Sand Storage, LLC v. Trican Well Service, L.P. et al
Filing
190
ORDER GRANTING IN PART PLAINTIFF'S MOTION TO COMPEL DEPOSITION OF DEFENDANTS' IN-HOUSE COUNSEL FORREST GORDON granting in part 180 Motion for Discovery. The deposition shall be taken on or before April 17, 2015.(Signed by Magistrate Judge Jason B. Libby) Parties notified.(mserpa, 2)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
CORPUS CHRISTI DIVISION
SAND STORAGE, LLC,
Plaintiff,
VS.
TRICAN WELL SERVICE, L.P., et al,
Defendants.
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CIVIL ACTION NO. 2:13-CV-303
ORDER GRANTING IN PART PLAINTIFF’S MOTION TO COMPEL
DEPOSITION OF DEFENDANTS’ IN-HOUSE COUNSEL FORREST GORDON
Pending is Plaintiff Sand Storage’s motion to take the deposition of Defendant
Trican’s in-house counsel, Forrest Gordon. (D.E. 180). Having considered the motion,
response, respective exhibits, the applicable law, arguments of counsel and for the
reasons set forth below in more detail, the motion is GRANTED in part.
The
undersigned orders the taking of Trican’s in-house counsel, Forrest Gordon, on or before
April 17, 2015 with the limitations set forth below.
I.
BACKGROUND
This case was referred to the undersigned Magistrate Judge pursuant to 28 U.S.C.
§ 636 for case management, including making recommendations as to all dispositive
motions. (D.E. 62). The factual and procedural history of this case will not be recited in
detail as the undersigned Magistrate Judge is familiar with the case having been involved
with resolving and ruling on numerous pretrial motions, discovery disputes and
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dispositive motions which are among the 187 docket entries in this non-complex
relatively straight forward contract dispute. However, a short summary is appropriate.
This lawsuit arises out of a contractual dispute between Plaintiff/CounterDefendant Sand Storage, LLC (“Sand Storage”) and Defendant/Counter-Plaintiffs Trican
Well Service, L.P. and Trilib Management, LLC (collectively “Trican”). On August 29,
2011, Sand Storage and Trican Well Service LP through its managing partner, Trilib
Management, LLC entered in a written contract for Sand Storage to store sand for Trican.
(D.E. 180-2). On August 2, 2013, Trican provided Sand Storage with formal notice of its
failure to perform its obligations under the Agreement. (D.E. 180-3). Sand Storage
refers to this letter as the “Gordon Notice Letter” because Forrest D. Gordon is the author
of the letter. Mr. Gordon is an in-house counsel for Defendant Trican Well Service L.P.
with the title of Senior Legal Counsel. (D.E. 187-12). Sand Storage seeks to depose Mr.
Gordon because he is the author of this document which is important to the litigation.
Sand Storage also maintains the letter contains false and disputed information. (D.E.
180). Trican objects to Sand Storage taking the deposition of Mr. Gordon because to do
so would violate the attorney-client privilege. (D.E. 187).
Of importance to Sand Storage is Trican had previously agreed to the deposition
of another Trican in-house counsel, Mehgan Merman (now Mehgan Wichuk). This
agreement is not controlling to the issue currently before the Court, but it is part of the
analysis. The parties have disputed whether Trican’s in-house counsel were acting as
decision makers or alternatively were rendering legal advice and services to Trican. The
taking of the deposition of Ms. Wichuk was to resolve the issue of whether the Trican in2/9
house counsel or other Trican employees were the decision makers with regard to the
Gordon Notice Letter and Sand Storage’s performance of the contract.
Current defense counsel entered the case on July 1, 2014, almost a year into the
litigation and substituting for Trican’s prior defense counsel.
(D.E. 69, 71).
The
litigation had been acrimonious with the parties having filed approximately 20 pretrial
motions by July 16, 2014. Prior to a hearing on July 16, 2014, the undersigned had a
short conference in chambers with counsel for both sides to discuss briefly the state of the
litigation and what matters required ruling from the Court. It appeared the parties had
turned over a new leaf and were working together to proceed in the litigation in a less
contentious manner.1
In a written order dated July 16, 2014, the undersigned summarized the rulings
made on the record. (D.E. 87). The order included the parties’ agreement regarding
Sand Storage taking the deposition of Trican in-house counsel Mehgan Wichuk and the
Court’s ruling denying without prejudice Sand Storage’s previous motion to depose
Trican in-house counsel Forrest Gordon. The order states, in relevant parts, as follows:
6.
The parties have agreed on taking the deposition of
Defendants’ in-house counsel Megham Merman Wichuk with
the following agreed stipulations. The deposition will be
limited to two hours. Plaintiff’s counsel will not intentionally
solicit information that is privileged. To the extent the witness
testifies to matters covered by attorney-client, work-product
or other privilege, Defendants do not waive or forfeit their
right to assert those privileges at trial or otherwise.
1
No decisions were made in chambers and the parties were given full opportunity to present matters to the Court on
the record.
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7.
Plaintiff’s motion to compel the deposition of
Defendants’ other in-house counsel, Forrest Gordon, (D.E.
60) is DENIED without prejudice. The Court believes that
any discoverable, non-privileged, information Mr. Gordon
may have is limited and is not crucial to Plaintiff. Further, the
information can be discovered through other means including,
but not limited to, the deposition of Ms. Wichuk. Mr. Gordon
is, for lack of a better description, lower in the chain of
command to Ms. Wichuk in the in-house legal department.
Finally, Mr. Gordon’s role in matters relevant to this dispute
were secondary to Ms. Wichuk. See Nguyen v. Excel Corp.,
197 F.3d 200 (5th Cir. 1999).
(D.E. 87).
The undersigned previously denied Sand Storage’s motion to depose Forrest
Gordon in part because Trican made Ms. Wichuk available for deposition. Trican
reserved its rights to assert privilege claims at trial. The undersigned never reached the
issue of privilege regarding Mr. Gordon or whether to compel the taking of his
deposition. Ms. Wichuk was unavailable for an extended period of time due to medical
issues, caring for a newborn and scheduling problems. On February 19, 2015, the parties
were able to take Ms. Wichuk’s deposition pursuant to their previous agreement. (D.E.
180, p. 1). In the pending motion, Sand Storage complains Ms. Wichuk was “completely
unknowledgeable, identifying Forrest Gordon as the person with knowledge who should
be questioned.” (D.E. 180, p. 1).
Trican’s response includes a declaration of Forrest Gordon (D.E. 187-12) setting
forth his role in the Gordon Notice Letter. In summary, Mr. Gordon maintains his
responsibilities consist solely of advising Trican on legal issues, that he intended on his
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consultation with Trican employees regarding the subject matter of this lawsuit to be
confidential, that he has not disclosed confidential communications to third parties, that
he was not a decision maker regarding the Sand Storage contract and that he is actively
involved as a member of Trican’s legal team in defending this action. (D.E. 187-12).
Mr. Gordon’s declaration states that he was not a decision maker for Trican with
regard to the Sand Storage contract. However, the issue of who was the decision maker
for the Sand Storage contract and from whom the information came has not been resolved
with clarity. During the hearing, counsel for Sand Storage maintained witnesses in the
discovery process have been giving counsel the “run around” regarding who had decision
making authority for relevant issues. Counsel for Trican maintained no one was being
given the run around, but rather, relevant decisions were not made by a single person.
Regardless, Mr. Gordon as the author of the notice letter, is in the best position to provide
discovery of the source of the information in the letter and Sand Storage has no other way
to obtain that information because no one else appears to know.
II.
ANALYSIS
In diversity actions, federal courts apply the law of the forum state to resolve
claims of attorney-client privilege. Fed. R. Civ. P. Evid. 501; Dunn v. State Farm Fire &
Cas. Co., 927 F.2d 869, 875 (5th Cir. 1991); In re Avantel, S.A., 343 F.3d 311, 318 n. 6
(5th Cir. 2003). The parties agree the law of Texas is applicable. Texas Rule of
Evidence 503 prevents discovery of the confidential communications between the client
and his attorney. The privilege protects the complete communication between the
attorney and his client, including legal advice and factual information. Marathon Oil Co.
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v. Moye, 893 S.W.2d 585, 589 (Tex. App.--Dallas 1994). The communication must be
confidential and between qualified persons (the attorney, the client, and their
representatives), and for the purpose of assisting in the provision of legal services. Tex.
R. Evid. 503(b). No presumption of privilege exists under Texas law; the party asserting
the privilege must demonstrate its application. In re E.I. DuPont de Nemours & Co., 136
S.W.3d 218, 225 n. 3 (Tex. 2004).
The Fifth Circuit has found that “depositions of opposing counsel are disfavored
generally” and “should be permitted in only limited circumstances.” Nguyen v. Excel
Corp., 197 F.3d 200, 209 (5th Cir. 1999). In Nguyen, the Fifth Circuit applied the threepart test established by the Eighth Circuit in Shelton v. American Motors Corp., 805 F.2d
1323, 1327 (8th Cir. 1986), to determine when opposing counsel should be permitted to
be deposed in a case. Pursuant to the Shelton analysis, the party seeking to take the
deposition must show that (1) no other means exist to obtain the information than to
depose the opposing counsel; (2) the information sought is relevant and non-privileged;
and (3) the information is crucial to the preparation of the case. Nguyen,197 F.3d at 209
(citing Shelton, 805 F.2d at 1327).
Applying the Shelton analysis to the present case, the deposition of Mr. Gordon on
limited issues is warranted. First, Sand Storage has established no other means exists to
obtain the information regarding the source of the information contained in the Gordon
Notice Letter and whether Mr. Gordon was acting as decision maker in regard to the Sand
Storage contract. There are relevant facts in the letter, the origin of which Sand Storage
has been unable to determine. As the author of the letter and after extensive discovery,
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Mr. Gordon appears to be the only person with knowledge of the source of the relevant
facts contained in the letter and whether he or another Trican employee was the decision
maker. The source of the information and the identity of the decision maker are factual
issues and are not privileged. The confidential communications Mr. Gordon had with
Trican employees as a lawyer for Trican appear to be privileged and the Court is not
allowing the interrogation of Mr. Gordon on the substance of those communications. The
Court does not find the attorney client privilege to these matters to have been waived.
Finally, the information is crucial to Sand Storage. The current state of this matter is that
Sand Storage has been unable to verify the source of information contained in a crucial
piece of evidence. The Gordon Notice Letter sets forth various facts from Trican’s
perspective regarding Sand Storage’s alleged deficient performance.
disputes these factual assertions and maintains some are false.
Sand Storage
The source of the
information contained in the Gordon Notice Letter is crucial to Sand Storage’s efforts to
challenge or contest the facts set forth in the letter.
Finally, of importance is Trican’s prior agreement to allow the deposition of
Trican in-house counsel Mehgan Wichuk with certain limitations agreed to by Sand
Storage. (D.E. 87).
The understanding of the parties was that Ms. Wichuk was the in-
house counsel most familiar with the case and she would be in position to provide
discovery of certain non-privileged matters.
However, after her deposition, it appears
Mr. Gordon was the Trican in-house counsel most familiar with relevant facts. The Court
is cognizant that Trican’s making Ms. Wichuk available for deposition was a concession
in an attempt to pursue a less contentious course of litigation. Further, this concession
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was for a deposition limited in scope and duration and Trican reserved its rights to raise
matters of privilege. (D.E. 87). The deposition of Ms. Wichuk did not serve the intended
purpose and the undersigned believes ordering the deposition of Mr. Gordon with similar
stipulations is appropriate.
Therefore, the Court ORDERS the Deposition of Mr. Gordon will be taken with
the following conditions and limitations:
1. The deposition shall be taken on or before April 17, 2015.
2. The deposition shall be limited to two hours.
3. Sand Storage’s counsel will not intentionally solicit information that is
privileged.
4. The scope of this deposition is limited to inquiry about the source of the factual
information contained in the Gordon Notice Letter and who the decision
makers were with regard to the letter and Sand Storage contract. Counsel may
not inquire about the substance of communications with Trican employees.
5. Trican does not waive their privilege claims by submitting to this deposition.
The inadvertent disclosure of privileged information does not waive or forfeit
Trican’s rights to assert those privileges at trial.
6. This order concerns discovery and does not address the admissibility of
evidence or the availability of Mr. Gordon to testify at trial.
7. Counsel will notify the undersigned’s case manager of the deposition date and
time of the deposition. The undersigned will be available to address objections
or other matters.
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This order does not address Sand Storage’s motion regarding Trican’s privilege
log. Trican has updated its privilege log which has likely resolved many of the issues
raised in Sand Storage’s motion. Therefore, the parties are ordered to confer on whether
contested issues remain on or before April 7, 2015. If contested matters have not been
resolved regarding the privilege log, counsel will file its motion on or before April 10,
2015 with the response due on or before April 15, 2015.
ORDERED this 2nd day of April, 2015.
___________________________________
Jason B. Libby
United States Magistrate Judge
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