Opinion
17-30581
01-02-2019
M------ M-----, Petitioner, v. J------- M-----, Respondent.
File No. Petition No.
ORDER
MOTION TO COMPEL AND FOR SANCTIONS
ORDER
Currently before the Court is a Second Motion to Compel and for Sanctions filed by J------- M----- (hereinafter "Wife") against M------ M----- (hereinafter "Husband").
BACKGROUND
The Court takes judicial notice of the entire record in this matter. However, only the facts relevant to the pending Motion will be discussed herein.
On September 21, 2017, Husband filed the underlying Petition for Divorce in this matter.
On January 17, 2018, this Court entered an Order, wherein Wife's request for interim alimony was denied, but Husband was ordered to pay certain expenses associated with the home Wife was residing in. Further, Husband was ordered to pay all of Wife's out-of-pocket medical expenses. Husband was also ordered to pay expenses associated with the parties' condominium in Ocean City, Maryland.
On May 1, 2018, Wife filed a Request for Production of Documents requesting documentation from Husband related to the parties' assets and liabilities, among other things. Husband's responses to Wife's Request for Production of Documents were due to Wife's counsel by May 31, 2018. On June 29, 2018, Husband apparently provided some responses to the Request for Production of Documents, but did not include complete responses, and redacted information relevant to determining his ability to pay alimony. On August 1, 2018, Wife sent correspondence to Husband requesting un-redacted financial statements be sent to her by August 15, 2018.
On August 6, 2018, this Court entered an Order indicating that Husband was to make a payment to Wife of $36,500, representing her share of the sale proceeds from a property the parties owned in Arizona. The Order additionally stated that Husband was to make the payments as ordered on January 17, 2018, which he had not previously been making.
On August 29, 2018, Wife filed a Motion to Compel and for Sanctions. The motion alleged Husband was non-compliant with this Court's Orders. Specifically, the allegations were that: Husband continued to not make payments as required by the January 17, 2018 and August 6, 2018 Orders; that Husband had not made the $36,500 payment to Wife, as required by the August 6, 2018 Order; and that Husband has still not provided the documents in Wife's Request for Production of Documents. Husband did not respond to this Motion.
On September 14, 2018, this Court granted Wife's motion and entered an Order, wherein Husband was to provide the outstanding portions of the Request for Production of Documents to Wife's counsel by September 24, 2018. Further, the Order dictated that if Husband failed to provide the documents he would be prevented from entering any documentation, testimony, or other evidence regarding the same at the hearing on October 16, 2018, or thereafter. Further, the Order stated that Husband would be responsible for Wife's attorney's fees and costs. On October 15, 2018, after having received an affidavit from Wife's counsel, this Court ordered Husband to pay Wife's attorney's fees in the amount of $627.50.
On November 20, 2018, Wife filed her Second Motion to Compel and for Sanctions (hereinafter "Motion"), which is discussed herein.
In the pending Motion, Wife alleges that Husband had previously failed to disclose, in his financial disclosures and during the parties' settlement conference, a Diner's Club Credit Card account. Wife also alleges that Husband failed to disclose a Bank of America account (Acct No.[XXXX]). Wife alleges that she inadvertently became aware of these accounts when reviewing Bank of America records for an account that was disclosed. In addition to not disclosing these accounts, Wife complains that Husband did not provide the statements for these accounts in his response to her Request for Production of Documents. Wife's counsel contacted Husband's counsel on October 10, 2018 and requested Husband execute authorizations for Wife to obtain statements for the Diner's Club and Bank of America accounts from 2015-present. On October 23, 2018, Husband's counsel sent Wife's counsel two months of 2016 statements for the Diner's Club account, which were apparently redacted. Wife's counsel contacted Husband's counsel on November 7, 2018 requesting the missing and un-redacted statements. To which Husband's counsel responded on November 15, 2018 and stated: "I'd like to see what documents you really need in order to discuss settlement."
Wife also alleges that Husband has failed to pay her attorney's fees as ordered by this Court on October 15, 2018. Wife further alleges that Husband has continued to not make the payments he was required to make under this Court's January 17, 2018 Order.
Husband filed a Response to Second Motion to Compel and for Sanctions on December 3, 2018. Therein, Husband does not necessarily deny the actions complained of in Wife's Motion. Rather, he attempts to provide justification for them. Specifically, Husband continuously references an objection to providing personal expenses for which he will not seek as reasonable expenses, and for which he is using funds that he is not seeking credit for in the ancillary, but out of his share of the marital assets. Husband also contends that some of the material Wife is requesting has already been provided to her.
See Husband's Response to Second Motion to Compel and for Sanctions at ¶9, 10, 21 and 23.
In Husband's Response, which otherwise sequentially addressed each paragraph of Wife's Motion, Husband eluded responding to Wife's averment, that he has not paid the attorney's fees as previously ordered, by skipping that paragraph.
See Husband's Response to Second Motion to Compel and for Sanctions at ¶19-21
The parties are currently scheduled for a combined Ancillary and Rule to Show Cause Hearing on May 7, 2019.
DISCUSSION
The Delaware Family Court Rules of Civil Procedure govern discovery in matters ancillary to divorce. Specifically, Rule 26(g)(1) states:
(g) Scope of discovery. -- Unless otherwise limited by order of the Court in accordance with these Rules, the scope of discovery is as follows:
(1) In general. -- Parties may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action, whether it relates to the claim or defense of the party seeking discovery or to the claim or defense of any other party including the existence, description, nature, custody, condition and location of any books, documents, or other tangible things and the identity and location of persons having knowledge of any discoverable matter. It is not ground for objection that the information sought will be inadmissible at the trial if the information sought appears reasonably calculated to lead to the discovery of admissible evidence.
Husband's objection to providing un-redacted statements because the redactions are of personal expenses for which he will not seek as reasonable expenses, and for which he is using funds that he is not seeking credit for in the ancillary, but out of his share of the marital assets cannot be sustained. It should also be noted that Husband is not asserting that the documents are protected by any applicable privilege.
First, Husband's argument that the redacted expenses are coming from his share of marital assets fails. A final distribution of marital assets has not occurred yet. Therefore, no share of the marital estate has been assigned to him. It is unclear if Husband is alleging that he is paying for this account out of the proceeds he received from the sale of the Arizona property. If so, this argument would fail because the proceeds of the Arizona property sale were only distributed in August 2018, and Husband does not address what proceeds he was using prior to that. This argument also clearly fails to the extent that Wife is requesting statements which were generated during the marriage.
Second, Husband's personal expenses, whether he is claiming them as reasonable expenses or not, are relevant to the ancillary matters of alimony and property division. One of the factors the Court must consider is "the ability of the other party to meet his or her needs while paying alimony." Without knowing what the redacted portions of the statements indicate, the Court can only hypothesize about their relevance. Husband's ability to meet his needs while paying alimony would be evidenced by the amount of money he is spending on, what he refers to as, "personal expenses." Further, in dividing, distributing, and assigning marital property, the Court must consider several factors. Husband's redacted expenses and Bank of America statements would likely lead to discoverable information relevant to factor three, "The [...] amount and sources of income, [...] employability, estate, liabilities, and needs of each of the parties." Husband's redacted expenses could also be relevant to determining factor six, "the contribution or dissipation of each party in the acquisition, preservation, depreciation or appreciation of the marital property.[...]" Husband's redacted expenses would probably also be relevant in determining factors eight and ten, the economic circumstances of each party and the debts of the parties.
13 Del. C. §1513(a)(8) & (10)
The Diner's Club Credit Card statements and the Bank of America Statements, including the redacted portions thereof, are relevant to the subject matter in the underlying action. Husband also does not claim that these documents, or the redacted portions thereof, are privileged. Therefore, both sets of documents are discoverable, in their full and un-redacted state. Husband's objection to the contrary is erroneous.
Regarding Husband's claim, that some of the requested documents had already been provided to Wife, the Court is without sufficient evidence to accept or reject this claim. The Court cannot resolve Husband's contention that he provided the documents against Wife's contention that she did not receive them. To the extent that Husband has already provided the requested documents, it should not be overly burdensome for him to provide them again, or otherwise show evidence to Wife and her attorney that he already provided them.
Husband's counsel's e-mail, responding to Wife's counsel's request for the documents, that "[she would] like to see what documents [Wife's counsel] really need[s] in order to discuss settlement" was also inappropriate in light of the applicable rules. The purpose of discovery is not to obtain only the documents necessary for settlement, but to obtain documents relevant to litigation. It is also advisable that each party has information regarding all of the other party's financial circumstances before negotiating a settlement. To the extent that the e-mail was targeted at evading production of the documents, it was also misguided. It is not the responsibility of the party requesting discovery to prove that they will be admissible or used at trial. A party may seek production of any information which appears reasonably calculated to lead to the discovery of admissible evidence. As is discussed further below, Husband had the burden of proving that the requested documents were sought for an improper purpose, which he does not attempt to do.
Del. Fam. Ct. R.C.P. Rule 27(g)(1)
The Court must now address Wife's assertion that Husband failed to disclose the Diners Club and Bank of America accounts before Wife serendipitously discovered them. Husband clearly disclosed Bank of America account [XXXX] on the Wright chart attached to the Ancillary Pretrial Stipulation. However, he did not list a value for the account. The Wright chart also indicates that it is a jointly-titled account. It is unclear if Husband was referring to the marital versus non-marital ownership when he listed it as jointly-titled, or if both parties are actually named on the account. If the situation is the latter, Wife would have been aware that this account existed without disclosure from Husband. Whichever the case may be, the Court cannot find that Husband failed to disclose the existence of this account, because it was in fact disclosed.
Contrastingly, the Court cannot find an instance where the Diner's Club Credit Card was disclosed. Wife specifically requests "all personal and business credit card statements [...] for the past three years." Husband responds by stating "Husband objects to the Requests to the extent they are overly broad, burdensome, vexatious, and unreasonable. Respondent has provided some statements, in an effort to be responsive, as Exhibit 8. Petitioner reserves the right to supplement this Request." Husband's response is incomplete in that it fails to disclose the Diner's Club Credit Card, not only to the extent that he objected to providing the requested documents, but in its entirety. Husband does not articulate how Wife's request was overly broad, burdensome, vexatious, or unreasonable. The scope of discovery is broad and thus, objections to discovery requests, in general will not be allowed unless there have been clear abuses of the process which would result in great and needless expense and time consumption. It is the burden of the party objecting to discovery to show why the requested information is improperly requested. Husband failed to meet this burden, therefore his objection must be overruled.
See Respondent's Second Request for Production of Documents Directed to Petitioner at ¶9.
See Husband's Response to Id.
Hunter v. Bogia, 2015 WL 5050648, at *3 (Del. Super. Ct. July 29, 2015) (citing: Prod. Res. Grp., L.L.C. v. NCT Grp., Inc., 863 A.2d 772, 802 (Del. Ch. 2004).)
Id.
Husband was already ordered to provide the requested documents to Wife. Husband failed to do so. Furthermore, Wife's counsel demonstrated to Husband's counsel, in multiple letters, why the Diner's Club and Bank of America statements were necessary for trial. Nonetheless, Husband chose to continue objecting to production of the documents. The Delaware Family Court Rules of Civil Procedure allow the Court to impose sanctions as are just. Specifically, Rule 37(b) states:
See this Court's Order of September 14, 2018
(b) Failure to comply with order. --
(1) Omitted.
(2) Sanctions by Court. -- If a party or an officer, director, or managing agent of a party or a person designated under Rule 30(b)(6) or 31(a) to testify on behalf of a party fails to obey an order to provide or permit discovery, including an order made under paragraph (a) of this Rule or Rule 35, the
Court may make such orders in regard to the failure as are just, and among others the following:
(A) An order that the matters regarding which the order was made or any other designated facts shall be taken to be established for the purposes of the action in accordance with the claim of the party obtaining the order;
(B) An order refusing to allow the disobedient party to support or oppose designated claims or defenses, or prohibiting that party from introducing designated matters in evidence;
(C) An order striking out pleadings or parts thereof, or staying further proceedings until the order is obeyed, or dismissing the action or proceeding or any part thereof, or rendering a judgment by default against the disobedient party[.]
This is now the second time Wife has had to resort to filing a Motion to Compel and for Sanctions in order for Husband to comply with her discovery requests. The Court notes that the first Motion to Compel resulted in an Order expressly stating that Husband was to provide the requested documents to Wife. The Order also directed Husband to pay Wife's attorney's fees, which Husband admitted, as is discussed below, that he has not done. Husband failed to follow the September 14, 2018 Order with respect to the Diner's Club and Bank of America statements. Wife's counsel informed Husband's counsel on multiple occasions that requested documents were missing. Wife's counsel also articulated why the documents were relevant and necessary. Husband continued his refusal to produce the documents. The Court finds this refusal to be baseless.
Husband's refusal to provide the requested documents necessitated litigation which would not have otherwise been necessary. Consequently, Wife was forced to incur attorney's fees and costs which would not have been incurred but for Husband's actions.
Husband also admits, at least for purposes of this pleading, that he did not pay the attorney's fees which he was previously ordered to pay. The Delaware Family Court Rules of Civil Procedure provide that averments in a pleading to which a responsive pleading is required, other than those as to the amount of damage, are admitted when not denied in the responsive pleading. The Rules also provide that an Answer shall be required in all civil actions, where child support is not the sole issue. Therefore, Husband's failure to respond to paragraph 20 of Wife's Motion is deemed an admission. The paragraph read:
Del. Fam. Ct. R.C.P. Rule 8(e)
Del. Fam. Ct. R.C.P. Rule 8(b) --------
"On or about October 15, 2018, this Honorable Court awarded Respondent $627.50 in attorney's fees and costs in regard to her first Motion to Compel and for Sanctions, payable by Petitioner by November 15, 2018. To date, Petitioner has failed to comply with this Honorable Court's Attorney's Fees Order and remit payment to Respondent or undersigned counsel's office in the ordered amount."
Considering that Husband also avoided responding to the issue of his non-compliance with this Court's October 15, 2018 Order in paragraph 24 of his response, the Court can only conclude that Husband's failure to respond was intentional.
CONCLUSION
Wife's request for Husband's Diner's Club and Bank of America statements were within the scope of material discoverable under Del. Fam. Ct. R.C.P. Rule 26(g)(1). The portions which Husband redacted, claiming that they were for personal expenses for which he will not seek attribution, are relevant to the underlying litigation. Husband does not allege that the redacted portions are subject to any applicable privilege. Husband failed to meet the burden of proving Wife's discovery request was improper. Furthermore, Husband's objection to the original discovery request, although these accounts were not disclosed at this point, is without merit and is therefore overruled.
The Court finds that Husband's refusal to provide the documents was not justified by any reasonable objection to responding. The Court also noted that Husband's failure to provide the documents was in direct violation of its September 14, 2018 Order. The Court finds that an imposition of sanctions is appropriate and just in this case. As such, Husband will be ordered to pay Wife's attorney's fees and costs relevant to presenting this Motion.
Based on the forgoing, the Court hereby ORDERS the following: (1) Wife's Motion to Compel and for Sanctions is GRANTED, within fourteen (14) days, Husband shall provide, to Wife's counsel, un-redacted Diner's Club Credit Card statements for the period of August 2015 to Present; (2) within fourteen (14) days, Husband shall provide, to Wife's counsel, un-redacted statements for the Bank of America account ([XXXX]) for the period of August 2015 to Present; (3) should Husband fail to provide the above documents within fourteen days, he will be prevented from introducing any testimony or evidence on his behalf regarding any of the requested documentation at trial, specifically, evidence and testimony relating to his monthly expenses, liabilities, and ability to pay support to Wife; (4) Husband's failure to comply with this Court's October 15, 2018 Order will be addressed at the Rule to Show Cause hearing on May 7, 2018; (5) Wife is granted leave to amend her Petition for Rule to Show Cause to include the new allegations; (6) Husband shall be responsible for Wife's attorney's fees and costs with regard to her Second Motion to Compel and for Sanctions; (7) Wife's Counsel shall submit an Affidavit of Fees within thirty (30) days of the date below.
IT IS SO ORDERED this 2nd day of January, 2019.
PETER B. JONES, JUDGE