Zurich American Insurance Company et al v. Dobson Brothers Construction Company et al
Filing
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ORDER - that Zurich's Motion to Compel Production of Subpoenaed Documents (Filing No. 13 ) is granted. Lutz shall produce the requested documents within ten (10) days of this Order. Ordered by Magistrate Judge Susan M. Bazis. (LKO)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
ZURICH
AMERICAN
INSURANCE
COMPANY, and AMERICAN GUARANTEE
AND LIABILITY INSURANCE COMPANY,
8:18CV161
Plaintiffs,
ORDER
vs.
DOBSON BROTHERS CONSTRUCTION
COMPANY, and
DOBSON BROTHERS
CONSTRUCTION COMPANY, INC.,
Defendants.
This matter is before the Court upon Zurich American Insurance Company and American
Guarantee and Liability Insurance Company’s (collectively, “Zurich”) Motion to Compel
Production of Subpoenaed Documents. (Filing No. 13.) The motion will be granted.
BACKGROUND
On January 6, 2017, the United States District Court for the Northern District of Illinois
entered judgment in favor of Zurich against Dobson Brothers Construction Company (“Dobson”)
in the amount of $616,362.37, plus interest. (Filing No. 1.) The judgment was registered in this
Court on December 13, 2017. (Id.)
According to Zurich, post-judgment discovery revealed that Dobson extended
shareholder loans to Sam Olson (“Olson”), Dobson’s chairman and CEO, and that Olson still
owes Dobson $487,228.00 on these loans. Zurich maintains that Olson has refused to pay
Zurich, claiming that he discharged all of his $487,228.00 obligation to Dobson by (1)
quitclaiming a piece of real property worth $366,039.28 to Cornerstone Bank to reduce Dobson’s
debt with the bank; (2) personally paying $102,936.54 of Dobson’s debts; and (3) contributing
$18,252.00 of his personal Wells Fargo stock to reduce Dobson’s debt with Cornerstone Bank.
(Filing No. 15-3.)
In an effort to ascertain whether Olson’s alleged actions entitle him to a discharge, Zurich
issued several subpoenas to produce documents and a subpoena to testify at a deposition. On
February 1, 2018, Zurich served a subpoena upon Lutz & Company, P.C. (“Lutz”), an
accounting firm that advised Dobson and Olson. The subpoena requests the production of taxrelated documents regarding Dobson and Olson. (Filing No. 3.) According to Zurich, Lutz is
willing to cooperate with the subpoena, but refuses to produce the documents absent a court
order because Lutz has been unable to secure Dobson and Olson’s consent for release of the
documents. (Filing No. 15.)
DISCUSSION
Zurich requests that the Court compel Lutz to produce information related to Dobson and
Olson as requested in the subpoena. Federal Rule of Civil Procedure 69 provides that “[i]n aid of
the judgment or execution, the judgment creditor . . . may obtain discovery from any person.”
Fed. R. Civ. P. 69(a)(2). However, a heightened showing of relevance and necessity is required
for discovery of tax information. See Home Instead v. Florance, No. 8:12CV264, 2013 WL
5979629, *9 (D. Neb. Nov. 8, 2013). When assessing whether this showing has been made, the
court first determines if the moving party has established that the tax information is relevant. Id.
“If relevancy is shown, the responding parties must produce the [information] unless they show
there is no compelling need for production . . . ; that is, the relevant information . . . is readily
obtainable from another source.” Id. (internal quotation omitted).
The Court finds that the requested information is relevant and should be produced.
Zurich’s judgment against Dobson remains outstanding. Discovery has revealed that Olson
owed Dobson $487,228.00 as of 2016. However, Olson claims that he discharged this obligation
by (1) quitclaiming a piece of real property worth $366,039.28; (2) personally paying
$102,936.54 of Dobson’s debts; and (3) contributing $18,252.00 of his personal Wells Fargo
stock to reduce Dobson’s debt. The requested documents would provide more information
regarding these alleged actions. Moreover, Lutz, Olson and Dobson have made no effort to
demonstrate that there is no compelling need for production of the information. They have not
responded to Zurich’s Motion to Compel.
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Accordingly,
IT IS ORDERED that Zurich’s Motion to Compel Production of Subpoenaed
Documents (Filing No. 13) is granted. Lutz shall produce the requested documents within ten
(10) days of this Order.
Dated this 31st day of May, 2018.
BY THE COURT:
s/ Susan M. Bazis
United States Magistrate Judge
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