Hilbill Properties, LLC v. Jacobson Companies

Filing 44

MEMORANDUM AND ORDER. (see order for details) IT IS HEREBY ORDERED that Plaintiff's "Plaintiff's Motion to Compel Responses to its First Request for Production of Documents from Defendant" [ECF No. 38 ] is GRANTED. IT IS FURTHER ORDERED that Jacobsen shall produce copies of all leases regarding the Property, into which it entered, with any entity, from 2006 to present; evidence of insurance policies pertaining to the Property that are particular to each lease or Original L essee; real estate payments made in conjunction with the Property; construction requests, bids, invoices, or statements concerning the Property; names of companies performing construction or repairs to the Property; and documents showing allocation o f costs for insurance, real estate payments, construction, repairs, and real estate taxes pertaining to the Property. Jacobsen shall produce documents relating to its budgeting for repairs and its payment of real estate taxes that are subject to Leas e 1 and Lease 3, for the time period 2006 through 2012. IT IS FURTHER ORDERED that Hilbill's request for an award of costs and fees incurred in securing Jacobsens responsive productions is HELD in ABEYANCE. IT IS FURTHER ORDERED that the parties shall confer, prepare, and submit a proposed Amended Case Management Order to the Court, within two weeks of this Order. Signed by District Judge E. Richard Webber on 09/10/2014. (CBL)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION

HILBILL PROPERTIES, LLC,
Plaintiff,
vs.
JACOBSEN COMPANIES,
Defendant.

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Case No. 4:13CV01663 ERW

MEMORANDUM AND ORDER
This matter comes before the Court on “Plaintiff’s Motion to Compel Responses to its
First Request for Production of Documents from Defendant” [ECF No. 38].
On or around July 1, 2000, Hilbill Properties, LLC (“Hilbill”), a Missouri Limited
Liability Company, entered into three lease agreements (collectively, “Leases”) for portions of its
property located at 7140 North Broadway, St. Louis, MO 63147 (“Property”). The lessees of the
Property were related companies Arthur Wells, Inc. (“AWI”); National Logistics, Inc. (“NLI”);
and Warehouse Specialists, Inc. (“WSI”) (collectively, “Original Lessees”). Each of the Original
Lessees individually signed one of the Leases. The Leases had substantially the same terms, with
the exception that rental amounts and the square footage covered under each lease differed. The
Leases required Original Lessees to maintain and repair their respective portions of the Property,
and to present the Property to Hilbill in a condition similar to its condition when the Leases
began. The Leases also required the Original Lessees to pay, in addition to rent, operating
expenses, real estate taxes, and utilities for the Property for each month of the lease.

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Subsequently, Jacobson Logistics Company, LC (“Jacobson”), an Iowa Corporation,
allegedly came to own or control each of the Original Lessees. It is unclear when exactly this
took place, but from 2006, Jacobson had taken over at least some portion of the Property.
On or about August 31, 2012, Prestige Brands terminated its sublease with WSI, and
vacated the Property after providing more than thirty days’ notice, consequently triggering
termination of the Leases. After earlier attempts at communication apparently failed, Hilbill
demanded, but did not receive, payment of the rent, operating expenses, real estate taxes, and
utilities for the month of September, 2012, from Jacobson [ECF No. 2-6]. In its communication
to Jacobson, Hilbill stated the Leases would terminate on September 30, 2012, based on the
language of the second amendment to Leases, which provided the leases would end thirty (30)
days after “Prestige Brands vacate[d] its space prior to the end of its contract.” Jacobson, in its
reply to Hilbill’s demand letter, stated that it considered the Leases to be terminated as of August
31, 2012, as the Leases were month-to-month because they had not actually been renewed in
several years, and Jacobson had notified Hilbill thirty days in advance that it would be vacating
the Property on August 31, 2012.
Hilbill also requested to meet with an authorized Jacobson representative for an
inspection of the property to determine what repairs would be required, and formally demanded a
list of contractors Jacobson had already engaged to make repairs to the Property. Jacobson
replied that it had made a number of repairs to the Property and was in the process of completing
others, that it had been in contact with Hilbill regarding the repairs to be made, and that it
considered these actions to fulfill its obligations under the Leases. Although it is unclear exactly
how events unfolded from this point, Jacobson, to date, has not paid Hilbill the rent and other
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expenses for the month of September 2012. Hilbill ultimately paid for several repairs to the
Property, totaling approximately $120,000, and has not received compensation for these repairs
from Jacobson.
On July 31, 2013, Hilbill filed suit against Jacobsen for breach of lease, requesting an
award of rent and other expenses for the month of September, 2012, as well as an award for the
cost of repairs which Hilbill made to the Property. On August 23, 2013, Jacobson removed the
matter to federal court, based on diversity jurisdiction. The current Case Management Order
(“CMO”) required the parties to disclose information and exchange documents, pursuant to
Federal Rule of Civil Procedure 26(a)(1), no later than March 10, 2014 [ECF No. 29]. The CMO
further states discovery shall be completed no later than October 20, 2014.
On May 20, 2014, Hilbill made its First Request for Production of Documents Directed to
Defendant [ECF No. 38 at 4-12]. Among other things, Hilbill requested every document relied on
by Jacobsen in answering Plaintiff’s First Set of Interrogatories; every written communication by
or between Jacobsen and Hilbill concerning the three leases and their amendments; every
document relating to or constituting evidence of the “millions of dollars in repairs” Jacobsen
claimed it made to the Property, in a letter dated September 20, 2012; every document relating to
or constituting evidence of “repairs” Jacobsen claimed it made, in a letter dated September 28,
2012; documents concerning repairs for various fixtures, systems, equipment, and structures;
documents Jacobsen believes support its contention that Jacobsen is not the successor in interest
to the Original Lessees; documents Jacobsen believes support its Second and Third Affirmative
Defenses to Hilbill’s First Amended Complaint; documents relating to the allocations of costs,
expense, and taxes in accordance with the Leases; and every document by or between Hilbill and
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the Original Lessees, regarding the Property or Leases.
Jacobsen responded with Defendant’s Objections to Plaintiff’s First Request for
Production of Documents on June 23, 2014 [ECF No. 38 at 17-22]. Jacobsen objected to every
request on the basis of relevance and overbreadth. Jacobsen further objected that, as to some of
the requests, the terms “Lease” and “Property” were not defined, or the request was not limited in
time.
In its “Motion to Compel Responses to its First Request for Production of Documents
from Defendant,” Hilbill states it has attempted to address Jacobsen’s failure to respond, and to
coordinate mediation in accordance with the Court’s CMO. Hilbill reports making numerous
efforts, via email, regular mail, telephone calls, and voice mail messages, in attempt to confer
with Jacobsen regarding discovery and mediation, but receiving no response to these
communications from Jacobsen [ECF No. 38]. In support of its Motion to Compel, Hilbill
submits copies of various communications it sent to Jacobsen in efforts to address Jacobsen’s
lack of response to its production requests, and to coordinate mediation. Hilbill contends
Jacobsen has made no effort to find responsive documents, and has not invited Hilbill to search
Jacobsen documents at Jacobsen’s place of business, to identify documents that would be
responsive to Hilbill’s requests.
Hilbill asserts its production requests are narrowly tailored and targeted to the documents
relevant to the specific claims and defenses asserted by Jacobsen [ECF No. 39]. Hilbill argues
these documents are related to Jacobsen’s positions and defenses, and says Jacobsen has refused
to produce a single document, even though the documents called for are clearly relevant and
discoverable. Hilbill asks the Court to compel Jacobsen to respond without objection, and to
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award Hilbill the costs and fees incurred in attempting to secure Jacobsen’s productions.
In its Response, Jacobsen claims Hilbill’s requests seek to impose on Jacobsen an
enormous burden to search for large quantities of irrelevant documents [ECF No. 40]. Jacobsen
claims Hilbill did not serve it with any interrogatories, and Jacobsen contends what repairs it
made during the term of the lease is irrelevant to the matter at hand. According to Jacobsen, the
only relevant repairs are those identified in the Repair Exhibits. Jacobsen argues documents
related to repairs discussed in letters it sent to Hilbill’s attorney are irrelevant, as those repairs are
not in the Repair Exhibits. Jacobsen, however, withdraws its objections regarding the requests,
contained in paragraphs 8 through 10, for documents concerning its status as “successor in
interest” to the Original Lessees; and regarding documents supporting its Second and Third
Affirmative Defenses to Plaintiff’s First Amended Complaint.
Hilbill has filed a Reply [ECF No. 41], arguing the requested documents are relevant,
because they speak to Jacobsen’s affirmative defense in which it claims it is not a successor in
interest to the Original Lessees. Hilbill contends Jacobsen, by stating it has reams of documents
regarding the matter, has placed the successor-of-interest matter in issue, and Hilbill argues that
no documents would exist for discovery, unless Jacobsen is the successor of interest. Hilbill
states it is entitled to the requested documents, to demonstrate the veracity of its allegations
against Jacobsen and the absence of Jacobsen’s defenses, and to show the Jacobsen’s defenses
are not well-founded.
On September 9, 2014, the Court conducted a hearing on Hilbill’s Motion to Compel
[ECF No. 43]. During the proceedings, Hilbill conceded that the document request contained in
paragraph 1 of “Plaintiff’s First Request for Production of Documents” is moot, as Hilbill has not
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served Jacobsen with the referenced interrogatories. Hilbill contends, however, it is entitled to
production of the documents it has requested in paragraphs 2 through 4, due to Jacobsen’s
litigation position that it is not a successor-in-interest to the terms of two (hereinafter referred to
as “Lease 1” with AWI, and “Lease 3” with WSI) of the three Leases between Hilbill and the
Original Lessees. Hilbill argues it is entitled to any relevant evidence that would lead to
discovery of admissible evidence. Hilbill further contends its document requests contained in
paragraphs 5 through 7 are targeted specifically to statements made by Jacobsen’s legal counsel
in the September 2012 letters. As to its eleventh production request (due to a typographical
error, mislabeled as a second paragraph “10”), Hilbill argues it is entitled to internal documents
and communications showing how Jacobsen allocated expenses regarding the Property, because
such information supports Hilbill’s Complaint allegations that Jacobsen operated business under
Lease 3. During the hearing, Hilbill informed the Court it had served Plaintiff’s Second Request
for Production, requesting insurance information pertaining to the Property. Hilbill reports,
however, that to date, it has received no documents responsive to any of its requests.
In response, Jacobsen, asserting Plaintiff’s claim was limited to rent for the month of
September, 2012, and repairs made to the property, reiterated during the proceedings its
contention that the document requests were too broad, and not relevant to Plaintiff’s claim.
Jacobsen states it is not the originator of the Original Lessees, Plaintiff does not allege when
Jacobsen became liable under the leases, and Jacobsen does not have those documents. In
response to the Court’s query, Jacobsen stated that it could not represent when Jacobsen became
a successor-in-interest to the Original Lessees. Jacobsen further asserts its belief that its
withdrawal of objections to the requests contained in paragraphs 8 through 10 “resolves” this
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issue. Jacobsen contends how it allocates information internally is not relevant to whether
Jacobsen paid rent for September 2012. Jacobsen claims Plaintiff’s requests provide no time
frame limiting the period during which repairs were made to the property, and argues a request
for documents dating back to 2000 is overbroad. Jacobsen argues Plaintiffs do not need twelve
years of documents pertaining to allocation of costs, expenses, personnel salaries, email
communications, etc., and suggests any production be limited to the six-month period prior to
lease termination.
Hilbill states it identified the seven or eight individuals that would have a footprint in
emails or correspondence relevant and responsive to its requests for communications between
Hilbill and Jacobsen regarding the leases. Hilbill argues Jacobsen’s internal documentation of
expense allocation is very important in this matter, because Jacobsen asserts, as an affirmative
defense, that it is not the successor-in-interest to Lease 1 or Lease 3. Hilbill further argues the
matter is not resolved by Jacobsen’s withdrawal of its objections to Hilbill’s requests in
paragraphs 8 through 10, because the concession would yield only documents that support
Jacobsen’s asserted defense, and Hilbill is also entitled to receive documents that undercut
Jacobsen’s position.
Parties in federal court are entitled to receive relevant information that could lead to
admissible evidence. See Fed. R. Civ. P. 26(b)(1) (“Parties may obtain discovery regarding any
nonprivileged matter that is relevant to any party’s claim or defense – including the existence,
description, nature, custody, condition and location of any documents . . ..”) Jacobsen’s failure to
to produce even one document responsive to Hilbill’s requests is unreasonable. After
consideration of the issues, the parties’ submissions, and their arguments, the Court finds, subject
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to certain exceptions set forth below, the relevant time period for document production is 2006
through present. Jacobsen shall produce copies of all leases regarding the Property, into which it
entered, with any entity, from 2006 to present; evidence of insurance policies pertaining to the
Property that are particular to each lease or Original Lessee; real estate payments made in
conjunction with the Property; construction requests, bids, invoices, or statements concerning the
Property; names of companies performing construction or repairs to the Property; and documents
showing allocation of costs for insurance, real estate payments, construction, repairs, and real
estate taxes pertaining to the Property. Jacobsen shall produce documents relating to its
budgeting for repairs and its payment of real estate taxes that are subject to Lease 1 and Lease 3,
for the time period 2006 through 2012. The Court shall hold in abeyance Hilbill’s request for an
award of costs and fees incurred in securing Jacobsen’s responsive productions.
During the hearing, the Court observed, given the present status, the parties will be unable
to complete discovery by the present October cut-off date. Consequently, the Court directed the
parties to confer, prepare, and submit a proposed Amended CMO within two weeks of this
Order.
Accordingly,
IT IS HEREBY ORDERED that Plaintiff’s “Plaintiff’s Motion to Compel Responses to
its First Request for Production of Documents from Defendant” [ECF No. 38] is GRANTED.
IT IS FURTHER ORDERED that Jacobsen shall produce copies of all leases regarding
the Property, into which it entered, with any entity, from 2006 to present; evidence of insurance
policies pertaining to the Property that are particular to each lease or Original Lessee; real estate
payments made in conjunction with the Property; construction requests, bids, invoices, or
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statements concerning the Property; names of companies performing construction or repairs to
the Property; and documents showing allocation of costs for insurance, real estate payments,
construction, repairs, and real estate taxes pertaining to the Property. Jacobsen shall produce
documents relating to its budgeting for repairs and its payment of real estate taxes that are subject
to Lease 1 and Lease 3, for the time period 2006 through 2012.
IT IS FURTHER ORDERED that Hilbill’s request for an award of costs and fees
incurred in securing Jacobsen’s responsive productions is HELD in ABEYANCE.
IT IS FURTHER ORDERED that the parties shall confer, prepare, and submit a
proposed Amended Case Management Order to the Court, within two weeks of this Order.
So Ordered this 10th day of September, 2014.

E. RICHARD WEBBER
SENIOR UNITED STATES DISTRICT JUDGE

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