Wellin v. Wellin et al
Filing
343
ORDER granting in part and denying in part 234 Motion to Compel; granting in part and denying in part 250 Motion to Quash; granting in part and denying in part 276 Motion for Protective Order; granting in part and den ying in part 277 Motion to Quash; finding as moot 310 Report and Recommendation.; modifying and adopting as modified Report and Recommendations re 320 Report and Recommendation. Signed by Honorable David C Norton on 9-30-2015.(rweh, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
CHARLESTON DIVISION
WENDY WELLIN, as the Special
Administrator of the Estate of Keith S. Wellin
and as Trustee of the Keith S. Wellin Florida
Revocable Living Trust u/a/d December 11,
2001,
Plaintiff,
vs.
PETER J. WELLIN, et. al.,
Defendants.
LARRY S. McDEVITT, as Trustee of the
Wellin Family 2009 Irrevocable Trust,
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Plaintiff,
vs.
PETER J. WELLIN, et. al.,
Defendants.
PETER J. WELLIN, et. al.,
Plaintiffs,
vs.
WENDY WELLIN, individually and as Trustee
of the Keith S. Wellin Florida Revocable Living
Trust u/a/d December 11, 2011,
Defendant.
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No. 2:13-cv-1831-DCN
No. 2:13-cv-3595-DCN
No. 2:13-cv-4067-DCN
ORDER
These matters are before the court on an Amended Report and
Recommendation (“R&R”) by Special Master William L. Howard regarding the
following non-dispositive discovery motions (“the Motions”) in Wellin v. Wellin, et.
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al. (“Wellin I”), No. 2:13-cv-01831-DCN and McDevitt v. Wellin, et. al.
(“McDevitt”), No. 2:13-cv-03595-DCN:
1. Plaintiff McDevitt’s motion to compel discovery, deem matters addressed by
requests for admissions to be admitted, and determine the sufficiency of
answers to requests for admissions, filed May 7, 2014 in McDevitt, ECF No.
83 (“McDevitt Motion to Compel I”);
2. Plaintiff McDevitt’s motion to compel, filed November 7, 2014 in McDevitt,
ECF No. 183 (“McDevitt Motion to Compel II”);
3. Plaintiff Wendy Wellin’s motion to compel discovery, filed November 26,
2014 in Wellin I, ECF No. 234 (“Wendy Motion to Compel”);
4. Interested Party Wendy Wellin’s motion to quash subpoenas, or, in the
alternative for a protective order, filed December 15, 2014 in Wellin I, ECF
No. 250 and McDevitt, ECF No. 223 (“Wendy Motion for Protective Order
I”);
5. Peter J. Wellin, Cynthia Wellin Plum, Marjorie Wellin King, and Friendship
Management LLC’s (“the Wellin Children”) motion for a protective order,
filed March 12, 2015 in Wellin I, ECF No. 276 (“Wellin Children’s Motion
for Protective Order”); and
6. Wendy Wellin’s motion to quash subpoenas, or, in the alternative for a
protective order, filed March 19, 2015 in Wellin I, ECF No. 277 (“Wendy
Motion for Protective Order II”).
The Wellin Children and Wendy Wellin (“Wendy”) filed objections to the
R&R. For the reasons that follow, the court adopts the R&R with modifications, and
grants in part and denies in part the above-listed motions in accordance with the
recommendations of the R&R, except that the relevant time period allowed for
discovery of Keith Wellin’s (“Keith”), Keith’s estate’s, and the Revocable Trust’s
financial records shall be extended from December 31, 2013 until trial.
I. BACKGROUND
Because the parties are well-acquainted with these cases, the court will
dispense with a recitation of the facts and include only a procedural history of the
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matters at hand. Wellin I, McDevitt, and Wellin, et. al. v. Wellin (“Wellin II”), No.
2:13-cv-4067-DCN have been consolidated for the purposes of pretrial discovery.
Wellin I, ECF No. 271. On February 17, 2015, this court appointed William L.
Howard to serve as special master over all non-dispositive, pre-trial matters and
motions in these cases, including those pending before this court at the time. Wellin
I, ECF No. 270. The special master heard the Motions on April 21, 2015 and issued
the present R&R, recommending that the court grant the Motions in part and deny the
Motions in part, on July 31, 2015. R&R at 65–69.
On August 4, 2015, the Wellin Children filed an objection to the R&R
(“Wellin Children Objection”), arguing that they should be able to discover the
financial records of Keith, his estate, and the Keith S. Wellin Florida Revocable
Living Trust (the “Revocable Trust”) from December 31, 2013 until trial. The same
day, Wendy filed an objection to the R&R (“Wendy Objection”) asking the court to
permit redaction of the specific vendors’ names and locations listed in the financial
records that the Wellin Children subpoenaed from American Express. On August 25,
2015, the Wellin Children filed a reply to Wendy’s objection (“Wellin Children
Reply”), and Wendy filed two replies to the Wellin Children’s objection, one in her
capacity as plaintiff in Wellin I (“Plaintiff Wendy Reply”), and another in her
capacity as an interested party (“Interested Party Wendy Reply”).
II. STANDARDS
In reviewing a special master’s order, report, or recommendation, the court
may “adopt or affirm, modify, wholly or partly reject or reverse, or resubmit to the
master with instructions.” Fed. R. Civ. P. 53(f)(1). The court is required to review all
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objections to any findings of fact or conclusions of law made or recommended by a
special master de novo. Fed. R. Civ. P. 53(f)(3), (4); Wellin I, ECF No. 270.
However, the special master’s rulings on procedural matters will only be set aside for
abuse of discretion. Fed. R. Civ. P. 53(f)(5); Wellin I, ECF No. 270, 6.
The Federal Rules of Civil Procedure provide that a party may “obtain
discovery regarding any non-privileged matter that is relevant to any party’s claim or
defense, including the existence, description, nature, custody, condition and location
of any books, documents or other tangible things and the identity and location of
persons who know of any discoverable matters.” Fed. R. Civ. P. 26(b)(1). “Relevant
information need not be admissible at trial if the discovery appears reasonably
calculated to lead to the discovery of admissible evidence.” Id.
“The court may, for good cause, issue an order to protect a party or person
from annoyance, embarrassment, oppression, or undue burden or expense” by
forbidding or limiting the scope of discovery. Fed. R. Civ. P. 26(c)(1). “The scope
and conduct of discovery are within the sound discretion of the district court.”
Columbus-Am. Discovery Grp. v. Atl. Mut. Ins. Co., 56 F.3d 556, 568 n.16 (4th Cir.
1995) (citing Erdmann v. Preferred Research, Inc. of Ga., 852 F.2d 788, 792 (4th Cir.
1988)); see also U.S. ex rel. Becker v. Westinghouse Savannah River Co., 305 F.3d
284, 290 (4th Cir. 2002) (stating that district courts are afforded
“substantial discretion . . . in managing discovery”).
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III. DISCUSSION
A. Wellin Children’s Objection to the R&R
The Wellin Children argue that the R&R improperly restricts the period of
time for which the Wellin Children may discover Keith’s, his estate’s, and his
Revocable Trust’s financial records. Whereas the R&R allowed the parties to
discover each other’s respective financial records from January 1, 2009 until
December 31, 2013, R&R at 56, the Wellin Children contend that Keith’s financial
records—specifically, Keith’s credit card records—from January 1, 2014 until
Keith’s death on September 14, 2014 are also relevant to the following issues:
(i) Wendy’s influence on and control over Keith’s spending; (ii) whether Keith’s
financial condition was actually threatened; and if so, (iii) whether the Wellin
Children caused such threat. Wellin Children Objection, 3. The Wellin Children also
argue that the financial records showing the distributions and expenditures of Keith’s
estate and the Revocable Trust during the period following Keith’s death on
September 14, 2014 are relevant to determine damages in Wellin II, as it may be
necessary to demonstrate what the Wellin Children’s inheritance would have been
“but for” Wendy’s tortious action. Id. at 11.
Wendy’s replies do not contest the Wellin Children’s argument regarding the
financial records for the period from January 1, 2014 to Keith’s death. Interested
Party Wendy Reply, 4 (“[Wendy]” has no objection to [the] deadline [for financial
discovery] being moved to the date of Keith’s death.”). Therefore, the court will
modify the R&R to allow for the discovery of Keith’s financial records from January
1, 2014 until September 14, 2014. However, Wendy does dispute the Wellin
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Children’s contention that the financial records of Keith’s estate and the Revocable
Trust following Keith’s death are discoverable. Id. at 3–5; Plaintiff Wendy Reply, 3.
Wendy’s primary argument, set forth in both of her replies, is that the discoverability
of distributions from Keith’s estate and the Revocable Trust is not properly before the
court because that issue was not addressed in the motions or the R&R. Interested
Party Wendy Reply, 3–5; Plaintiff Wendy Reply, 3.
A review of the underlying motions, however, reveals that the issue is
properly before the court. Wendy’s Motions for Protective Order I and II were filed
in response to various subpoenas duces tecum, seeking financial and related
documents for the preceding five or ten years from banking institutions where Keith
and Wendy held accounts. Wendy Motion for Protective Order I, 3; Wendy Motion
for Protective Order II, 4. These subpoenas, all of which were issued after Keith’s
death, did not indicate that the relevant five or ten year period was to be measured
from Keith’s death. Rather, a fair reading of the subpoenas indicates that the five or
ten year period should be measured from the date of the subpoeana. See, e.g., Motion
for Protective Order II, Ex. 2 (subpoena to American Express, dated February 9,
2015, requesting “[a]ll documents and correspondence . . . over the past five years”).
Thus, both motions were directed at subpoenas seeking to discover financial records
after Keith’s death. Wendy’s Motion for Protective Order II clearly recognized this
fact, arguing that “the [c]ourt should limit discovery of financial information to the
years 2009 through [Keith’s] death on September 14, 2014.” Wendy Motion for
Protective Order II, 6.
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As to the Revocable Trust, the same subpoena to American Express explicitly
sought information pertaining to accounts held “in the name of, for the benefit of, or
under the control of . . . the Revocable Trust.” Wendy Motion for Protective Order II,
Ex. 2. Wendy even argued that the subpoena was overbroad, in part, because it
requested account information pertaining to the Revocable Trust. Wendy Motion for
Protective Order II, 4. Therefore, to the extent Wendy’s motions sought to protect
financial records from the period following Keith’s death, regarding accounts held in
Keith’s name and by the Revocable Trust, those motions necessarily implicated the
discoverability of distributions from Keith’s estate or the Revocable Trust during that
period.
Wendy does not directly dispute the Wellin Children’s rationale that financial
records of Keith’s estate and the Revocable Trust may be relevant in determining the
appropriate damages, but instead contends that this rationale only applies to the
Wellin Children’s cause of action for intentional interference with inheritance, which
has not been recognized in South Carolina. Interested Party Wendy Reply, 4. This
argument is unavailing. This information might also be relevant to the damages
under the Wellin Children’s claim for breach of contract, which alleges that “as a
direct and proximate result of Wendy’s breaches of [the prenuptial agreement],
Wendy was able to exercise undue influence and coercion over Keith . . . reducing or
eliminating the children’s inheritance, [and] transferring assets to Wendy that he
otherwise would have bequeathed to the children.” Compl. ¶ 152. The same could
be said for the Wellin Children’s claim for constructive trust, which alleges that
“Wendy obtained significant assets through . . . testamentary bequests that she would
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not have received—and that would have been conveyed to the [Wellin Children]—
but for her course of improper conduct.” Id. at ¶ 168.
In the alternative, Wendy suggests that the estate’s accounting that will be
used in the probate court should provide sufficient information for the Wellin
Children’s damage calculations. Interested Party Wendy Reply, 4. Though Wendy
cites no authority for why this alternative should prevent the Wellin Children from
obtaining the records in question, the court notes that it must limit the extent of
discovery if it determines that “the discovery sought is unreasonably cumulative or
duplicative, or can be obtained from some other source that is more convenient, less
burdensome, or less expensive.” Fed. R. Civ. P. 26(b)(2)(C)(i). Wendy has offered
nothing beyond this bare assertion to indicate why the probate court’s accounting
would be a suitable alternative. Nor is it clear that waiting for the probate
proceedings to conclude is a more convenient or less burdensome means of obtaining
such information. Because Wendy has not provided sufficient information to make
the requisite determinations to limit discovery under Fed. R. Civ. P. 26(b)(2)(C)(i),
the court finds that financial records for Keith’s accounts and the Revocable Trust
from the period following Keith’s death through trial are discoverable.
B. Wendy’s Objection to the R&R
Wendy, in her capacity as an interested party, argues that the R&R should
allow for the redaction of specific vendor information from the American Express
credit card records subpoenaed by the Wellin Children. Wendy Objection, 2, 4, and
6. In Wendy’s Motion for Protective Order II, Wendy argues that, even if the general
types and amounts of her spending were relevant, the names of vendors,
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corresponding amounts, and other transaction details are not relevant, and the court
should therefore limit the subpoenas to prevent discovery of such irrelevant
information. Motion for Protective Order II, 7. The special master’s R&R denied
this request, finding that it would be overly burdensome to require third-party
institutions to execute the redactions, and that the nature, date, and general location of
the individual expenditures were relevant. R&R at 63. The special master did
recommend a consent order, whereby the subpoenaed party would send the records to
Wendy, who would redact the specific vendor information prior to production, but
still provide complete information regarding the nature, date, and general location of
each expenditure. Id. at 64. The Wellin Children did not accept this proposal, and
Wendy now contends that the court should impose such an arrangement on the
parties. Wendy Objection, P. 5–6. Again, Wendy argues that the specific vendor
information is irrelevant, and under the proposed redaction procedure, the process is
not overly burdensome since Wendy will bear the costs of redaction herself.1 Id.
The Wellin Children argue that the specific information Wendy wishes to
redact is relevant, and even if it were not, relevance-based redactions are nevertheless
improper. Wellin Children Reply, 2. The Wellin Children offer a number of
hypothetical scenarios to illustrate the ways in which the specific details of Wendy’s
spending might be relevant. Id. at 6–7. The basic theme of these hypotheticals
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Wendy also argues that the Wellin Children’s discovery practices are abusive and exceed the
limitations contemplated by Rule 26 and 45. Wendy Objection, 6 n.3. Though Wendy goes on to
describe why these practices are abusive, she does not clearly argue that the subpoenas are unduly
burdensome under Fed. R. Civ. P. 26(c) purely due to abusive intent, rather than overbreadth. To the
extent this is part of Wendy’s argument, the court does not find that good cause exists to protect
Wendy from the Wellin Children’s subpoenas on this theory. The court notes that the Wellin
Children’s response offers reasonable justifications for their subpoenas to Wendy’s associates, see
Wellin Children Reply, 8 n.3, and undermines Wendy’s claim that the very fact that these associates
were subpoenaed “demonstrate[s] clearly that the Wellin Children desire to hound and harass [Wendy
and her associates].” Wendy Objection, 6 n.3.
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appears to be that the details of Wendy’s spending are reasonably likely to illuminate
the extent to which Wendy spent money for her own benefit, or possibly her friends’
and relatives’ benefit, as opposed to Keith’s benefit (i.e. on items for Keith, on
dinners with Keith, etc.).2 Id. The Wellin Children contend that these facts bear
upon: (i) their defense in Wellin I—that Wendy was the true cause of any financial
peril Keith may have faced; (ii) their claims in Wellin II—that Wendy intentionally
interfered with the their inheritance, that Wendy breached provisions of the prenuptial
agreement prohibiting her control over Keith’s “separate property,” and that Wendy
breached her fiduciary duty to Keith as his power of attorney; and (iii) Wendy’s
potential defense that she acted as Keith’s constant caretaker.3
The court finds these arguments persuasive. The Wellin Children have
articulated the type of information they expect to find by obtaining the American
Express records in their unredacted form. These expectations are consistent with
their theory of the case, and there appears to be a reasonable possibility that finding
such information—or the absence of such information—would produce admissible
evidence with respect to the Wellin Children’s claims. Even if the specific locations
where Wendy shops and eats did not directly show the extent which Wendy used the
American Express account for her own benefit, the court agrees that this information
would allow the Wellin Children to more effectively investigate the nature of
Wendy’s spending.4
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The Wellin Children also argue that the information may lead to discovery of when Wendy
dined with certain doctors who have been identified as witnesses regarding Keith’s capacity and with
whom she was close friends. Wellin Children Reply, 7.
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Though not specified, it seems that this potential defense may be applicable to the Wellin
Children’s undue influence claims in Wellin II.
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Wendy’s objection to the R&R does not specifically request that the court prohibit the Wellin
Children from asking about the specifics of her expenditures or discovering the information in some
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Even if the court determined that the specific information Wendy wishes to
redact was, itself, irrelevant, there would still be reason not to allow the proposed
redactions. Courts have recognized that relevance-based redactions are disfavored,
because they “breed suspicions, and they may deprive the reader of context.” In re
State St. Bank & Trust Co. Fixed Income Funds Inv. Litig., 2009 WL 1026013, at *1
(S.D.N.Y. Apr. 8, 2009) (quoted in Wellin I, ECF No. 175 at 5–6); see also In re MI
Windows & Doors, Inc. Products Liab. Litig., No. 2:12-MN-00001, 2013 WL
268206, at *3 (D.S.C. Jan. 24, 2013) (“The redaction of irrelevant information, even
when sparingly done, deprives plaintiffs of context for the relevant information.”);
David v. Alphin, 2010 WL 1404722, at *7 (W.D.N.C. Mar. 30, 2010) (“[A] party
should not take it upon him, her or itself to decide unilaterally what context is
necessary for the non-redacted part disclosed, and what might be useless to the
case.”) (quoted in Wellin I, ECF No. 175 at 5–6). Redactions are especially
discouraged in cases where, as here, a confidentiality order exists that renders the
redactions unnecessary. See In re MI Windows, 2013 WL 268206, at *3 (“[T]he
concerns upon which [defendant] bases its need to redact are alleviated by the
confidentiality order that is already in place, which ‘prevents non-litigants from
viewing sensitive information.’”); Alphin, 2010 WL 1404722, at *7 (“[P]rotective
orders are available to shield irrelevant, but important-to-keep-confidential
information, and unless the protective order permits partial production, a document
should be produced in its entirety.” (quoting Evon v. Law Offices of Sidney Mickell,
2010 WL 455476, at *2 n.1 (E.D. Cal. Feb. 3, 2010))); In re State St. Bank & Trust,
other way. However, if the court allows for the redaction, while still permitting the Wellin Children to
seek the information in subsequent discovery, the redactions would only serve to delay and hinder such
discovery.
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2009 WL 1026013, at *1 (“In the case at bar, the stipulated protective order makes it
unnecessary to redact any portion of a document on the ground that the portion is
non-responsive and irrelevant.”).
The court recognizes that Wendy has not made the same type of unilateral
redactions faced earlier in this litigation, when redactions were made without even
seeking court approval. Wellin I, ECF No. 175 at 5–6. Nevertheless, the arguments
against unilateral redaction have some force in this case, where it appears the redacted
information could provide valuable context—even assuming it was not, itself,
relevant. Moreover, redaction should be unnecessary in this case, as the August 1,
2014 confidentiality order allows parties to designate documents containing
“sensitive personal information” as confidential.5 Wellin I, ECF No. 185.
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The confidentiality order requires that documents be designated as confidential “prior to, or
contemporaneously with, the production or disclosure of the documents.” Wellin I, ECF No. 185 at 2.
As applied to the American Express records in question, this poses a problem for Wendy, who does not
control the timing of American Express’s disclosure of the documents. Under the circumstances, the
court finds it appropriate to require the Wellin Children to treat the documents produced in response to
the American Express subpoena as having been duly designated as confidential pursuant to the August
1, 2014 confidentiality order, unless and until, Wendy shall have notified the Wellin Children that they
need not treat such documents as confidential and no other party has designated such documents as
confidential.
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IV. CONCLUSION
For the foregoing reasons, the court MODIFIES the R&R to extend the
period for which Keith’s financial records are discoverable from January 1, 2014 until
September 14, 2014, and the period for which Keith’s estate’s and the Revocable
Trust’s financial records are discoverable from December 31, 2013 until trial, and
ADOPTS the R&R, as modified.
AND IT IS SO ORDERED.
DAVID C. NORTON
UNITED STATES DISTRICT JUDGE
September 30, 2015
Charleston, South Carolina
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