United States District Court, E.D. Wisconsin
NANCY DEWEY individually and as a trustee, THE NANCY DEWEY LIVING TRUST, THE NANCY DEWEY 2015 NEA GRANTOR RETAINED ANNUITY TRUST, THE NANCY DEWEY 2015 P&D GRANTOR RETAINED ANNUITY TRUST, THE IRREVOCABLE TRUST FOR THE GRANDCHILDREN OF NANCY AND DOUGLAS DEWEY, JOHN DEWEY individually and as a trustee, THE JOHN D. DEWEY LIVING TRUST, THE JOHN D. DEWEY IRREVOCABLE CHILDREN'S TRUST, THE ABIGAIL DEWEY IRREVOCABLE TRUST, THE ERIN DEWEY IRREVOCABLE TRUST, THE IAN DEWEY IRREVOCABLE TRUST, THE SHEAMUS DEWEY IRREVOCABLE TRUST, THE ABIGAIL DEWEY DESCENDANTS TRUST, THE ERIN DEWEY DESCENDANTS TRUST, THE IAN DEWEY DESCENDANTS TRUST, THE SEPARATE TRUSTS FOR IAN DEWEY, SHEAMUS DEWEY, ERIN DEWEY, ABIGAIL DEWEY, and THE SHEAMUS DEWEY DESCENDANTS TRUST, Plaintiffs,
KURT BECHTHOLD, MARK FILMANOWICZ, DAVID BECHTHOLD, PAYNE & DOLAN, INC., NORTHEAST ASPHALT, INC., CONSTRUCTION RESOURCES MANAGEMENT, INC., ZENITH TECH, INC., and TIMBERSTONE OF RICHFIELD, INC., Defendants.
Stadtmueller, U.S. District Judge
September 18, 2019, Plaintiffs filed a non-dispositive motion
to compel compliance with the Court's inspection order,
see (Docket #54), and various discovery obligations.
(Docket #156). Specifically, Plaintiffs contend that
Defendants have not provided access to the accounting records
they seek or produced enough documents in response to their
discovery requests. Id. at 2-3. Plaintiffs have
produced over 17, 000 documents, while Defendants have
produced a mere 6, 100 documents to date. (Docket #157 at 2;
Docket #163 at 2). Plaintiffs explain that third party
subpoena responses suggest that Defendants have been
withholding relevant documents. (Docket #156 at 3; Docket
#157-12 (emails with David Bechthold regarding companies'
taxable income); Docket #157-13 (accounting information for
Northeast Asphalt, Inc. and Payne & Dolan, Inc.)).
Finally, Plaintiffs contend that Defendants have withheld
information regarding damages to their counterclaim. (Docket
#156 at 3-4).
support of their motion, Plaintiffs filed over 250 pages of
affidavits, email exchanges, and discovery responses that
demonstrate Defendants' discovery deficiencies.
See (Docket #157). Defendants swiftly responded,
contending that it is an abuse of the process to use a
non-dispositive motion to litigate a motion to compel, and
requesting the matter be referred to Magistrate Joseph for
further proceedings (which would include their own discovery
dispute). (Docket #160). Plaintiffs replied, explaining that
there is no time for full briefing on the motion to compel or
for magistrate referral. (Docket #161). Not to be outdone,
Defendants moved for leave to file a sur-reply, (Docket
#162), claiming that Plaintiffs have contributed to the delay
by rescheduling depositions, (Docket #163). Late in the day,
Plaintiffs also moved for leave to file a sur-response,
(Docket #164), which reiterated their position and acquiesced
to an expedited hearing, if deemed necessary, (Docket #165).
Upon consideration of the parties' extensive written
submissions, the Court finds that a hearing is unnecessary,
and for the reasons which follow, the Plaintiffs' motion
to compel will be granted.
may obtain discovery “regarding any nonprivileged
matter that is relevant to any party's claim or defense
and proportional to the needs of the case.”
Fed.R.Civ.P. 26(b)(1). “Information within this scope
of discovery need not be admissible in evidence to be
discoverable.” Id. “Evidence is relevant
in a discovery context if it is relevant to the subject
matter of the litigation as Rule 26(b)(1) states, not just
the particular issues presented in the pleadings.”
Eggleston v. Chi. Journeyman Plumbers' Local Union
No. 130, U.A., 657 F.2d 890, 903 (7th Cir. 1981).
day one, Defendants have engaged in what can charitably be
described as dilatory obfuscation. The time has come for them
to comply with the Court's discovery order from March,
and to engage, in good faith, with Plaintiffs in discovery.
Defendants' contention that this issue has not been
appropriately briefed or litigated is belied by the lengthy
docket and the vast amount of Court resources already
expended on this dispute. See (Docket #54, #75, and
#86). Plaintiffs have provided ample evidence that Defendants
have not been forthcoming with all relevant documents.
See e.g., Docket #157-12; Docket #157-13). This
sufficiently illustrates an outcome that the last year has
suggested: Defendants are hiding the ball. It strains
credulity that Defendants-which include five companies-have
found only 6, 100 documents are relevant to the subject
matter of this litigation, while Plaintiffs have produced
nearly 20, 000 documents. Finally, there is no discernable
reason why, in light of the amended protective order, (Docket
#159), Defendants could not respond to Plaintiffs'
requests regarding their counterclaim damages. In response to
Plaintiffs' legitimate concerns, Defendants do nothing
but dig their heels into the mud and attempt to stall
proceedings further. Having reviewed the parties'
submissions, the Court has determined that the appropriate
course of action is to grant Plaintiffs' motion to
the Court grants a motion to compel, it will typically
require the non-movant to pay the movant's
“reasonable expenses incurred in making the motion,
including attorney's fees.” Fed.R.Civ.P.
are three exceptions to this rule:
(i) the movant filed the motion before attempting in good
faith to obtain the disclosure or discovery without court
action; (ii) the opposing party's nondisclosure,
response, or objection was substantially justified; or (iii)
other circumstances make an award of expenses unjust.
juncture, the Court sees no reason not to award fees to the
Plaintiffs. There is no dispute that Plaintiffs attempted to
confer with Defendants about the discovery deficiencies prior
to seeking recourse with the Court. See (Docket
#157-1, #157-7 to #157-11). No. other exception is
applicable. Defendants claimed that they fulfilled their
obligations to Plaintiffs, and spent five lines of their
response brief telling the Court that they “very much
look forward to explaining” how hard they have worked
to produce the relevant documents. (Docket #160 at 2). But a
wiser use of their time and their clients' resources
would have been to provide the Court with an explanation as
to why they failed to produce clearly relevant documents that
came to light, instead, from third parties, or to advance a
colorable argument that the circumstances make the award of
expenses unjust. It seems, however, that Defendants'
arsenal of arguments has been reduced to grumbling and
blame-shifting. As discussed above, these discovery issues
have been properly litigated -a significant portion of this
case has been focused, in some way or another, on
Defendants' obligation to provide Plaintiffs with the
materials they need to value their shares. Not only that, but
Defendants are reminded of their obligation to provide
Plaintiffs with any material that might reasonably lead
to discoverable information. They have failed to do so.
In light of this, the Court will award Plaintiffs the costs
and fees associated with this motion, which, fortunately, has
taken only two days to resolve.
IT IS ORDERED that Plaintiffs' motion to
compel (Docket #156) be and the same is hereby
GRANTED; Defendants be and the same are
hereby ordered to supplement their discovery responses and
document production with all non-privileged documents
reasonably related to the subject matter of the litigation;
IS FURTHER ORDERED that the parties' motions for
leave to file sur-replies (Docket #162 and #164) be and the
same are hereby GRANTED; and
IS FURTHER ORDERED that Plaintiffs be and the same
are hereby awarded the reasonable costs and fees ...