Tramp v. Associated Underwriters, Inc.

Filing 173

ORDER - Tramp's Motion to Compel Production of Documents (Filing No. 158 ) is denied. Tramp's Motion for Leave to Serve Additional Post-Judgment Interrogatories (Filing No. 161 ) is granted. Ordered by Magistrate Judge F.A. Gossett. (GJG)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
MARJORIE TRAMP,
Plaintiff,
v.
ASSOCIATED UNDERWRITERS,
INC.,
Defendant.

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8:11CV371
Order

This matter is before the court on the Motion to Compel Production of Documents
(Filing No. 158) and Motion for Leave to Serve Additional Post-Judgment Interrogatories
(Filing No. 161) filed by the plaintiff, Marjorie Tramp. For the reasons that follow, the
court will deny the motion to compel and grant the motion for leave to serve additional
interrogatories.

BACKGROUND
On June 19, 2015, a jury returned a verdict in favor of Tramp on her claim for
retaliation under the Age Discrimination in Employment Act (“ADEA”) (29 U.S.C. § 626,
et seq.) against Associated Underwriters, Inc. (“AU”). (Filing No. 130). Judgment was
entered in favor of Tramp on June 22, 2015, in the amount of $257,361.56, plus
post-judgment interest at the rate of .27 percent per annum. (Filing No. 135). On
October 16, 2015, Plaintiff was also awarded $132,198.80 in attorney’s fees and $6,522.12
in costs. (Filing No. 154). AU asserts Tramp has been provided hundreds of pages of
documents confirming AU has no assets to pay Tramp’s judgment. (Filing No. 169 at p.
3). The present motions concern Tramp’s post-judgment discovery in aid of execution of
the judgment.
On November 25, 2015, Tramp served post-judgment requests for production of
documents on AU. (Filing No. 160-3). Tramp requested AU’s financial statements,
including balance sheets, from 2009 until the present. (Filing No. Filing No. 160-3 at p.

4). Tramp asserts the documents produced by AU on January 8, 2016, were incomplete
and did not contain a balance sheet for June 30, 2014. (Filing No. 158).
On February 25, 2016, Tramp served AU a notice of intent to issue subpoena duces
tecum pursuant to Rule 45 of the Federal Rules of Civil Procedure on four banks and on
Relinco, Inc. (“Relinco”), all non-parties. (Filing No. 157). Relinco is a registered trade
name of AU and was formerly the “breadwinn[ing]” division of AU that “made all of the
money at [AU].” (Filing No. 160-7; Filing No. 167-1 at CM/ECF p. 51). Greg Gurbacki,
the president and owner of AU, filed Relinco’s articles of incorporation. (Filing No.
160-8 at pp. 1-4). The subpoena to Relinco seeks its corporate bylaws and amendments,
corporate and shareholder meeting minutes, balance sheets, monthly account statements,
general ledgers, chart of accounts, trial balances for every account listed on each general
ledger, income and expense statements, all documents listing sources of income, including
client or customer lists from the years 2011 to 2016, all documents created in the initial
organization of the corporation and operation of the corporation prior to 2011, and all
documents evidencing the ownership of proprietary rights to the trade name Relinco or the
service mark of Relinco. (Filing No. 157 at p. 2). Relinco and AU objected to the
subpoena on the bases that the requests were overbroad, unduly burdensome, and not
reasonably calculated to lead to the discovery of relevant admissible evidence. (Filing
No. 160-2).

Tramp filed the motion to compel seeking an order compelling Relinco to

produce documents responsive to the subpoena and an order compelling AU to produce its
balance sheet for June 30, 2014. (Filing No. 158).
Tramp also filed a motion for leave to serve additional interrogatories. (Filing No.
161).

Tramp served post-judgment interrogatories on AU on November 25, 2015.

(Filing No. 161).

On

January 8, 2016, AU returned its responses to Tramp’s

interrogatories, objecting to each interrogatory beyond Interrogatory No. 5(f) because
Tramp had exceeded the maximum number of permissible interrogatories. (Filing No.
163-2).

Tramp requests permission to serve AU sixteen (16) additional numbered

interrogatories, or forty (40) total interrogatories including subparts. (Filing No. 163-1).

DISCUSSION
Under Rule 69(a) of the Federal Rules of Civil Procedure, a judgment creditor or a
successor in interest whose interest appears of record may obtain discovery from any
person, including the judgment debtor. Fed. R. Civ. P. 69(a)(2). Discovery devices in
the state and federal court systems include, but are not limited to, debtor’s examinations,
depositions upon oral examination or written questions, written interrogatories, requests
for the production of documents or things, permission to enter upon land or other property
for inspection and other purposes, physical and mental examinations, requests for
admission, and subpoenas.

United States v. Johnson, No. 8:09CV146, 2010 WL

1949680, at *1 (D. Neb. May 14, 2010).
The law allows judgment creditors to conduct full post-judgment discovery to aid in
executing judgment, and the plaintiff “ ‘is entitled to a very thorough examination of the
judgment debtor.’ ” Credit Lyonnais, S.A. v. SGC Intern. Inc., 160 F.3d 428, 430 (8th Cir.
1998). “The procedure on execution--and in proceedings supplementary to and in aid of
judgment or execution--must accord with the procedure of the state where the court is
located, but a federal statute governs to the extent it applies.” Fed. R. Civ. P. 69(a)(1); see
Neb. Rev. Stat. §§ 25-1564 through 25-1580.

I.

Motion to Compel
Tramp’s motion to compel requests this court compel AU to produce its balance

sheet as of June 30, 2014. (Filing No. 158). AU has now provided the requested balance
sheets to Tramp. (Filing No. 170 at p. 1). Therefore, the court denies as moot the motion
to compel as to AU.
AU objects to Tramp’s motion to compel production of documents on behalf of
Relinco. “[An] adverse party has standing to object to a third-party subpoena on grounds
of relevance or to protect a personal right or privilege in the information requested.”
Jenkins v. Pech, No. 8:14CV41, 2015 WL 728305, at *3 (D. Neb. Feb. 19, 2015). AU has
not asserted a personal privilege in the information requested from Relinco and is therefore

limited to objecting to the subpoena’s relevance. See Auto-Owners Ins. Co. v. Southeast
Floating Docks, Inc., 231 F.R.D. 426, 429 (M.D. Fla. 2005) (A party has standing to move
for a protective order if a third-party subpoena seeks irrelevant information). “Parties
may obtain discovery regarding any nonprivileged matter that is relevant to any party’s
claim or defense and proportional to the needs of the case[.]” Fed. R. Civ. P. 26(b)(1).
Discovery, in aid of execution of a judgment, into the assets of a nonparty to a suit is
permissible where the relationship between the judgment debtor and the nonparty “is
sufficient to raise a reasonable doubt about the bona fides of any transfer of assets between
them.” Credit Lyonnais, S.A. v. SGC Int'l, Inc., 160 F.3d 428, 431 (8th Cir. 1998).
“[A]sset discovery should be tailored to the specific purpose of enabling a judgment
creditor to discover assets upon which it can seek to execute a judgment and that the
judgment debtor’s discovery should not devolve into a fishing expedition for irrelevant or
cumulative information which does not advance that purpose.” E.I. DuPont deNemours
& Co. v. Kolon Indus., Inc., 286 F.R.D. 288, 292 (E.D. Va. 2012). In Nebraska, a creditor
may levy execution on assets “transferred, concealed, or removed with intent to hinder,
delay, or defraud creditors[.]” See Neb. Rev. Stat. §§ 36-703 to 36-708. “A conveyance
in fraud of creditors may be effected by the organization of a corporation and the transfer of
property to it with intent to hinder, delay, or defraud creditors.” First Nat. Bank of Omaha
v. First Cadco Corp., 203 N.W.2d 770, 778 (Neb. 1973).
The relationship between Relinco and AU raises some doubts as to the bona fides of
the transfer of assets. AU sold Relinco for $300,000, on December 1, 2011, less than two
months after Tramp filed her complaint. (Filing No. 171-1; Filing No. 1). The $300,000
sales price was carried by AU as an account receivable until June 30, 2014. Gurbacki,
AU’s president and sole shareholder, filed Relinco’s articles of incorporation.
Additionally, Relinco is a registered trade name of AU. (Filing No. 160-8 at pp. 1-4;
Filing No. 160-7). Tramp should be permitted to perform some discovery with respect to
the formation of Relinco and any transfer of AU’s assets to Relinco to determine whether
Relinco was formed with intent to hinder, delay, or defraud creditors, to the extent that

such discovery has not already been provided to Tramp. However, without more evidence
or factual details tending to demonstrate that AU fraudulently transferred its assets to
Relinco with the intent to hinder or delay creditors, the documents requested in the
subpoena to Relinco are not relevant at this time.

Tramp broadly seeks Relinco’s

corporate bylaws and amendments, corporate and shareholder meeting minutes, balance
sheets, monthly account statements, general ledgers, chart of accounts, trial balances for
every account listed on each general ledger, income and expense statements, and all
documents listing sources of income, including client or customer lists from the years 2011
to 2016. If, at a later time, Tramp is able to make a threshold showing of some sort of
fraudulent intent in the formation of Relinco, the court will reconsider Tramp’s requests for
documents related to Relinco’s assets. Therefore, the court will deny Tramp’s motion to
compel as to Relinco.

II.

Motion for Leave to Serve Additional Interrogatories
Tramp requests permission to serve AU sixteen (16) additional numbered

interrogatories, or forty (40) total interrogatories including subparts. (Filing No. 163-1).
Unless otherwise stipulated or ordered by the court, a party may serve on any other party
no more than 25 written interrogatories, including all discrete subparts. Leave to serve
additional interrogatories may be granted to the extent consistent with Rule 26(b)(1) and
(2). Fed. R. Civ. P. 33. In general, Tramp’s proposed additional interrogatories request
information about AU’s finances, property interests, property transfers, debts, and lenders.
(Filing No. 163-1). AU argues the answers to Tramp’s interrogatories can be found in
documents currently in Tramp’s possession. In reviewing Tramp’s proposed
interrogatories, the court finds good cause exists to expand the number of permissible
interrogatories to include the proposed interrogatories. To the extent that the information
sought by Tramp is available in documents given to her during the pretrial litigation
investigation, AU may incorporate those documents by reference in its answers.

Accordingly, the court grants Tramp’s motion for leave to serve additional interrogatories
on AU.

III.

Quashing Further Discovery
Finally, AU argues in its brief that Tramp’s April 4, 2016, notice (Filing No. 166) of

intent to issue subpoena duces tecum on five nonparty insurance companies, Roll the
Bones, LLC, and Farmers National Company, should be quashed. (Filing No. 169 at pp.
4-7). Although AU filed a notice of service on Tramp’s counsel of written objections to
the subpoena (Filing No. 168), there is no motion pending before this court related to any
unresolved objections to Tramp’s April 6, 2016, notice of intent to issue subpoena. Under
this court's local rules, “[n]o subpoena may be issued for documents or premises whose
inspection or production is contested under this rule until the parties resolve the objections.
Any unresolved objections will be resolved by the court on appropriate motion filed in
accordance with NECivR 7.1.” NECivR 45.1(b); see also Fed. R. Civ. P. 45. As no
appropriate motion has been filed, the court finds it unnecessary to address AU’s
arguments at this time. The parties are instructed to meet and confer to attempt to resolve
any objections to discovery not addressed in this order before filing an appropriate motion.
Accordingly,
IT IS ORDERED:
1.
Tramp’s Motion to Compel Production of Documents (Filing No. 158) is
denied.
2.
Tramp’s Motion for Leave to Serve Additional Post-Judgment
Interrogatories (Filing No. 161) is granted.

DATED: May 24, 2016.
BY THE COURT:
s/ F.A. Gossett
United States Magistrate Judge