Synovus Bank v. Karp et al
Filing
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ORDER granting (74) Motion to Compel in case 1:10-cv-00172-MR-DLH. Signed by Magistrate Judge Dennis Howell on 07/29/2013. Associated Cases: 1:10-cv-00172-MR-DLH et al.(thh)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
ASHEVILLE DIVISION
SYNOVUS BANK,
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Plaintiff,
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v.
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JAMES G. KARP, G. DANIEL SIEGEL, )
and THE KARP FAMILY LIMITED
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PARTNERSHIP,
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Defendants.
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SYNOVUS BANK,
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Plaintiff,
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v.
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BARRON S. WALL,
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Defendant.
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NATIONAL BANK OF SOUTH
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CAROLINA,
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Plaintiff,
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v.
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KEVIN J. TRACY,
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Defendant.
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Civil No. 1:10-cv-172
Civil No. 1:10-cv-201
Civil No. 1:10-cv-202
NATIONAL BANK OF SOUTH
CAROLINA,
Plaintiff,
v.
ANTHONY J. BARBIERI,
Defendant.
NATIONAL BANK OF SOUTH
CAROLINA,
Plaintiff,
v.
3GMA REALTY, LLC; and
GERALD M. ABATEMARCO,
Defendants.
SYNOVUS BANK,
Plaintiff,
v.
GREGORY S. KEARY,
Defendant.
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Civil No. 1:10-cv-215
Civil No. 1:10-cv-217
Civil No. 1:10-cv-218
NATIONAL BANK OF SOUTH
CAROLINA,
Plaintiff,
v.
BENJAMIN W. ATKINSON; and
DANIEL S. HINKSON,
Defendants.
NATIONAL BANK OF SOUTH
CAROLINA,
Plaintiff,
v.
KATHERINE H. WILLIAMS,
Defendant.
SYNOVUS BANK,
Plaintiff,
v.
PATRICIA M. TRACY,
Defendant.
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Civil No. 1:10-cv-220
Civil No. 1:10-cv-221
Civil No. 1:10-cv-231
Pending before the Court is the Motion to Compel[# 74].
Plaintiff moves the Court to compel Defendants to produce
documents responsive to two document requests and to provide
complete answers to one interrogatory.
Upon a review of the
record, the parties’ briefs, and the relevant legal authority,
the Court GRANTS the motion [# 74].
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I.
Background
Plaintiff brought these cases seeking repayment for loans it
made in relation to the purchase of undeveloped lots in a real
estate development.
Defendants asserted various counterclaims,
including claims for fraud, fraud in the inducement, and claims
under Chapter 75 of the North Carolina General Statutes.
Plaintiff served Defendants with various discovery requests.
Relevant to this dispute are the following requests:
INTERROGATORY NO. 14: Identify all real property that
you (or any entity that you own or control in whole or
in part) purchased between 2000 and the present. For
each property state the physical address, the date of
purchase, and the names and contact information of any
lending institutions that provided financing for the
purchase transaction.
REQUEST NO. 11: All documents evidencing your legal or
financial interest in any real estate transactions to
which you, or an entity that you owned or controlled
(in whole or in part), were a party between 2000 and
the present, including but not limited to deeds,
purchase contracts, and loan documents.
Request No. 4: All documents exchanged between you and
any other individuals or entities who purchased a lot
at River Rock, including but not limited to emails,
correspondence, contracts, loan documents, or marketing
materials.
In response to Interrogatory No. 14 and Request No. 11,
Defendants offered the general objection that the requests were
not reasonably calculated to lead to the discovery of admissible
evidence.
In response to Request No. 4, Defendants stated that
they would produce the response documents subject to the general
objections, which included the attorney-client privilege,
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attorney work product, and another applicable federal privilege.
Defendants did not, however, provide Plaintiff with a privilege
log, as required by Rule 26(b)(5) of the Federal Rules of Civil
Procedure. Defendants now contend that documents responsive to
Request No. 4 are protected by the common interest privilege.
Subsequently, Plaintiff moved to compel Defendants to respond
fully to Interrogatory No. 14 and produce documents responsive to
Document Requests Nos. 4 and 11.
II.
Legal Standard
Generally speaking, parties are entitled to discovery
regarding any non-privileged matter that is relevant to any claim
or defense.
Fed. R. Civ. P. 26(b)(1).
“Relevant information
need not be admissible at the trial if the discovery appears
reasonably calculated to lead to the discovery of admissible
evidence.”
Id.
Where a party fails to respond to an
interrogatory or a request for production of documents, the party
seeking discovery may move for an order compelling an answer to
the interrogatories or the production of documents responsive to
the request.
Fed. R. Civ. P. 37(a)(3)(B).
“Over the course of
more than four decades, district judges and magistrate judges in
the Fourth Circuit . . . have repeatedly ruled that the party or
person resisting discovery, not the party moving to compel
discovery, bears the burden of persuasion.”
Kinetic Concepts,
Inc. v. ConvaTec Inc., 268 F.R.D. 226, 243 (M.D.N.C. 2010)
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(collecting cases); Mainstreet Collection, Inc. v. Kirkland’s,
Inc., 270 F.R.D 238, 241 (E.D.N.C. 2010); Billips v. Benco Steel,
Inc., No. 5:10cv95, 2011 WL 4005933 (W.D.N.C. Sept. 8, 2011)
(Keesler, Mag. J.).
Moreover, in responding to a party’s interrogatory, the
responding party must answer fully in writing under oath.
R. Civ. P. 33(b)(3).
specificity.
Fed.
Any objections “must be stated with
Any ground not stated in a timely objection is
waived unless the court, for good cause, excuses the failure.”
Fed. R. Civ. P. 33(b)(4).
“Parties must respond truthfully,
fully, and completely to discovery or explain truthfully, fully,
and completely why they cannot respond.”
Mainstreet Collection,
Inc. v. Kirkland’s, Inc., 270 F.R.D. 238, 240 (E.D.N.C. 2010).
Finally, Rule 37 provides that if a court grants a motion to
compel or the discovery is provided after the party files the
motion, the court must require the party whose conduct
necessitated the motion to pay the movant’s reasonable expenses,
including attorneys’ fees, after providing the party an
opportunity to be heard.
Fed. R. Civ. P. 37(a)(5)(A).
The
Court, however, need not award fees under Rule 37 where if finds
that circumstances would make an award of expenses unjust.
III. Analysis
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Id.
A.
Interrogatory No. 11 and Request No. 14
Defendants have asserted a number of counterclaims
against Plaintiff, including fraud and Chapter 75 claims.
Information related to Defendants’ involvement in other real
estate transactions is relevant to these claims.
For example,
evidence of past real estate transactions may be relevant to the
issue of whether the Defendants reasonably relied on any alleged
misrepresentations by Plaintiff.
In response to the Motion to Compel, however, Defendants do
not offer any argument that the information is not relevant.
Instead, Defendants contend that they no longer need to produce
the documents at issue because some of the Defendants testified
as to their past real estate transactions during depositions.
The fact that some of the Defendants may have testified during
their deposition as to some, or even all, of their past real
estate transactions does not alleviate Defendants’ obligation to
produce the documents responsive to the discovery requests at
issue or to fully answer the interrogatories. Because the
information sought in Interrogatory No. 11 and Requests No. 14 is
relevant to the claims asserted by the parties, the Court GRANTS
the motion [# 74] as to these requests and DIRECTS Defendants to
provide Plaintiff with all documents responsive to Request No. 14
and to fully answer Interrogatory No. 11 within ten (10) days of
the entry of this Order.
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B.
Request No. 4.
Defendants contend that the common interest privilege
protects them from having to produce documents responsive to
Request No. 4. The common interest privilege is an extension of
the attorney-client privilege that allows individuals with a
common interest in litigation to communication with each other
and their attorneys without waiving the attorney-client
privilege.
In re Grand Jury Subpoenas 89-3 and 89-4, 902 F.2d
244, 248-49 (4th Cir. 2005); Kirkland’s, Inc., 270 F.R.D. at 242;
Prowess, Inc. v. Raysearch Labs. AB, Civil Case No. WDQ-11-1357,
2013 WL 509021 (D. Md. Feb. 11, 2013). In order for the common
interest privilege to apply, the shared communication or
information must first satisfy the attorney-client privilege or
the work product doctrine.
Kirkland’s, 270 F.R.D. at 243;
Carolina Power & Light Co. v. 3M Co., 278 F.R.D. 156, 161-62
(E.D.N.C. 2011); Prowess, Inc. v. Raysearch Labs. AB, Civil No.
WDQ-11-1357, 2013 WL 1976077 (D. Md. May 9, 2013);
Glynn v. EDO
Corp., Civil No. JFM-07-01660, 2010 WL 3294347 (D. Md. Aug. 20,
2010).
In addition, the party asserting the common interest
privilege must also demonstrate that: “’(1)the communicating
parties shared an identical legal interest, (2) the communication
was made in the course of and in furtherance of the joint legal
effort, and (3) the privilege had not been waived.’”
Kirkland’s,
279 F.R.D. at 243 (quoting, Glynn, 2010 WL 3294347)). “A party
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cannot establish a common interest by relying ‘soley on counsel’s
conclusory allegation that the communications were privileged
based on the common interest in the litigation.’” Prowess, 2013
WL 509021 (quoting, Byrnes v. Jetnet Corp., 111 F.R.D. 68, 72
(M.D.N.C. 1986)).
The cursory response by Defendants to the Motion to Compel
fails to demonstrate that the common interest privilege applies
to any of the documents or communications at issue.
As a
threshold matter, Defendants have failed to demonstrate that the
communications and documents at issue are subject to either the
attorney-client privilege or the attorney work product.
In fact,
it seems entirely implausible that all the documents at issue are
protected by either of these privileges.
Moreover, Defendants
failed to provide Plaintiff with a privilege log as required by
the Federal Rules of Civil Procedure.
See Fed. R. Civ. P.
26(b)(5)(A); Neighbors Law Firm, P.C. v. Highland Cap. Mgmt.,
L.P., No. 5:09-CV-352-F, 2011 WL 761480 (E.D.N.C. Feb. 24, 2011).
Finally, even assuming that the documents and communications were
covered by either the attorney-client privilege or the attorney
work product doctrine and Defendants had provided Plaintiff with
a privilege log that complied with the requirements of the
Federal Rules of Civil Procedure, Defendants have failed to
demonstrate the common interest privilege applies. Accordingly,
the Court GRANTS the Motion to
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Compel [# 74] and DIRECTS Defendants to produce all documents
responsive to Request No. 4 that are not subject to the attorneyclient privilege or the attorney work product doctrine within ten
(10) days of the entry of this Order.
Finally, Defendants shall produce a privilege log that
complies with the requirements of the Federal Rules within ten
(10) days of the entry of this Order. The privilege log must list
every responsive document that was withheld from production based
on the assertion of the attorney-client privilege or the work
product doctrine.
The Court will deem Defendants to have waived
the applicable privilege to any document not included on the
privilege log.
Plaintiff may file a motion challenging the
inclusion of any of the documents on the privilege log within ten
(10) days of receipt of the log from Defendants, and the Court
will conduct an in camera review of the documents and determine
whether the privilege applies to the document at issue.
The
Court INSTRUCTS Defendants that it will sanction Defendants
and/or counsel for Defendants $500.00 for each document that the
Court finds to have been included on the privilege log without a
reasonable basis for believing that the document was protected by
either the attorney-client privilege or the attorney work product
doctrine.
C.
FEES
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Pursuant to Rule 37, the Court AWARDS Plaintiff its
reasonable costs, including attorneys’ fees in bringing this
motion. The Court finds that Defendants offered largely
conclusory, undeveloped arguments in response to the Motion to
Compel, and unreasonably withheld discovery responses.
Upon a
review of the record and the parties’ briefs, an award of fees in
justified in this case.
The Court DIRECTS Plaintiff to file an
affidavit and supporting documents setting forth their attorneys’
fees with ten (10) days of the entry of this Order.
Defendants
shall have five (5) days to object to the amount of the fees.
This award shall be paid by counsel for Defendants.
IV.
Conclusion
The Court GRANTS the Motion to Compel [# 74].
Signed: July 29, 2013
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