Opinion
George W. Ledford, Englewood, Ohio, Trustee.
John Ducker, Dayton, Ohio, for defendants.
John E. Breidenbach, Dayton, Ohio, for trustee, George W. Ledford.
John A. Smalley, Dayton, Ohio, for State Farm.
David P. Strub, Dayton, Ohio, for debtor.
John Tiedge, Dayton, Ohio, pro se, and for Timothy Kelhoffer.
Eugene Robinson, Dayton, Ohio, for John Tiedge.
DECISION ON ORDER DENYING MOTION FOR PROTECTIVE ORDER AND ORDERING OTHER MATTERS
THOMAS F. WALDRON, Bankruptcy Judge.
This proceeding, which arises in a case referred to this court by the Standing Order of Reference entered in this district on July 30, 1984, is determined to be a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(A), (B), and (O).
The specific issues before the court are presented by the defendants' State Farm Fire and Casualty Company's and State Farm Mutual Automobile Insurance Company's Motion For Protective Order (Doc. 62) and the Response Of Plaintiff, George W. Ledford, Chapter 13 Trustee, To Motion For Protective Order Filed January 3, 1991; Motion For Award Of Expenses In Connection With Determination Of Motion (Doc. 63).
BACKGROUND
The court notes that this proceeding celebrated its first anniversary on this court's docket on November 15, 1990; and, although this file is filled with pleadings, amended pleadings, and various motions requesting sanctions by one party against
another, all of which have required intervention by this court (Docs. 12, 15, 16, 45, 47, 48, 57, 58), little, if any, progress seems to have been made toward a resolution of the merits of the plaintiffs' complaint and the defendants' answers. As this court noted (Doc. 15) more than a year ago,
The present issues continue to evidence this form of procedural fencing in which one or the other party strikes a blow ranging from merely irritating to financially menacing, which, at best, exhausts or enrages an opponent without resulting in significantly advancing the resolution of the issues presented. However, this is not to suggest that the discovery process is not integral to present day trial proceedings. Acknowledging the importance of the discovery process is not inconsistent with recognizing and rejecting abuse in the discovery process.
Despite the continual appearance of deviations, the discovery process is contemplated to be self-executing by counsel and not a process which requires repeated court intervention or supervision. It contemplates counsels' cooperation from commencement to conclusion in order to realize the underlying purpose of discovery--mutual pretrial disclosure of non-privileged relevant facts and information to prevent surprise and enhance trial presentation or settlement. In order to achieve this purpose, discovery cannot constantly be crippled by increased litigation costs, particularly in the insolvency context of a bankruptcy proceeding.
The significance accorded the rules governing discovery is apparent in the extreme sanctions courts have been authorized to enter for a party's failure to properly participate in the discovery process. Although courts must evaluate a number of factors in determining whether to impose sanctions for a failure to comply with discovery orders, see Regional Refuse Systems v. Inland Reclamation Co., 842 F.2d 150, 154-55 (6th Cir.1988), in appropriate circumstances, the sanctions can include not only the dismissal of a proceeding, but also the entry of a default judgment against a party. Bank One of Cleveland, N.A. v. Abbe, 916 F.2d 1067, 1073 (6th Cir.1990).
ARGUMENTS OF THE PARTIES
The Motion For Protective Order (Doc. 62) states:
The motion is accompanied by a copy of the Plaintiffs' Second Request For Production Of Documents Propounded To Defendants, State Farm Fire & Casualty Co., And State Farm Mutual Automobile Insurance Co. and an Affidavit of John T. Ducker, counsel for the defendants. The affidavit provides in relevant part:
The plaintiffs' response (Doc. 63) argues that (1) the State Farm entities have failed to procedurally comply with LBR 5.7(a) and (e) respecting motions related to discovery procedures, (2) the movants may not require the plaintiffs to proceed in discovery by oral deposition to the exclusion of any other discovery method, including requests for production of documents, and (3) the State Farm entities assert no basis in fact for their contention that the requested discovery is an annoyance and expensive burden to them.
APPLICABLE LEGAL PRINCIPLES
The court begins its analysis with the text of the governing rule. Bankruptcy Rule 7026, which applies in adversary proceedings, reads in relevant part:
It is axiomatic that the Federal Rules of Civil Procedure authorize extremely broad discovery. United States v. Leggett & Platt, Inc., 542 F.2d 655, 657 (6th Cir.1976), cert. denied, 430 U.S. 945, 97 S.Ct. 1579, 51 L.Ed.2d 792 (1977); In re Reading Tube Corp., 73 B.R. 99, 100-01 (Bankr.E.D.Pa.1987). Accord Hickman v. Taylor, 329 U.S. 495, 507, 67 S.Ct. 385, 391, 91 L.Ed. 451 (1947).
As this court noted in an unpublished decision In re Lee Way Holding Co., Case No. 2-85-00661, Adversary No. 2-86-0175, (S.D.Ohio Nov. 30, 1988):
Id. at 18-19.
Additionally, the burden to establish good cause for the issuance of a protective order is on the movants. As the court held in Johnston Dev. Group v. Carpenters Local 1578, 130 F.R.D. 348, 352 (D.N.J.1990):
... Rule 26(c) places the burden of persuasion on the party seeking the protective order. To overcome the presumption [in favor of discovery], the party seeking the protective order must show good cause by demonstrating particular need for protection. Broad allegations of harm unsubstantiated by specific examples or articulated reasoning, do not satisfy the Rule 26(c) test.
See also 4 Moore's Federal Practice, paras. 26.67-69, pp. 425-47 (2d Ed.1989).
Against these general principals, the court examines the specific discovery sought and the motion for a protective order. Although the plaintiffs' various claims appear in more detail in other filings in this proceeding, the amended complaint alleges, among other causes of action, that one of the debtor's creditors issued a garnishment pursuant to state law upon funds due the debtor from the entity State Farm Mutual Automobile Insurance Company; however, it was the entity State Farm Fire & Casualty Company which paid funds pursuant to the garnishment order. The complaint further alleges that funds belonging
to the debtor continue to remain with State Farm Mutual Automobile Insurance Company and are, pursuant to various provisions of the Bankruptcy Code, recoverable by the debtor's estate, from some or all of the defendants, to pay creditors in this chapter 13 case.
It may well be that the defendants' position is correct, and the trustee's allegations are without merit; or, the opposite may turn out to be correct, and the trustee will prevail. Whatever the resolution of this litigation, dragging out the time, or complicating the procedures in the discovery process, delays, rather than hastens, the resolution of this proceeding. The court has reviewed the thirteen items contained in the Plaintiffs' Second Request For Production Of Documents, and determines that all of the documents sought are relevant or reasonably calculated to lead to the discovery of relevant information.
With regard to the specific claims raised by the Motion For Protective Order (Doc. 62), the court notes that the plaintiffs' response correctly points out that the motion for protective order fails to comply with the Local Rules of this district concerning motions related to discovery procedures. The applicable Local Bankruptcy Rules for the United States Bankruptcy Court for the Southern District of Ohio provide, in relevant part:
Noticeably absent from the movant's affidavit is any statement concerning "meeting in person with opposing counsel" or "offering in writing to meet in person with opposing counsel on one or more specific dates". As the United States District Court for the Southern District of Florida stated in construing its Local Rules containing a similar provision regarding counsel's duty to meet and attempt to resolve discovery disputes,
Republic of Haiti v. Crown Charters, Inc., 667 F.Supp. 839, 849-50 (S.D.Fla.1987).
Although the court finds that the defendants' failure to comply with the requirements set forth in LBR 5.7(e) is a fatal defect and provides a basis for the dismissal of the motion, in an attempt to prevent any further litigation of these issues, the court additionally finds that the other reasons advanced in the defendants' motion fail to provide a basis to sustain the motion.
Page 794.
As noted previously, in connection with motions for protective orders, it is the movant's burden to sufficiently demonstrate specific objections to the proposed discovery. Johnston Dev. Group, 130 F.R.D. at 352. The defendants' motion contains only unsubstantiated allegations of "annoyance and expensive burden" and does not provide either the specific examples or the articulated reasoning necessary to satisfy the requirements for the issuance of a protective order. Nor can the movants' mere reference to the existence of a public document be automatically converted into an impenetrable shield protecting the movant from subsequently presenting it pursuant to the plaintiffs' discovery request, particularly in a situation where the document was originally generated and filed by the movant. Panola Land Buyers Ass'n v. Shuman, 762 F.2d 1550, 1558-59 (11th Cir.1985); Lehnert v. Ferris Faculty Ass'n--MEA-NEA, 556 F.Supp. 316, 318-19 (W.D.Mich.1983). See also 4 Moore's Federal Practice, para. 26.59, p. 184 (2d Ed.1989) (cases collected at fn. 7). Accord Biben v. Card, 119 F.R.D. 421, 429 (W.D.Mo.1987).
Accordingly, the defendants' Motion For Protective Order (Doc. 62) is DENIED.
Further, the plaintiffs and the defendants shall at a mutually convenient time, but not later than February 20, 1991, complete compliance with Plaintiffs' Second Request For Production Of Documents Propounded To Defendants, State Farm Fire & Casualty Co., And State Farm Mutual Automobile Insurance Co.
The court has by separate orders set a hearing on the plaintiffs' request for sanctions and a pretrial conference to establish a time schedule and a cut-off date for discovery, and to enter further orders governing the future course of this proceeding.
Orders in accordance with this decision are simultaneously entered.
SO ORDERED.