Chesemore et al v. Alliance Holdings, Inc. et al

Filing 1049

ORDER denying 1042 Motion to Quash Plaintiffs' Subpoenas to Financial Institutions by Defendants David B. Fenkell, Karen Fenkell. Signed by District Judge William M. Conley on 7/7/2015. (voc)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN
CAROL CHESEMORE, DANIEL
DONKEL, THOMAS GIECK, MARTIN
ROBBINS, and NANETTE STOFLET, on
behalf of themselves, individually, and on
behalf of all others similarly situated,

Plaintiffs,

ORDER

v.
09-cv-413-wmc
ALLIANCE HOLDINGS, INC., DAVID B.
FENKELL, PAMELA KLUTE, JAMES
MASTRANGELO, STEPHEN W. PAGELOW,
JEFFREY A. SEEFELDT, TRACHTE
BUILDING SYSTEMS, INC. EMPLOYEE
STOCK OPTION PLAN, ALLIANCE HOLDINGS,
INC. EMPLOYEE STOCK OPTION PLAN,
A.H.I., INC., ALPHA INVESTMENT
CONSULTING GROUP, LLC, JOHN MICHAEL
MAIER, AH TRANSITION CORPORATION, and
KAREN FENKELL,
Defendants;
PAMELA KLUTE, JAMES MASTRANGELO,
and JEFFREY A. SEEFELDT,
Cross Claimants,
v.
ALLIANCE HOLDINGS, INC., and STEPHEN W.
PAGELOW,
Cross Defendants.

In the latest of a string of disputes about the appropriate scope of post-judgment
discovery, defendant David B. Fenkell seeks a motion to quash plaintiffs’ subpoenas duces
tecum served on Barclays Capital, Inc. and Morgan Stanley, arguing that these subpoenas
“inappropriately seek to obtain private and confidential records of Karen Fenkell, the Fenkell

Children and Mr. Fenkell’s Mother.” (Fenkell’s Mot. (dkt. #1043) 1.)1 The court will deny
this motion for the same reasons it granted plaintiffs and Alliance Holdings, Inc.’s previously
filed motions to compel. (2/3/2015 Op. & Order (dkt. #1031).)
While the discovery at issue in this motion extends beyond Mrs. Fenkell to the
Fenkell children and Mr. Fenkell’s mother, the discovery is nonetheless permissible under
Federal Rule of Civil Procedure 69. “In aid of the judgment or execution, the judgment
creditor or a successor in interest whose interest appears of record may obtain discovery from
any person -- including the judgment debtor -- as provided in these rules and in the procedure
of the state where the court is located.” Fed. R. Civ. P. 69(a)(2); see also Magnaleasing, Inc. v.
Staten Island Mall, 76 F.R.D. 559, 561-62 (S.D.N.Y. 1977) (recognizing that discovery into a
third-party’s assets is allowed where the “relationship between the judgment debtor and the
[third-party] is sufficient to raise a reasonably doubt about the bona fides of the transfer of
assets between them.”). Throughout this case, plaintiffs have submitted sufficient evidence
of financial manipulation and transfer of moneys under Mr. Fenkell’s control to justify the
discovery sought here.
If Mr. and Mrs. Fenkell’s recent deposition testimony is credited that “no assets were
transferred to the Fenkell Children or Mr. Fenkell’s Mother in an effort to evade the
Judgement herein” (Fenkell’s Mot. (dkt.#1043) 6), then the discovery will prove a dead end.
If not, then plaintiff were wholly justified in seeking information from financial institutions.
Regardless, plaintiffs are entitled to know.

1

The Fenkells have standing to seek an order quashing the subpoenas because they have
a personal right or privilege in the underlying financial information sought by the
subpoenas. See generally 9A Charles Alan Wright & Arthur R. Miller, Fed. Practice &
Procedure § 2459 at p.436 n.7 (3d ed. 2008) (citing cases).
2

Finally, Fenkell contends that the subpoenas must be quashed because they seek
private and confidential financial information. Rule 45 contemplates quashing of subpoenas
which seek disclosure of a privileged matter, but provide no basis for quashing a subpoena
seeking confidential or private information.

See Fed. R. Civ. P. 45(d)(3)(A).

Instead,

Fenkell’s argument seems to be that the disclosure of this information poses an undue burden
on his wife, children and mother. For the reasons articulated above and in its prior order, the
court has already found that this financial information is necessary for plaintiffs and Alliance
Holdings to execute on the court’s judgment. Moreover, there is no basis for finding that the
information is available from another source; nor would accessing it from another source allay
Fenkell’s privacy concerns. As such, “even if such information were considered confidential,
the fact that sensitive information is involved in litigation gives a party neither an absolute
nor automatic right to have the discovery process hindered.” Andrews v. Raphaelson, No. 5:09cv-077-JBC, 2009 WL 1211136, at *4 (E.D. Ky. Apr. 30, 2009).

ORDER
IT IS ORDERED that defendants David B. Fenkell and Karen Fenkell’s motion to
quash plaintiffs’ subpoenas to financial institutions (dkt. #1042) is DENIED.
Entered this 7th day of July, 2015.
BY THE COURT:
/s/
__________________________________
WILLIAM M. CONLEY
District Judge

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