Adkins et al v. CMH Homes Inc. et al
Filing
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MEMORANDUM OPINION AND ORDER granting Plaintiff's 41 MOTION to Quash the subpoena issued to Radiology, Inc., and denying Plaintiff's 41 MOTION to quash and 59 MOTION for a protective order regarding the subpoenas seeking communications with debt collection companies; denying Plaintiffs' motion to quash the remaining subpoenas, as moot. Signed by Magistrate Judge Cheryl A. Eifert on 9/10/2014. (cc: attys; any unrepresented party) (mkw)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA
HUNTINGTON DIVISION
WILLIAM HOWARD ADKINS
and MARRIAN A. ADKINS,
Plaintiff,
v.
Case No.: 3:13-cv-32123
CMH HOMES INC. d/b/a FREEDOM
HOMES; VANDERBILT MORTGAGE
AND FINANCE, INC.; and JOHN DOE
HOLDER,
Defendants.
MEMORANDUM OPINION AND ORDER
Pending before the Court is Plaintiffs’ Motion to Quash Subpoenas. (ECF No. 41).
Defendants have filed a response in opposition to the motion, (ECF No. 45), and
Plaintiffs have filed a reply in support of their motion to quash, or in the alternative, a
motion for protective order. (ECF No. 59). For the reasons that follow, the Court
GRANTS Plaintiffs’ motion to quash the subpoena issued to Radiology, Inc., (ECF No.
41). However, in regard to the subpoenas seeking communications with debt collection
agencies, the Court DENIES Plaintiffs’ motion to quash, and likewise DENIES
Plaintiffs’ motion for a protective order. (ECF No. 59). Given that the parties have
resolved all other issues, the Court DENIES Plaintiffs’ motion to quash the remaining
subpoenas, as moot.
I.
Relevant Facts
In November 2013, Plaintiffs filed the instant action regarding the purchase,
financing, and warranty of a mobile home they bought from defendant CMH Homes in
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2009. According to Plaintiffs, they were initially told they could purchase the home for
$92,000, without making a down payment, at an interest rate of 2.9% over a 30-year
repayment period, and the home would come with a one-year warranty. However, by the
time the transaction was completed, Plaintiffs had paid $113,000 for the home, financed
at an interest rate of 8.49%, and the home came without a warranty. They later learned
that the total amount they had financed was $136,498.21, which included more than
$11,000 in settlement charges, and a discount fee of $5,239.74 that they claim was never
explained to them, and they did not request. Plaintiffs allege that Defendants took
advantage of their limited education and financial unsophistication. They assert claims
of unconscionable inducement; fraud as a contract defense; and joint venture. Plaintiffs
seek actual, consequential, and incidental damages, civil penalties, attorneys’ fees, and
equitable relief.
In the course of discovery, Defendants served thirteen subpoenas duces tecum on
banks, credit institutions, collection agencies, employers, and a health care provider
with connections to Plaintiffs. Plaintiffs moved to quash the subpoenas, arguing that the
subpoenas requested information that was irrelevant to the matters in dispute, and they
were overly broad. After the motion to quash was filed, the parties conferred and have
now reached an agreement with respect to all of the issues except for two.
First, Plaintiffs object to a subpoena served on Radiology Inc., which requests
medical and billing records related to treatment rendered to Plaintiff Marrian Adkins.
Plaintiffs contend that Ms. Adkins’s health care records are irrelevant to the issues in
dispute. Second, Plaintiffs object to the production of communications logs and notes
from debt collection agencies documenting conversations with Plaintiffs, arguing that
Defendants’ subpoenas are overly broad in scope and are not reasonably calculated to
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lead to the discovery of admissible evidence. Plaintiffs refute Defendants’ claim that the
communication logs are relevant to establish Plaintiffs’ financial sophistication for
purposes of determining procedural unconscionability in the instant action. In Plaintiffs’
view, unrelated call logs simply do not shed light on procedural unconscionability,
which would be determined by examining factors such as Plaintiffs’ age, literacy, and
sophistication, as well as the complexity of contract terms, the circumstances and
setting surrounding the formation of the contract, and the adhesive nature of the
contract at issue here. Moreover, Plaintiffs claim that Defendants’ true purpose in
pursuing the health care records and the communication logs is to harass and embarrass
Plaintiffs.
II.
Discussion
When a subpoena issues under Rule 45 for the purpose of discovery, “Rule 45
adopts the standard[s] codified in Rule 26.” Schaaf v. SmithKline Beecham Corp., 233
F.R.D. 451, 453 (E.D.N.C. 2005). In other words, a subpoena used for discovery must
comply with the scope and limits of discovery set forth in Rule 26, and may be quashed
or modified for the same reasons that would support a protective order under Rule 26.
HDSherer LLC v. Natural Molecular Testing Corp, 292 F.R.D. 305, 308 (D.S.C. 2013).
In this context, a subpoena may be used to discover “any nonprivileged matter that is
relevant to any party’s claim or defense ... if the discovery appears reasonably calculated
to lead to the discovery of admissible evidence.” Fed. R. Civ. P. 26(b). “The scope of
relevancy under the discovery rules is broad, such that relevancy encompasses any
matter that bears or may bear on any issue that is or may be in the case.” Carr v. Double
T Diner, 272 F.R.D. 431, 433 (D.Md.). For purposes of discovery, information is
relevant, and thus discoverable, if it ‘“bears on, or ... reasonably could lead to other
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matter[s] that could bear on, any issue that is or may be in the case. Although ‘the
pleadings are the starting point from which relevancy and discovery are determined ...
[r]elevancy is not limited by the exact issues identified in the pleadings, the merits of the
case, or the admissibility of discovered information.’ Rather, the general subject matter
of the litigation governs the scope of relevant information for discovery purposes.”
Kidwiler v. Progressive Paloverde Ins. Co., 192 F.R.D. 193, 199 (N.D.W.Va. 2000)
(internal citations omitted).
Simply because information is discoverable under Rule 26, however, “does not
mean that discovery must be had.” Schaaf, 233 F.R.D. at 453 (citing Nicholas v.
Wyndham Int'l, Inc., 373 F.3d 537, 543 (4th Cir. 2004)). Discovery that seeks relevant
information may nevertheless be restricted or prohibited pursuant to a Rule 26(c)
motion when necessary to protect a person or party from annoyance, embarrassment,
oppression, or undue burden or expense. Fed. R. Civ. P. 26(c). Moreover, with or
without a motion, the court may limit the frequency and extent of discovery when the
“burden or expense of the proposed discovery outweighs its likely benefit, considering
the needs of the case, the amount in controversy, the parties’ resources, the importance
of the issues at stake in the action, and the importance of the discovery in resolving the
issues.” Fed. R. Civ. P. 26(b)(2)(C)(iii). The protections conferred by Rule 26 are
incorporated in Rule 45(d)(3), which sets forth additional grounds for quashing,
modifying, or molding the terms of a subpoena. HDSherer LLC, 292 F.R.D. at 308
(“Rule 45 does not list irrelevance or overbreadth as reasons for quashing a subpoena.
However, the scope of discovery allowed under a subpoena is the same as the scope of
discovery allowed under Rule 26.”) (citing Cook v. Howard, 484 Fed.Appx. 805, 812
(4th Cir. Aug. 24, 2012) (“Although Rule 45(c) sets forth additional grounds on which a
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subpoena against a third party may be quashed[,] ... those factors are co-extensive with
the general rules governing all discovery that are set forth in Rule 26.”)); see also
Firetrace USA, LLC v. Jesclard, No. cv–07–2001, 2008 WL 5146691, at *2 (D.Ariz. Dec.
8, 2008) (“According to its 1991 Advisory Committee Notes, Rule 45 [(d)](3) ‘tracks the
provisions of Rule 26(c).’ Fed. R. Civ. P. 45. In this way, Rules 45 and 26 are not
mutually exclusive, but rather cover the same ground.”)
Regardless of whether a motion is made under Rule 26(c) or Rule 45(d), the party
opposing discovery has the obligation to submit evidence supporting its claims that the
discovery is unduly burdensome, oppressive, or irrelevant. To prevail on the grounds of
burdensomeness or breadth, the objecting party must do more to carry its burden than
make conclusory and unsubstantiated arguments. Convertino v. United States
Department of Justice, 565 F. Supp.2d 10, 14 (D.D.C. 2008) (the court will only
consider an unduly burdensome objection when the objecting party demonstrates how
discovery is overly broad, burdensome, and oppressive by submitting affidavits or other
evidence revealing the nature of the burden); Cory v. Aztec Steel Building, Inc., 225
F.R.D. 667, 672 (D.Kan. 2005) (the party opposing discovery on the ground of
burdensomeness must submit detailed facts regarding the anticipated time and expense
involved in responding to the discovery which justifies the objection); Bank of Mongolia
v. M & P Global Financial Services, Inc., 258 F.R.D. 514, 519 (S.D. Fla.2009) (“A party
objecting must explain the specific and particular way in which a request is vague, overly
broad, or unduly burdensome. In addition, claims of undue burden should be supported
by a statement (generally an affidavit) with specific information demonstrating how the
request is overly burdensome”).
In this case, Plaintiffs complain that Defendants have issued subpoenas that are
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overly broad, and intrusive, and seek information that is not even remotely relevant to
the issues in dispute. Therefore, the Court must consider Plaintiffs’ motion under the
standards set forth in Federal Rule of Civil Procedure 26 and may fashion a protective
order quashing or modifying the subpoenas to the extent that they seek discovery which
is irrelevant, overly broad, annoying, embarrassing, oppressive, unduly burdensome or
expensive, unreasonably cumulative or duplicative. As the party resisting discovery,
Plaintiffs bear the burden of persuasion.
A.
Subpoena to Radiology Inc.
Defendants request medical records and bills from Radiology Inc. concerning
care and treatment rendered to Marrian Adkins for the period of January 1, 2005
through the present. Defendants argue that these records are relevant for two reasons.
First, Plaintiffs have alleged “annoyance, inconvenience, and fear of losing their home”
as a result of Defendants’ acts. In Defendants’ view, since Plaintiffs have placed their
mental state at issue, Defendants are entitled to Ms. Adkins’s medical records.
Defendants claim that Plaintiffs’ medical bills are equally relevant to the issue of
emotional distress, as the bills from Radiology Inc. were sent to a collection agency;
thus, they potentially contributed to Ms. Adkins’s alleged emotional distress.
Second, Defendants state that Plaintiffs’ counsel recently disclosed that Ms.
Adkins is in the early stages of dementia or Alzheimer’s. In light of this disclosure,
Defendants require Ms. Adkins’s medical records to discover her past and present
competency; her ability to pursue the pending civil action; and the effect her medication
may have on her alleged claims of emotional distress.
In response, Plaintiffs argue that they are not making a claim of emotional
distress. They deny that they have placed their medical or psychological condition at
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issue and assert that Defendants are merely attempting to harass Ms. Adkins by
invading her privacy. Similarly, the medical bills show nothing more probative than that
the Adkinses had other bills at the time they purchased the mobile home. In addition,
Plaintiffs state that Defendants’ argument regarding Ms. Adkins’s early dementia is a
red herring. Plaintiffs provided Defendants with a recent note from Ms. Adkins’s
primary care physician confirming that Ms. Adkins’s is currently competent.
Nonetheless, Ms. Adkins has signed a Power of Attorney to be used in the event that her
condition deteriorates in the future and affects her ability to prosecute this civil action.
Accordingly, her records from Radiology Inc. are not relevant as they have no bearing on
the state of her competence in 2009, or on the future prosecution or outcome of this
case.
The undersigned agrees that Defendants would be entitled to discover Ms.
Adkins’s psychological records if she had placed her mental state at issue in this action.
See Carpenter v. Res-Care Health Services, Inc., Case No. 3:12-cv-08047, 2013 WL
1750464, at *2 (S.D.W.Va. Apr. 23, 2013). However, she has not done so. Defendants
base their contention that Ms. Adkins’s psychological state is at issue on a single
allegation in the complaint, which states: “As a result of Defendants’ acts, Plaintiffs have
suffered annoyance, inconvenience, and fear of loss of home.” Yet this allegation does
not rise to the level of even a “garden variety” emotional distress claim, because
Plaintiffs are not seeking damages for mental distress or anguish. Instead, they demand
that the contract be declared unenforceable, and ask for civil penalties, actual damages,
attorneys’ fees, incidental and consequential damages, and equitable relief. To remove
any lingering doubt, Plaintiffs confirm in their reply memorandum that they are not
making a claim for emotional distress. Therefore, in the absence of a claim seeking
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damages for emotional distress, Defendants are hard-pressed to demonstrate a genuine
need for Ms. Adkins’s medical records.
Similarly, Ms. Adkins’s recent diagnosis simply does not provide a basis for
Defendants’ request to collect nine years of her radiology records. It appears that
Plaintiffs have provided a current statement confirming Ms. Adkins’s competency.
Accordingly, the undersigned finds that the records from Radiology Inc. are not relevant
to any issue in dispute. Consequently, Plaintiffs’ motion to quash the subpoena to
Radiology Inc. is granted.
B.
Subpoenas for Communication Logs
Defendants served four collection agencies with subpoenas requesting, in
relevant part, debt collection logs and other records reflecting communications with
Plaintiffs. Defendants contend that these documents are relevant on the issue of
Plaintiffs’ alleged financial unsophistication, which is the “lynchpin” of their
unconscionable inducement claim. (ECF No. 45 at 9). Plaintiffs originally moved to
quash the subpoenas, but now request a protective order limiting the scope of the
subpoenas on the ground that Defendants do not need to see the substance of every
telephone call Plaintiffs had with a debt collector in order to establish their financial
sophistication. Plaintiffs claim that Defendants want these “sensitive” records as a way
to embarrass and harass Plaintiffs.
Plaintiffs’ financial history, experience, knowledge, and record are plainly
relevant to the issues in dispute in this civil action. As Defendants point out, when
determining whether a contract is unconscionable under West Virginia law, “the
particular facts involved in each case are of utmost importance since certain conduct,
contracts or contractual provisions may be unconscionable in some situations but not in
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others.” Arnold v. United Cos. Lending Corp., 511 S.E.2d 854. 860 (W.Va. 1998). An
examination of the circumstances surrounding a contract necessarily involves an
assessment of the parties to the contract, including their education, intelligence,
business savvy, age, experience, and bargaining power. Certainly, the more information
that can be gathered regarding the financial histories of the parties, the more robust the
evaluation will be as to the unconscionability of the contract. In that context, Plaintiffs’
communications prior to 2009 regarding any financial matter, including debt collection,
arguably provide probative evidence on the issue of unconscionability. Therefore,
Defendants are entitled to obtain communications logs for the time period before the
parties entered into the contract at issue in this litigation.
For the period after 2009, Defendants claim that Plaintiffs’ communications with
debt collectors are relevant not only to the issue of Plaintiffs’ financial sophistication,
but also as to the defenses of laches and failure to mitigate damages. Plaintiffs offer no
argument to rebut Defendants’ position. Federal Rule of Civil Procedure 26(c) allows the
court, for good cause, to issue an order forbidding or limiting discovery when necessary
to protect a party from annoyance, embarrassment, or oppression. The burden to
establish good cause is on the moving party, and must be made by setting forth specific
and particular facts. Broad and conclusory statements of anticipated harm are
insufficient to support a protective order. Baron Fin. Corp. v. Natanzon, 240 F.R.D.
200, 202 (D.Md. 2006). Plaintiffs fail to offer any specific factual showing to support
their assertion that the production of communication logs would be embarrassing,
annoying, or harassing. Indeed, the factual representations from Plaintiffs are so lacking
in detail that the undersigned is unable to tell whether Plaintiffs have actually made an
effort to determine what logs, if any, exist and, if logs do exist, whether they truly
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contain information that is sensitive or embarrassing. Accordingly, the undersigned
finds that Plaintiffs have not carried their burden to demonstrate good cause for a
protective order limiting or forbidding the debt collection communication records or
logs.
Wherefore, for the reasons stated, the Court GRANTS Plaintiffs’ motion to
quash the subpoena issued to Radiology, Inc., (ECF No. 41), and DENIES Plaintiffs’
motion to quash and motion for a protective order regarding the subpoenas seeking
communications with debt collection companies, (ECF Nos. 41, 59). Given that the
parties have resolved the issues pertaining to the other subpoenas, the court DENIES
Plaintiffs’ motion to quash the remaining subpoenas, as moot.
The Clerk is directed to provide a copy of this Order to counsel of record and any
unrepresented party.
ENTERED: September 10, 2014
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