,
Inc. (“R&S”). (Doc. No. 87, 4/21/17 Order; Doc. No. 88, Judgment.) R&S failed to make
any payments toward satisfaction of the judgment. (Doc. No. 110, 11/17/20 Order.) In an
attempt to collect on the judgment, Plaintiffs served discovery on R&S, R&S’s owner
Brett Thielen, and third parties Philos Mechanical, LLC (“Philos”) and Agape
Mechanical, LLC (“Agape”) – entities owned and controlled by Brett Thielen’s brother,
Scott Thielen. Plaintiffs also served written discovery requests on the law firm that
represented Philos and Agape. (Id.) Discovery disputes arose, and United States District
Court Judge Donovan W. Frank granted Plaintiffs’ Motion to Compel on November 17,
2020. (Id.)
In connection with his November 17, 2020 Order, Judge Frank conducted an incamera review of certain documents withheld and ruled on their privileged status. (See
Doc. No. 121, 12/2/20 Text Order.) After that, Respondents filed a Motion for a
Protective Order (Doc. No. 122), asking the Court to limit the scope of deposition topics
relating to Respondents’ customers, employees, and service contracts. In addition,
Respondents asked to be allowed to designate employee, customer, and business
information as Confidential or Attorneys Eyes Only. (Doc. No. 124, Respondents’ Mem.
of Law in Supp. 15–16.) Judge Frank denied Respondents’ motion on March 3, 2021.
(Doc. No. 132, 3/3/21 Order.) Judge Frank’s Order, however, stated that “the Court”
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would “make itself available during Respondents’ depositions to address and rule on any
objections.” (Id. at 4.)
The parties worked to set new dates for depositions. 1 On March 15, 2021, Judge
Frank’s chambers provided counsel with several open dates when Judge Frank would be
available: April 19, 20, 26, 28, and 29. (Doc. No. 140, Decl. of Matthew J. Schaap
(“Schaap Decl.”), Ex. E-1 at 2.) New subpoenas were served on March 17, 2021, setting
an April 20, 2021 deposition date for Agape, and an April 28, 2021 deposition date for
Philos. Inexplicably, no one followed up with chambers to confirm the dates that counsel
had set. On April 20, 2021, at 12:35 p.m., Respondents’ counsel wrote chambers: “We
are scheduled for the first deposition this afternoon. What is the best way to reach out to
Judge Frank today if there are objections we would like him to rule on this afternoon?”
(Id. at 1.) Chambers immediately responded: “I don’t see that the Court was provided
with the deposition schedule. Judge Frank’s calendar has changed from my March 15th
email and he is [in] Court this afternoon. The expectation is that the Court would be
provided with the schedule in advance.” (Id.) Instead of rescheduling, counsel went
forward with the deposition of Agape. Disputes arose, leading to Plaintiffs’ Motion for an
Order to Show Cause or to Alternatively to Compel (Doc. No. 133), which is presently
before the Court.
II.
ANALYSIS
On July 1, 2021, Plaintiffs’ filed a Motion for an Order to Show Cause or
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Several subpoenas were served and are referenced in the parties’ motion papers.
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Alternatively to Compel. (Doc. No. 133.) A hearing was held on the motion on
September 3, 2021. (Doc. No. 145.) At the hearing, Plaintiffs confirmed that their motion
should be considered a Motion to Compel discovery. Specifically, Plaintiffs request an
order overruling Respondents’ objections and requiring Agape and Philos to provide
complete and adequate responses and answers to Plaintiffs’ subpoenas duces tecum and
for testimony.
A.
Plaintiffs’ Motion to Compel Rule 30(b)(6) Depositions
The Court first addresses the Rule 30(b)(6) depositions of third-parties Agape and
Philos. In his November 17, 2020 Order, Judge Frank ruled that questions about company
assets, business plans, formation, employees, or customers were “topics well within the
ambit of Plaintiffs’ discovery requests and permissible topics of exploration.” (Doc.
No. 110, 11/17/20 Order 15.) However, in his ruling, Judge Frank did not address
whether the deposition topics, as drafted, were sufficiently particularized to satisfy
Rule 30(b)(6). Instead, in his later Order, Judge Frank offered to resolve objections as
they came up at the deposition. (Doc. No. 132, 3/3/21 Order 4.) As discussed at the
hearing on September 3, 2021, the parties missed the opportunity for Judge Frank to rule
during the depositions as to whether a particular question was within the scope of
permitted discovery. In this Court’s view, the best course for completing the third-party
deposition discovery now is to rule in advance of the deposition on whether the topics are
sufficiently particularized and to provide a firm schedule for next steps.
Accordingly, based on the file, records, submissions, and argument of counsel, the
Court grants in part and denies in part Plaintiffs’ motion (Doc. No. 133) with respect to
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Rule 30(b)(6) depositions as follows:
1.
Topics 1, 2, 5, 6, 7, and 8 for Agape 2 and topics 1, 2, 5, 6, 7, and 8 for
Philos 3 are sufficiently particularized. The third parties must, therefore, prepare their
Exhibit 1 to the subpoena served on Agape Mechanical sets forth the topics for
testimony as follows (the Court has numbered these for clarity):
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1.
The relationship between Agape Mechanical and R&S Heating and
Air Conditioning, Inc. from January 2015 through the present.
2.
The relationship between Philos Mechanical, LLC and Agape
Mechanical from January 2015 through the present.
3.
Agape Mechanical’s employees from January 2015 through the
present.
4.
Agape Mechanical’s customers from January 2015 through the
present.
5.
Agape Mechanical’s outstanding judgments related to R&S Heating
and Air Conditioning, Inc.
6.
The transfer of any funds between R&S Heating and Air
Conditioning, Inc., and Agape Mechanical from January 2015
through the present.
7.
The exchange of funds between R&S Heating and Air Conditioning,
Inc., Philos Mechanical, LLC and Agape Mechanical from January
2015 through the present.
8.
Agape Mechanical’s relationship with Brett Thielen from January
2015 through the present.
(Doc. No. 136, Decl. of Christy E. Lawrie (“Lawrie Decl.”), Ex. A.)
Exhibit 1 to the subpoena served on Philos Mechanical, LLC sets forth the topics
for testimony as follows (the Court has numbered these for clarity):
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1.
The relationship between Philos Mechanical, LLC and R&S Heating
and Air Conditioning, Inc. since April 2016.
(Footnote Continued on Next Page)
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designees to testify on these topics.
2.
Plaintiffs must serve amended topics 3 and 4 for Agate and topics 3 and 4
for Philos that are more particularized no later than October 15, 2021.
3.
Counsel must promptly confer in good faith, consistent with amended Rule
30(b)(6), to confirm or further refine the revised topics 3 and 4. Counsel must not only
review the Rule, but also the 2020 Amendment Comments.
4.
If agreement is reached, a joint status report must be filed no later than
October 29, 2021. The joint status report must include a complete list of all
particularized deposition topics that will be covered. The deposition must be scheduled to
take place after the completion of all document discovery as ordered below.
2.
The assets of Philos Mechanical, LLC during the period of
January 2016 through December 2016, including, but not limited
to, information related to the sale, transfer, lease, or rental from R&S
Heating and Air Conditioning, Inc.
3.
Philos Mechanical, LLC’s employee from April 2016 through the
present.
4.
Philos Mechanical, LLC’s customers from April 2016 through the
present.
5.
The transfer of any funds between R&S Hearing and Air
Conditioning, Inc. and Philos Mechanical, LLC from April 2016
through the present.
6.
The exchange of funds between R&S Hearing and Air
Conditioning, Inc., Philos Mechanical, LLC and Agape Mechanical
since April 2016.
7.
Philos Mechanical, LLC’s relationship with Brett Thielen between
April 2016 and the present.
8.
The relationship between Philos Mechanical, LLC and Agape
Mechanical between April 2016 and the present.
(Lawrie Decl., Ex. B.)
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5.
If the parties do not reach complete agreement on the deposition topics, the
parties must simultaneously file letter briefs on November 1, 2021, presenting their
positions regarding the proposed list of topics. Any letter response to the letter briefs
must be filed no later than November 3, 2021. The Court will determine if a hearing is
necessary. The parties may not move forward with the deposition without the Court
deciding any unresolved dispute on topics. If the Plaintiffs and Respondents later resolve
all issues before the Court resolves the disputes, they must file a joint status report with
the agreed upon list of the agreed upon particularized topics within 24 hours after they
reach agreement.
6.
Plaintiffs will have 6 hours for each third-party deposition. The parties must
meet and confer to discuss a timetable for depositions to take place in November 2021.
B.
Plaintiffs’ Motion to Compel the Production of Documents
The Court next addresses Plaintiffs’ motion to compel documents from
Respondents. After the hearing, the Court further reviewed the requests, the objections,
and the history of litigation about this third-party discovery. Based on the file, records,
submissions, and argument of counsel, the Court grants in part and denies in part
Plaintiffs’ motion (Doc. No. 133) with respect to the production of documents as follows.
For Agape
For Philos
The request for “All documents executed
by Brett Thielen since January 2015” is
overly broad; however, Plaintiffs may
serve one more narrowly tailored
document request by October 15, 2021.
Any response is due 14 days after the
request is served.
The request for “All documents relating to
the employment of Brett Thielen” is
within the scope of discovery and
Respondents must produce all responsive
documents by October 29, 2021.
The request for “All documents related to
the employment of any former R&S
Heating and Air Conditioning, Inc.
employee” is overly broad; however,
The request for “All documents executed
by Brett Thielen after January 1, 2016” is
overly broad; however, Plaintiffs may
serve one more narrowly tailored
document request by October 15, 2021.
Any response is due 14 days after the
request is served.
The request for “All documents related to
the employment of Brett Thielen” is
within the scope of discovery and
Respondent must produce all responsive
documents by October 29, 2021.
INTENTIONALLY LEFT BLANK
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Plaintiffs may serve two additional
document requests to Agape that are more
narrowly tailored relating to Agape
employees (former or current) who may
have once been employed by R&S
Heating and Air Conditioning. These two
document requests must be served by
October 15, 2021.
The request for “All documents relating to
customers and business accounts obtained
by Agape Mechanical after January 1,
2015” is overly broad; however, Agape
must produce documents sufficient to
identify the customers, clients or
business accounts obtained by Agape
after January 1, 2015.
The request for “All documents related to
customers and business accounts
obtained by Philos Mechanical, LLC after
January 1, 2016” is overly broad;
however, Philos must produce
documents sufficient to identify the
customers, clients, or business accounts
obtained by Philos after January 1,
2016.
These documents must be produced no
later than October 22, 2021. Plaintiffs
must review Respondents’ document
production within 7 days. Plaintiffs may
then serve one additional document
request seeking the production of
specific customer/client files, naming
the customer/client of interest. Any
additional request to each Respondent
must be made no later than 14 days after
Plaintiffs receive Respondents’
production.
These documents must be produced no
later than October 22, 2021. Plaintiffs
must review Respondents’ document
production within 7 days. Plaintiffs may
then serve one additional document
request seeking the production of
specific customer/client files, naming
the customer/client of interest. Any
additional request to each Respondent
must be made no later than 14 days after
Plaintiffs receive Respondents’
production.
The request for “All payments made to
R&S Heating and Air Conditioning,
Inc. between 2014 and 2016”;
The request for “All documents and
correspondence related to the Asset
Purchase Agreement dated May 22,
2016”; and
“All documents, correspondence, and
contracts, between Agape Mechanical and
R&S Heating and Air Conditioning, Inc.
since January 2015”; and
“All payments made to Brett Thielen
after January 1, 2016” is within the scope
of discovery and must be produced by
October 29, 2021.
“All documents and correspondence
between Philos Mechanical and Agape
Mechanical since January 2015” are
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within the scope of discovery and
Respondents must produce all responsive
documents by October 29, 2021.
In addition:
1.
Unless otherwise ordered, all documents ordered to be produced in
response to requests that are deemed by this Order to be within the scope of discovery
must be produced by October 29, 2021.
2.
Any response to a new document request permitted by this Order must be
served no later than 14 days after the request is served.
3.
All document discovery must be completed by November 5, 2021. Any
unresolved disputes about document discovery must brought to the Court’s via motion
pursuant to Local Rule 7.1 no later than November 12, 2021.
C.
Other
The Court will not revisit Respondents’ motion for a Protective Order, which was
presented to Judge Frank and ruled upon, seeking to limit testimony or designate
testimony as outside counsel’s eyes only. Instead, the Court will separately issue a
Protective Order to govern the exchange of discovery using the template posted on the
Court website. The Court finds that the template order will adequately address concerns
regarding confidentiality of the discovery sought and includes a procedure for resolving
disputes about confidential designations. The Court’s form is found at
https://www.mnd.uscourts.gov/forms/stipulation-protective-order.
Finally, this Court will not take phone calls during the depositions and the parties
are expected to fully meet and confer on the issues addressed in this Order so that the
depositions go smoothly. If objections on the grounds of attorney-client privilege are
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made, and a witness is instructed not to answer, counsel must lay proper foundation
during the deposition to support any post-deposition motion practice on objections.
Further, counsel are expected to meet and confer on any other disputes that arise relating
to the remaining discovery and if unresolved, must promptly bring any disputes to the
Court’s attention pursuant to Local Rule 7.1.
SO ORDERED.
Date: October 7, 2021
s/ Becky R. Thorson
BECKY R. THORSON
United States Magistrate Judge
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