Moulton v. Bane et al

Filing 114

ORDER granting 79 Motion for Attorney Fees. Plaintiff is awarded $2854 in fees. So Ordered by Judge Joseph A. DiClerico, Jr.(gla)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
Thomas M. Moulton
v.

Civil No. 14-cv-265-JD
Opinion No. 2015 DNH 215

David Bane, et al

O R D E R
Thomas M. Moulton brought suit against David Bane and his
company, Prime Choice Enterprises, LLC (“PCE”), after their
business relationship failed.

In response, Bane and PCE brought

counterclaims against Moulton and third-party claims against
Eric Emery, King’s Highway Realty Trust, Ltd. Partnership, and
North Madison Hill LLC.

Moulton moves for an award of expenses

incurred in successfully moving to compel Bane and PCE to
produce documents in response to his requests for production.
Standard of Review
When a motion to compel is granted, “the court must, after
giving an opportunity to be heard, require the party . . . whose
conduct necessitated the motion, the party or attorney advising
that conduct, or both to pay the movant’s reasonable expenses
incurred in making the motion, including attorney’s fees.”
R. Civ. P. 37(a)(5)(A).

Fed.

The court will not require payment if

the “(i) the movant filed the motion before attempting in good

faith to obtain the disclosure or discovery without court
action; (ii) the opposing party's nondisclosure, response, or
objection was substantially justified; or (iii) other
circumstances make an award of expenses unjust.”

Id.

The party

facing sanctions under Rule 37 bears the burden of showing that
they should not be imposed.

See R & R Sails, Inc. v. Ins. Co.

of Penn., 673 F.3d 1240, 1246 (9th Cir. 2012); Novak v. Wolfposs
& Abramson LLP, 536 F.3d 175, 178 (2d Cir. 2008); Walker v.
Segway Inc., 2013 WL 3754864, at *1 (D.N.H. July 15, 2013).
Background
The claims in this case arise from the financial collapse
of The Meat House, and the parties’ interests in The Meat House
assets.

Moulton brought suit against Bane and PCE, alleging

that Bane made fraudulent misrepresentations concerning
investment opportunities in PCE to induce him to assist PCE in
acquiring The Meat House assets and breached their agreement.1
Bane and PCE brought counterclaims against Moulton for tortious
interference with their economic relationships and for
conversion.

On August 3, 2015, Moulton moved to compel Bane and

PCE to produce documents in response to (1) Requests 20-22 in
Moulton’s first set of requests for production to Bane and PCE

1

The complaint has been amended and now alleges additional
claims.
2

and (2) each of the requests in the second sets of requests for
production that Moulton propounded on Bane and PCE.2
A. Requests 20-22
Moulton propounded his first set of requests to Bane and PCE
on October 30, 2014.3

Requests 20-22 in that set seek documents

concerning PCE’s and Bane’s efforts to “solicit investments in
PCE,” “obtain financing for PCE,” and “seek investors in PCE.”
After initially objecting to Requests 20-22, Bane and PCE agreed
in March of 2015 to produce responsive documents pertaining to a
limited time frame.

As explained more fully in the court’s order

on the motion to compel, however, see document no. 68, Bane and
PCE failed to produce the documents over the next five months, as
their

counsel

negotiated

with

Moulton

over

multiple

proposed

protective orders that they asserted were a condition of producing
documents in response to Requests 20-22.
By the time Moulton filed his motion to compel on August 3,
which was over nine months after Moulton propounded the

Although the motion to compel was filed by both Moulton
and Emery, only Moulton propounded the disputed discovery.
Because of this, the court determined that Emery had not shown
that he could move to compel responses. See Order, document no.
68, at 1. Only Moulton moves for expenses here.
2

The first set of requests attached as an exhibit to the
motion to compel are only propounded to PCE. However, in his
motion to compel, Moulton states that he propounded a first set
of requests to Bane and PCE. Bane and PCE did not dispute that
the first set of requests was made to both of them.
3

3

requests, Bane and PCE had not produced responsive documents.
In its objection, filed seventeen days after Moulton moved to
compel, Bane and PCE argued that the motion was moot with
respect to Requests 20-22 because “[a]s of the date of this
filing, PCE and Bane have identified and produced responsive
documents.”4

Based on this representation, the court determined

that Bane and PCE had failed to produce all responsive documents
and therefore ordered them to produce all of the documents that
Moulton requested in his motion to compel.
B. Second Sets of Requests for Production
Moulton propounded a second set of requests for production
of documents to PCE on June 3, 2015, which requested documents
concerning PCE’s equipment and inventory and its financial
records.

On July 12, 2015, Moulton also propounded a second set

of requests to Bane, which requested identical documents, but
concerning “PCPA, LLC, Prime Choice Brands, LLC, and /or any
other entity related to the retail butcher business in which
[Bane] or PCE have an ownership interest.”

Bane and PCE

responded on July 15, objecting to both sets of requests as,
among other things, overbroad, irrelevant, and unduly

Moulton filed a reply, in which he acknowledged that Bane
and PCE had made a small production on August 10, but disputed
that the motion was moot because the production did not contain
documents concerning PCE’s dealings with investors.
4

4

burdensome.

In a July 23 phone conversation with Moulton’s

counsel, Bane and PCE confirmed that they would not produce
documents in response to the second sets.
In its order on the motion to compel, the court held that
the financial information sought in the second sets of requests
was relevant to Bane’s and PCE’s tortious interference
counterclaims for lost profits, which were premised on Bane and
PCE losing the opportunity to operate retail butcher stores in
New Hampshire and Maine.

The court also held that the equipment

and inventory documents were relevant to Bane’s and PCE’s
conversion counterclaims for consequential damages.

The court,

however, limited the second set of requests propounded to Bane
as only seeking documents concerning The Meat House-New Jersey
LLC and Prime Choice Enterprises Retail, LLC, which operated
retail butcher stores in New Jersey and Virginia, respectively.
This limitation was based on Bane’s and PCE’s representation
that those two entities were the only ones they owned that
operated retail butcher stores and Moulton’s clarification in
his motion to compel that he was not seeking documents from
entities not operating retail butcher businesses.
Discussion
Moulton moves for an award of attorney’s fees under Federal
Rule of Civil Procedure 37(a)(5)(A), in the amount of $2,905.

5

Bane and PCE object, arguing that the court should not issue an
award because they were substantially justified in refusing to
produce documents in response to Moulton’s second set of
requests and that other circumstances make an award of expenses
unjust.
A.

Substantially Justified
Substantial justification exists if the party's “position

‘has a reasonable basis in law and fact’ ... or, stated another
way, [if] ‘a reasonable person could think it correct.’”
Dantran, Inc. v. U.S. Dept. of Labor, 246 F.3d 36, 40–41 (1st
Cir. 2001) (quoting Pierce v. Underwood, 487 U.S. 552, 566 n. 2
(1988)); see also Josendis v. Wall to Wall Residence Repairs,
Inc., 662 F .3d 1292, 1314 (11th Cir. 2011).

The burden is on

the party facing sanctions to prove that its violation was
substantially justified.

Davis v. Jacob S. Ciborowski Family

Tr., 2012 WL 5904816, at *1 (D.N.H. Nov. 26, 2012).
Bane and PCE argue that their refusal to produce the
requested financial records was substantially justified for two
reasons.

First, they argue that a reasonable person could have

concluded that the financial records that Moulton requested were
not relevant.

Second, they argue that a reasonable person could

have concluded that Moulton’s request was overbroad because it
pertained to several categories of documents for six entities,

6

some of which were not engaged in operating retail butcher
shops.
a. Relevance of Financial Records
“Parties may obtain discovery regarding any nonprivileged
matter that is relevant to any party’s claim or defense . . .
[which] need not be admissible at trial if the discovery appears
reasonably calculated to lead to the discovery of admissible
evidence.”

Fed. R. Civ. P. 26(b)(1).

It is well-recognized

that the scope of discovery under this standard is broad.
Remexcel Managerial Consultants, Inc. v. Arlequin, 583 F.3d 45,
52 (1st Cir. 2009) (“The scope of discovery is broad, and ‘to be
discoverable, information need only appear to be reasonably
calculated to lead to the discovery of admissible evidence.’”);
see also 8 Charles Alan Wright & Arthur Miller, Fed. Practice &
Procedure § 2008, 3 (3d ed. 2004) (“Most courts which have
addressed the issue find that . . . relevancy under Rule 26 is
extremely broad.”).
In support of their contention that a reasonable person
could conclude that the financial statements were not relevant,
Bane and PCE rely on the rule requiring that lost profits be
proved with reasonable certainty and beyond speculation.

See

Miami Subs Corp. v. Murray Family Trust, 142 N.H. 501, 517
(1997).

Based on this rule, Bane and PCE argue that it was

reasonable for them to withhold the financial records for the
7

entities operating stores in Virginia and New Jersey because
such information would only be speculative as to any lost
profits in Maine and New Hampshire stores.
As Bane and PCE acknowledge, the reasonable certainty rule
is an evidentiary burden.

That burden requires that a party

seeking to recover lost profits prove the lost profits were
reasonably certain based on the total evidence that it has
adduced.

George v. Al Hoyt & Sons, Inc., 162 N.H. 123, 134

(2011) (“We will uphold an award of damages for lost profits if
sufficient data existed indicating that profits were reasonably
certain to result.”).

The rule provides no basis to argue that

information is outside the scope of discovery merely because
that information — in isolation — might not demonstrate lost
profits in a reasonably certain manner.

The request for

financial information was relevant to Bane’s and PCE’s
counterclaim for lost profits and, as such, only needed to be
reasonably calculated to lead to the discovery of admissible
evidence.
52.

See Fed. R. Civ. P. 26(b)(1); Arlequin, 583 F.3d at

Moulton’s request did not have to meet the more stringent

standard for proving lost profits on the merits, and it was not
reasonable for Bane and PCE to insist otherwise.5
Bane and PCE cited additional cases in their objection to
Moulton’s motion for expenses, all of which concern different
applications of the reasonable certainty standard. None of
those cases addressed the discoverability of financial
5

8

b. Overbreadth
Bane and PCE argue that they were substantially justified
in refusing to produce documents in response to Moulton’s second
set of requests because a reasonable person could have concluded
that the requests, which sought several categories of documents
from six entities, were overbroad and unduly burdensome.
Federal Rule of Civil Procedure 34 requires that “[a]n objection
to part of a request [for production] must specify the part and
permit inspection of the rest.”

Fed. R. Civ. P. 34(b)(2)(C).

As discussed in the court’s order on the motion to compel,
Moulton’s second sets of requests sought documents that were
generally relevant to the claims and defenses in this action.
If Bane and PCE believed that the requests covered documents
that were too burdensome to produce, they were required to
produce documents in response to the parts of the request that
were not unduly burdensome and to specifically object to the
parts of the requests that were.

It was not reasonable for Bane

and PCE to simply refuse to produce any documents because they
believed that portions of Moulton’s requests were overbroad.
See Fed. R. Civ. P. 34(b)(2)(c); see also Wultz v. Bank of China
information in establishing lost profits. Moreover, to the
extent those cases address new doctrines, they should have been
raised in the motion compel, not here. See MPD Accessories, B.V.
v. Urban Outfitters, Inc., 2013 WL 3816598, at *3 (S.D.N.Y. July
22, 2013) (holding that new arguments and contentions cannot be
used to avoid award under Rule 37(a)(5)(B)).
9

Ltd., 910 F. Supp. 2d 548, 560 (S.D.N.Y. 2012) (although
requests were overbroad, responding party “was obligated under
the Federal Rules to permit inspection of [relevant]
documents.”).
B.

Whether an Award Would Be Unjust
Alternatively, Bane and PCE argue that an award of expenses

to Moulton would be unjust.

Bane and PCE offer three “other

circumstances,” which they contend would make an award unjust
under the circumstances.

First, they argue that an award of

expenses would be unjust because their counsel cooperated with
Moulton to negotiate the scope of discovery and protective
orders.

Second, Bane and PCE argue that an award of expenses

would be unjust because Moulton has failed to identify any
prejudice.

Third, Bane and PCE argue that an award would be

unjust because the court concluded in its order on the motion to
compel that the financial information of the entities in New
Jersey and Virginia “could be probative.”
As discussed above, Bane and PCE improperly offered a
blanket objection to the second set of requests, and the court
is unaware of any efforts that it made to negotiate the scope of
those requests.

As for Requests 20-22, during those

negotiations, PCE informed Moulton’s counsel multiple times that
it would produce responsive documents.

10

Yet PCE waited over nine

months after Requests 20-22 were propounded and until Moulton
had already moved to compel to begin that production.

That is

precisely the type of dilatory production that Rule 37
addresses.

See Fed. R. Civ. P. 37(a)(5)(A) (providing award “if

the disclosure of the requested discovery is provided after the
motion was filed”).

Therefore, any cooperation in negotiating

production logistics is undermined by Bane’s and PCE’s failure
to produce documents, which necessitated the motion to compel.
Bane and PCE also contend that an award would be unjust
because Moulton has not identified any specific prejudice that
it suffered.

As discussed above, Bane and PCE, not Moulton,

bear the burden under Rule 37.

Moulton need not make any

showing to be entitled to reasonable expenses under Rule 37.

In

any event, there is ample evidence that Moulton did suffer
prejudice in the form of the fees and costs associated with
moving to compel discovery that he should have already had.
S.E.C. v. Yorkville Advisors, LLC, 2015 WL 855796, at *9
(S.D.N.Y. Feb. 27, 2015) (finding prejudice where party
“incurred both the harm of costs and attorneys’ fees in
litigating their motion to compel”).

For these reasons, Bane’s

and PCE’s prejudice arguments are unpersuasive.
Bane and PCE also argue that the court’s conclusion that
the financial records of the New Jersey and Virginia entities
“could be probative” is an acknowledgment that reasonable minds
11

can disagree over the relevance of that information.

But

whether information is discoverable under Rule 26 does not turn
on whether it is probative.

“While trial evidence is relevant

only if it is probative of a consequential fact, see Fed. R.
Evid. 401, evidence is relevant for discovery purposes even if
it only ‘appears reasonably calculated to lead to the discovery’
of evidence which would be admissible at trial.”

N.L.R.B v. New

England Newspapers, Inc., 856 F.2d 409, 414 n.4 (1st Cir. 1988)
(quoting Fed. R. Civ. P. 26(b)(1)).

Therefore, the court’s

conclusion that the requested information “could be probative”
is not tantamount to concluding that the information “could be
relevant.”
For these reasons, Bane and PCE have failed to demonstrate
that an award under Rule 37 would be unjust.

Accordingly, an

award under Rule 37 is warranted.
C.

Reasonable Expenses
Attorneys’ fees are included as part of reasonable expenses

under Rule 37(a)(5)(A).

As in other fee shifting contexts, an

award of reasonable attorneys’ fees under Rule 37 is typically
calculated by the lodestar method in which the court multiplies
the hours productively spent by a reasonable hourly rate.

See

Centennial Archaeology, Inc. v. AECOM, Inc., 688 F.3d 673, 679–
80 (10th Cir. 2012); Walker v. Segway Inc., 2013 WL 3754864, at

12

*2 (D.N.H. July 15, 2013).

“The obligation to support both the

time and rate components rests with the party seeking the
award . . . .”

Spooner v. EEN, Inc., 644 F.3d 62, 68 (1st Cir.

2011).
Moulton seeks $2,905 for attorneys’ fees for time expended
by attorney Michele E. Kenney and paralegal Kristina L. Knight
for preparing and filing the motion to compel, the reply, and
the motion for expenses.

In support, Moulton filed an affidavit

from Kenney that includes the pertinent billing records for
Kenney and Knight.

These records show that Kenney spent 6.5

hours working on the motion to compel, 1.0 hour on the reply,
and 3.0 hours on the motion for attorneys’ fees and the
supporting declaration, and that Knight spent .5 hours preparing
and filing the motion to compel.

In her affidavit, Kenney

states that she is a partner in the Litigation Practice Group of
Pierce Atwood LLP, that she specializes in commercial
litigation, and that her billing rate for this case is $270 per
hour.

Kenney also states in her affidavit that Knight’s billing

rate is $140 per hour.

Bane and PCE do not object to the hours

or rates that Kenney and Knight billed.
After review of Moulton’s submission, and noting that Bane
and PCE do not object, the court finds that Kenney’s rate of
$270 per hour is reasonable.

The rate that private counsel

charges for her services “while not conclusive, is a reliable
13

indicium of market value.”

United States v. One Star Class

Sloop Sailboat, 546 F.3d 26, 40 (1st Cir. 2008).

Furthermore,

Kenney’s rate comports with comparable rates in this
jurisdiction.

See Forcier v. Creditors Specialty Serv., Inc.,

2014 WL 6473043, at *14 (D.N.H. Nov. 17, 2014) (finding $295 per
hour reasonable for partner work in civil litigation); N.H. Bar
Ass’n, The 2014 Economics of Law Practice, Part 2 4 (survey of
New Hampshire attorneys engaged in a commercial trial practice
charge a median rate of $298 per hour).

The court also finds

that the $140 per hour rate for Knight is reasonable.
In addition, the court finds that the time spent by Kenney
and Knight on the motion to compel, the reply, and the motion
for expenses was productive, with one exception.6

The billing

records show one entry for .5 hours in which Kenney “draft[ed]
and fil[ed]” the reply and the leave to reply.

Because the

filing of legal documents is clerical work, the court will
adjust .3 of the hours in this entry to a reduced rate of $100
per hour.

See McMillan v. Mass. Soc. For Prevention of Cruelty

to Animals, 140 F.3d 288, 308 (1st Cir. 1998) (“[C]lerical or

Drafting a request for attorneys’ fees is considered part
of “making the motion” to compel and is therefore recoverable
under Rule 37. See, e.g., Chesemore v. Alliance Holdings, Inc.,
2015 WL 5093283, at *5 (W.D. Wis. 2015); Schroeder v. H & R
Block Eastern Enterprises, Inc., 2013 WL 1249052 (M.D. Tenn.
2013); Sure Safe Indus. Inc. v. C & R Pier Mfg., 152 F.R.D. 625,
627 (S.D. Cal. 1993).
6

14

secretarial tasks ought not to be billed at lawyers’ rates, even
if a lawyer performs them.”).
D.

Calculation of Fees
The fees to be awarded are calculated as follows:

Michele E. Kenney

10.2 hours at $270 per
hour

$2,754.00

.3 hours at $100 per hour
Kristina L. Knight

$30.00

.5 hours at $140 per hour

$70.00

TOTAL

$2,854.00
Conclusion

For the foregoing reasons, the plaintiff’s motion for
expenses (document no. 79) is granted.

Plaintiff is awarded

$2,854 in fees.
SO ORDERED.

__________________________
Joseph A. DiClerico, Jr.
United States District Judge
November 24, 2015
cc:
Jesse C. Ehnert, Esq.
Anna B. Hantz, Esq.
Michele E. Kenney, Esq.
Deborah Ann Notinger, Esq.
William B. Pribis, Esq.
Ross H. Schmierer, Esq.
Nathan P. Warecki, Esq.
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