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Estate of Petersen v. Bitters

United States District Court, D. Nebraska

June 20, 2018

ESTATE OF JOYCE ROSAMOND PETERSEN, deceased; Plaintiff,
v.
WILLIAM E. BITTERS, ROBERT W. BOLAND JR., JOHN L. HENRY, and UNITED FINANCIAL SERVICES, Defendants.

          MEMORANDUM AND ORDER

          CHERYL R. ZWART UNITED STATES MAGISTRATE JUDGE

         Plaintiff has moved to compel responses to deposition questions posed to Defendant Boland, for sanctions, for an order permitting a second deposition, for an opportunity to file supplemental responses to Defendants' motions for summary judgment, and to continue the trial. (Filing No. 208).

         Boland's deposition was taken on April 16, 2018-the last day for taking that deposition. During the deposition, counsel contacted my chambers to discuss ongoing problems, but I was unavailable until mid-afternoon. Counsel then spoke with Judge Rossiter, who advised Plaintiff's counsel to bring the issues before me for resolution. Plaintiff's counsel then waited over five weeks to file a motion, along with his 55-page brief and a request to continue the trial because of the pending discovery disputes.

         When Plaintiff's motion was filed, the pretrial conference was scheduled to be held on June 12, 2018, with trial set for June 25, 2018. Absent a deviation from the local rules, (see NEGen R. 1.1(c)), Plaintiff's motion would not be fully submitted prior to the pretrial conference. The court therefore entered an expedited briefing schedule. The motion is fully submitted.

         As the following explains, the discovery and sanctions issues raised in Plaintiff's motion, (Filing No. 208), will be denied. That portion of Filing 208 which requests a Rule 56(d) continuance will be addressed by Judge Rossiter.

         ANALYSIS

         During Boland's deposition, Plaintiff's counsel designated the following deposition lines and pages for the court's review: 10:5; 26:14; 39:8; 40:24; 41:20; 43:13; 47:10; 47:24; 48:8; 68:13; 76:1; 138:15; 146:1; & 150:14. (Filing No. 209-1, at CM/ECF p. 5). Gaudet further argues that Zarghouni improperly coached Boland during the deposition, obstructed the deposition with threats and speaking objections, and terminated the deposition before Gaudet's questioning was complete.

         A. Designated Deposition Questions and Improper Coaching.

         Line 10:5

         Gaudet asked Boland “You don't know what UFIS, Inc., is?” Boland answered, “No.” (Filing No. 209-1, at CM/ECF p. 11, at lines 8:2-4). When Boland later stated that he knew nothing about that entity, Gaudet asked how Boland knew it was an entity. When the Boland responded that Gaudet used “Inc.” as part of the USIF's name, indicating it was a corporation, Gaudet erroneously denied using “Inc.” to describe or name UFIS, and then went on for three pages asking Boland about USIF's ownership, directors, employees, etc.

         As part of this line of questioning, Gaudet asked Boland about UFIS's source of income. Zarghouni objected as to “form. Asked and answered. He has no idea what that entity is.” Gaudet claims this objection was improper coaching. (Filing No. 209, at CM/ECF p. 16).

         Read in context, Zarghouni's comment that Boland “has no idea what that entity is” was not coaching, but rather an attempt to protect the witness from repetitive questions for which Boland lacked foundation. Once Boland stated he knew nothing about UFIS, the remaining questions about that entity were pointless, asked and answered, and harassing. Zarghouni's objection as to asked and answered and harassment is sustained.

         Line 26:14

         Gaudet asked Boland to explain why he failed to produce receipts for a business trip Boland made to South Dakota in 2015 to speak with potential clients. Those clients are wholly unrelated to the promissory note at issue in this case. Zarghouni objected as to form, and he asked Gaudet to explain why the question was relevant. Gaudet then purported to instruct Zarghouni on how depositions work, claiming Zarghouni cannot ask opposing counsel to clarify how a specific line of questioning is relevant.

         Zarghouni did not instruct Boland not to answer the questions, and Gaudet did not explain how the questions were relevant. Instead, Gaudet contacted my chambers for assistance. Since I was not available to take the parties' call, Gaudet continued his questioning on the South Dakota receipt issue, and Boland answered the questions.

         Contrary to Gaudet's argument, Zarghouni was not obstructing the deposition when he asked Gaudet to explain how Boland's receipts from a 2015 trip to South Dakota are relevant to above-captioned lawsuit. The court is not, and cannot be, an on-call referee to resolve discovery disagreements. A judge is not always available. As such, counsel are encouraged to confer as professionals acting in good faith regarding disputes over discovery requests and objections. This principle applies to not only written discovery, but also depositions.

         Since the above-captioned action arises from a 2008 transaction involving entirely different people, the relevance of Gaudet's questions regarding Boland's 2015 trip receipts was highly suspect. Zarghouni did not act improperly by initiating a dialogue to understand how Gaudet's questions could be relevant to the issues being litigated.

         Line 39:8; Line 40:24; Line 41:20; Line 43:13

         Gaudet asked for the name of a potential client Boland met in Omaha in March of 2018 based on a referral from Bitters. Boland responded that he was not going to disclose the name of this potential business client, and he refused to answer the question. (Filing No. 209-1, at CM/ECF pp. 41, 44, lines 38:14-39; 41:20). Zarghouni objected on attorney-client privilege.

         Boland met with the potential clients on two afternoons in March of 2018. When Boland could not recall the specific dates of those meetings, Gaudet asked if Boland's calendar in his office down the hall would assist in answering the question. Zarghouni instructed Boland not to go to his office to review the calendar. (Filing No. 209-1, at CM/ECF p. 43, lines 40:24). Bitters introduced Boland to the potential client prior to the first meeting, but he was not present at the meeting itself. Boland discussed confidential information with the client regarding legal work Boland could provide on the client's behalf. Bitters attended the meeting with the client on the second day. Boland refused to answer whether the client paid a retainer to Boland. Zarghouni objected on attorney-client privilege, instructing Boland not to answer the question. Boland did not answer the question. (Filing No. 209-1, at CM/ECF pp. 46, lines 42:17-43:18).

         The attorney-client privilege protects confidential disclosures made by a client to an attorney to obtain legal representation, but it generally does not apply to client identity and fee information. United States v. Sindel, 53 F.3d 874, 876 (8th Cir. 1995). However, the privilege protects even client identity if in the context of other information already known, revealing the identity would necessarily disclose confidential communications; that is, the client's identity was the “last link” in disclosing confidential communications imparted during attorney-client communications. Sindel, 53 F.3d at 876.

         The only explanation provided for not disclosing the identity of Boland's client occurred during counsel's conversation with Judge Rossiter. Zarghouni explained that Boland's potential client “is a well-known person and currently involved in a major audit, and he did not want to disclose his identity.” (Filing No. 209-1, at CM/ECF p. 9, lines 87:20-22). This limited record does not support a finding that the identity of Boland's March 2018 client contact, and whether that potential client ever paid a retainer, was privileged information. Instructing Boland not to answer based on the attorney-client privilege was not proper.

         But it was also not sanctionable. The Federal Rules of Civil Procedure, including those rules governing the imposition of sanctions, must be construed and administered to secure the just, speedy, and inexpensive determination of every action. Fed. R. Civ. P 1. Here, Plaintiff's counsel states he was asking questions to discover whether Bitters and Boland were partners, or implied partners, regarding the loan Plaintiff extended to Defendant Henry and alleged financial reports and representations to Plaintiff regarding payments on that loan. (Filing No. 209, at CM/ECF pp. 50-53). The promissory note at issue was signed on February 14, 2008. (Filing No. 99, at CM/ECF p. 5, lines 5-7). Plaintiff passed away on October 20, 2013. (Filing No. 99, at CM/ECF p. 2, lines 6-7). While Plaintiff's complaint alleges that “[a]s the sole legal officer in his partnership with Bitters, Boland knew or should have known about the account statements that Bitters issued through their partnership to Ms. Peterson and other investors, ” (Filing No. 99, at CM/ECF p. 10-11, ¶35), Boland did not know Bitters prior to 2012, (Filing No. 209-1, at CM/ECF p. 15, lines 12:13-22), and never knew Plaintiff or Defendant Henry-the parties to the promissory note at issue. (Filing No. 209-1, at CM/ECF p. 157, lines 154:11-13).

         As to the deposition questions at issue, Boland's meeting with a prospective client in Omaha three months ago is not relevant to the claims presented in this litigation. “Some threshold showing of relevance must be made before parties are required to open wide the doors of discovery and to produce a variety of information which does not reasonably bear upon the issues in the case.” Hofer v. Mack Trucks, Inc., 981 F.2d 377, 380 (8th Cir. 1992).

         And even if assumed to be marginally relevant for the purposes of discovery only, asking Boland to identify a prospective client he met with in 2018, to review his office calendar to determine the specific dates of those meetings, and to state whether he received a retainer fee-and certainly permitting any new deposition to obtain answers-is highly disproportionate to the needs of the case and the issues being litigated. (Fed. R. Civ. P 26(b)(1)). This is particularly true where Plaintiff's counsel has been litigating for over three years and has already billed Plaintiff's estate more than $100, 000 in attorney fees to recover on a $150, 000 promissory note.

         Gaudet argues Zarghouni improperly instructed Boland not to review his office calendar to answer Gaudet's questions regarding the dates of Boland's March 2018 meetings with the Omaha prospective client. Gaudet is incorrect. Boland was not a Rule 30(b)(6) witness. As such, he was not required to prepare for the deposition, and he not required to review any documents before or during the deposition to provide answers. Moreover, once a document is reviewed during a deposition to refresh recollection, any privilege as to the document-or at least the document portion reviewed-is generally deemed waived. Napolitano v. Omaha Airport Auth., 2009 WL 1393392, at *4 (D. Neb. May 11, 2009). Boland was not required to encounter that risk by reviewing his ...


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