Opinion
Civil Action No. 1:05-cv-0633-GET.
August 2, 2006
ORDER
The above-styled matter is presently before the court on:
1) plaintiff's motion to compel [docket no. 40];
2) plaintiff's motion to compel [docket no. 50].
Plaintiff filed the instant action in the State Court of Fulton County, asserting claims for malpractice, breach of contract, and breach of fiduciary duty allegedly sustained when defendants represented plaintiff in a previous lawsuit ("the Omega litigation"). On March 8, 2005, defendants removed the lawsuit on the basis of diversity jurisdiction, pursuant to 28 U.S.C. §§ 1332, 1441. On March 10, 2005, defendants filed a motion to dismiss for lack of personal jurisdiction and venue, or in the alternative to transfer this case to the Central District of California. On July 19, 2005, this court issued an order denying defendants' motion to dismiss or, in the alternative, transfer as to defendants Krongold and Palin, but dismissed defendant Thompson for lack of subject matter jurisdiction. On April 28, 2006, plaintiff filed a motion to compel documents pursuant to third party subpoenas issued to respondents, including Omega Research and Development, Inc. ("Omega"), the defendant in the Omega litigation. On June 27, 2006, pplaintiff filed a motion to compel documents from defendants.
Motion to Compel v. Respondents
Plaintiff seeks to enforce third party subpoenas that seek the production of certain financial information from respondents. Respondents objected to each request as overly broad; unduly burdensome; irrelevant; protected by either right of privacy, trade secrets or confidentiality agreements; seeking documents not within respondents' possession and already within plaintiff's possession; insufficient notice; vague and ambiguous. After attempting to resolve the matter among counsel, plaintiff filed the instant motion. In the objections to the third party subpoenas, defendants fail to explain the basis for their objections with sufficient specificity to enable the court to determine whether the objections are valid. See Panola Land Buyers Ass'n v. Shuman, 762 F.2d 1550, 1559 (11th Cir. 1985). Accordingly, the court will consider only the objections raised in defendants' response to the motion to compel.
In order to prevail on its claim for legal malpractice, plaintiff must show that it would have received judgment in the Omega lawsuit and that the judgment would have been collectible.Allen Decorating, Inc. v. Oxendine, 225 Ga. App. 84, 88 (1997). Plaintiff asserts that the subpoenas at issue in the instant matter seek financial information pertaining to whether a judgment against Omega in the Omega litigation would have been collectible. Because Omega was nearing bankruptcy, plaintiff also seeks documents from which it can show that it could have pierced the corporate veil between Omega and the other respondents, and collected the judgment from the additional respondents. See Multi-Media Holdings, Inc. v. Piedmont Center, 15 LLC, 262 Ga. App. 283 (2003) (if there is sufficient unity of interest and ownership, piercing the corporate veil permits recovery from entities related to defendant).
In general, parties "may obtain discovery regarding any matter, not privileged, that is relevant to the existing claim or defense of any party." Fed.R.Civ.P. 26(b)(1) Omega's financial information is clearly related to plaintiff's ability to show that it could have collected a judgment in the Omega litigation. As to respondents Mr. and Ms. Flick, financial documentation from Omega that was produced during discovery in the Omega litigation shows the exchange of money between Omega, Mr. Flick, and another corporation owned by Mr. Flick. Further, documents produced pursuant to plaintiff's subpoena of defendant's expert witness show that Ken Flick is the sole shareholder of Omega. Moreover, the documents provided from the expert witness were relied upon to determine the value of the judgment that could have been obtained against Omega, demonstrating the relevance of such information. Accordingly, plaintiff has shown some basis for its theory that it might be able to pierce the corporate veil. Although respondents contend that their financial transactions are unrelated to the malpractice action before this court or Omega's ability to pay a judgment in the Omega litigation, the court finds that the documents sought from Omega and the dicks are relevant to the element of plaintiff's malpractice claim requiring it to show that a judgment could have been collected. However, plaintiff has not shown that Omega shares any ownership or is otherwise related to Omega Patents or J.F. Finance Corp. apart from Ken and Roxana Flick. Accordingly, there is no need for Omega Patents and J.F. Finance Corp. to produce the requested documents until such time, if any, as plaintiff has pierced the corporate veil between Omega and the Flicks. Further, because the Flicks link Omega with Omega Patents and J.F. Finance, the information from the Flicks should reveal any link between Omega and Omega Patents or J.F. Finance that would enable plaintiff to pierce the corporate veil between the companies.
Further, the subpoenaed parties state several objections to the subpoenas. Because the court is not granting the motion to compel as to Omega Patents and J.F. Finance, the court will discuss the objections with respect to Omega and the Flicks only. First, Omega and the Flicks contend that plaintiff's requests are overly broad because they seek documents from 1997 through the present, though the Omega litigation was settled on December 10, 2002. They contend that plaintiff's claims must be determined by the law and facts at the time of the alleged misconduct. See Rapid Group, znc. v. Yellow Cab of Columbus Inc., 253 Ga. App. 43 (2001) (law attorney should have asserted was that which was in place at the time of the alleged malpractice). Omega and the Flicks reason, therefore, that only documents from the time of the litigation, 2001-2002, are relevant. However, plaintiff is seeking information to determine the ability to pay a judgment, which does not end with the entry of judgment in the case. Plaintiff must show that Omega could pay some amount of judgment in order to sustain its claim. Oxendine, 225 Ga. App. at 88. Accordingly, plaintiff is entitled to financial information from Omega from the prior lawsuit through the present. Further, plaintiff is entitled to the Flicks' financial information to show that it could have pierced the corporate veil between the Flicks and Omega in the underlying lawsuit. Because the inquiry is limited to the time frame of the underlying lawsuit, the Flicks must only produce their financial information from 2001-2002.
Secondly, Omega and the Flicks object that plaintiff's requests are vague and ambiguous, because they seek "all stock certificates" in and promissory notes "from or to" various corporations without specifying the holder or owner. Omega and the Flicks' primary concern appears to be that the demand could include every stock certificate issued by Omega Patents and J.F. Finance to each and every shareholder. Plaintiff represents that the only subpoenas seeking stock certificates and promissory notes are those issued to Ken and Roxana Flick. Plaintiff explains that it seeks certificates and notes held by, or within the custody or control of, the subpoenaed party for the company identified in the request. Accordingly, plaintiff's request is limited to the subpoenas issued to Ken and Roxana Flick for all stock certificates and promissory notes requested that are held by or in the custody or control of Ken or Roxana Flick, unless otherwise specified therein.
Thirdly, Omega and the Flicks argue that the documents requested are protected by the right to privacy or are trade secrets and confidential information. Neither Omega nor the Flicks specifically identify the types of information they seek to protect, or why the information would be a trade secret. Further, neither provided a privilege log to plaintiff. Finally, plaintiff has offered to enter into a protective order to keep the documents produced confidential. Accordingly, Omega and the Flicks have stated insufficient grounds to escape their obligation to produce the requested documents. However, in light of legitimate privacy concerns for private financial information, as well as plaintiff's agreement to provide a confidentiality order, all documents produced pursuant to these subpoenas are subject to plaintiff's execution of a reasonable confidentiality agreement.
Finally, Omega and the Flicks object that they had insufficient time to comply with the subpoenas because they were given at most fourteen (14) days to respond, including weekends. After reviewing the subpoenas, the court finds that fourteen days was insufficient. Omega, Ken and Roxana Flick are therefore DIRECTED to comply with plaintiff's subpoena requests within thirty (30) days of the date of this order. The court will entertain a request for an extension of time if respondents show a reasonable need for additional time. Accordingly, and for all the aforementioned reasons, plaintiff's motion to compel [docket no. 401 is hereby GRANTED in part, DENTED in part. The motion is DENIED as to Omega Patents and J.F. Finance Corp. It is GRANTED as to Omega, Ken Flick and Roxana Flick, subject to plaintiff's execution of a reasonable confidentiality agreement. The production from Omega is limited to information from the years 2001 — present. The production from Ken and Roxana Flick is limited to the years 2001 and 2002, with the subpoena requests for stock certificates and promissory notes limited to stocks and notes held by or in the custody or control of the subpoenaed party, unless otherwise specified therein. Omega, Ken and Roxana Flick are DIRECTED to comply with plaintiff's subpoena requests within thirty (30) days of the date of this order. The court will entertain a request for an extension of time if respondents show a reasonable need for additional time.
Plaintiff also requests attorney's fees incurred in bringing the motion to compel. Rule 37 requires the court to award the reasonable expenses in making the motion to compel if the motion is granted, unless the opposing party's nondisclosure, response., or objection was substantially justified, or other circumstances make the award unjust. Fed.R.Civ.P. 37(4)(a). Because the court found that two of the subpoenaed parties need not respond, and limited the requests issued to the remaining parties, the court finds that an award of attorney's fees would be unjust.
Motion to Compel v. Defendants
Plaintiff seeks to compel the production of documents in response to a request for production of documents it served on defendants at the time it filed its complaint. Plaintiff contends that defendants have not fully responded to their requests seeking: (1) documents relating to work performed on behalf of plaintiff in the underlying lawsuit; (2) documents relating to communications between defendants and any other person employed by or associated with the law firm of Arter Hadden relating to the representation of plaintiff. Defendants worked at Arter Hadden when representing plaintiff. On August 15, 2006, defendants objected to the requests on the grounds of attorney-client privilege and the work product doctrine. However, they stated that they had already provided plaintiffs with all non-privileged responsive documents by mailing plaintiff its file. On February 10, 2006, Mr. Thompson revealed in his deposition that he had removed documents from the file that were created after Arter Hadden withdrew as counsel in the underlying litigation. Plaintiff's counsel requested a privilege log.
Although the initial log listed ninety-five documents, the parties have come to an agreement concerning the production of all but two. Both are memoranda produced after defendants' motion to withdraw was granted. Defendants argue that both were created because defendants anticipated litigation in light of plaintiff's dissatisfaction with the settlement, and are therefore protected by the work product doctrine. Further, defendants argue that the attorney-client privilege applies because the firm was acting as defendants' attorney. Plaintiff responds that the memoranda were created as part of defendants' work for plaintiff, so neither the attorney-client privilege nor work product doctrine apply.
The attorney-client privilege protects the disclosures that a client makes to his attorney, in confidence, for the purpose of securing legal advice or assistance. Cox v. Administrator U.S. Steel Carnegie, 17 F. 3d 1386, 1441 (11th Cir. 1994). "The work product doctrine pertains to materials prepared by an attorney in preparation for litigation." Sivey v. Zant, 683 F.2d 881, 885 (11th Cir. 1982). It does not apply to documents or other tangible things sought by the client that his attorney created or amassed during representation of that client. Id. Further, "the only matters protected from disclosure. are the mental impressions, conclusions, opinions or legal theories of an attorney or other representative of a party concerning the litigation." id. Plaintiff contends that the work product doctrine and attorney-client privilege do not apply because the documents were not created by individuals acting as attorneys for defendants in anticipation of litigation against plaintiff. Further, plaintiff contends that the documents are not work product because they do not contain mental impressions, conclusions, opinions or legal theories. Finally, plaintiff argues that even if the work product doctrine applied, the documents are discoverable.
"When a party withholds information otherwise discoverable under these rules by claiming it is privileged or subject to protection as trial preparation material, the party shall make the claim expressly and shall describe the nature of the documents, communications, or things not produced or disclosed in a manner that, without revealing information itself privileged or protected, will enable other parties to assess the applicability of the privilege or protection." Fed.R.Civ.P. 26(b)(5). Plaintiff first argues that the work product doctrine and attorney-client privilege do not apply because the documents were created during defendants' representation of plaintiff, not Arter Hadden's representation of defendants in preparation for the instant malpractice suit.
The first document at issue is described on the privilege log as a memorandum dated January 30, 2003, from Mr. Son to defendants and Mr. Thompson, summarizing Mr. Son's communications with plaintiff. Mr. Son aided defendants in their representation of plaintiff, and was working for Arter Hadden at the time he created the memo. Defendants explain that an email, which was produced to plaintiff, discusses having Mr. Son prepare a memorandum and indicates that Arter Hadden and defendants anticipated litigation due to plaintiff's dissatisfaction with the settlement. The other document at issue is a memorandum dated December 27, 2002, from defendant Palm to Mr. Cornet and Mr. Solomon, part of the management of Arter Hadden, discussing the settlement in the Omega litigation. Defendants inform the court that the memo discusses the dealings between Arter Hadden and plaintiff, the acts that occurred around the time of defendants' negotiation of the settlement, and the settlement negotiations.
Defendants have provided the court with insufficient information to enable it to determine whether Mr. Son and Mr. Palin, who both admittedly participated in the representation of plaintiff in the omega litigation, prepared the memoranda at issue as attorneys for defendants in anticipation of the instant litigation. Thus, defendants have not "describe[d] the nature of the documents not produced or disclosed in a manner that. enable[s] other parties to assess the applicability of the privilege or protection." Fed.R.Civ.P. 26(b)(5) Defendants admit that the documents contain summaries of communications and events surrounding the settlement of the Omega litigation. The content of the summaries is as relevant to litigation of plaintiff's claims against Omega as it is to plaintiff's claims against defendants. Further, the documents were placed in defendants' file concerning the Omega litigation, not a separate file concerning plaintiff's potential action against defendants. Accordingly, plaintiff has not shown that the documents contain work product. Because defendants cannot show that defendant Palin or Mr. Son were acting an behalf of defendants rather than wrapping up work on behalf of plaintiff, defendants have not shown that the documents are protected by the attorney-client privilege.
Plaintiff's motion to compel [docket no. 50] is therefore GRANTED. Pursuant to Fed.R.Civ.P. 37(a)(4)(A), plaintiff is also entitled to reasonable costs and attorney's fees incurred in bringing the instant motion.
Summary
1) Plaintiff's motion to compel [docket no. 40] is hereby GRANTED in part, DENIED in part. The motion is DENIED as to Omega Patents and J.F. Finance Corp. It is GRANTED as to Omega, Ken Flick and Roxana Flick, subject to plaintiff's execution of a reasonable confidentiality agreement. The production from Omega is limited to information from the years 2001 — present. The production from Ken and Roxana Flick is limited to the years 2001 and 2002, with the subpoena requests for stock certificates and promissory notes limited to stocks and notes held by or in the custody or control of the subpoenaed party, unless otherwise specified therein. Omega, Ken and Roxana Flick are DIRECTED to comply with plaintiff's subpoena requests within thirty (30) days of the date of this order. The court will entertain a request for an extension of time if respondents show a reasonable need for additional time.2) plaintiff's motion to compel [docket no. 50] is GRANTED.
SO ORDERED.