Dietz v. Beckman, Weil, Shepardson, LLC
Dietz v. Beckman, Weil, Shepardson, LLC
2010 WL 11629653 (S.D. Ohio 2010)
June 8, 2010

Ovington, Sharon L.,  United States Magistrate Judge

Waiver
Cost Recovery
Attorney-Client Privilege
Failure to Produce
Attorney Work-Product
Proportionality
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Summary
The court granted Plaintiffs' Motion to Compel, ordering Defendants to produce all responsive documents, including emails, text messages, memos, voice mail messages, and other inter-office communications. The court also ordered Defendants to file an Amended Answer to Plaintiffs' Requests for Admission and pay Plaintiffs' reasonable attorney fees and costs incurred in bringing the motion.
Blaise DIETZ, et al., Plaintiffs,
v.
BECKMAN, WEIL, SHEPARDSON, LLC, et al., Defendants
Case No. 3:09cv00327
United States District Court, S.D. Ohio, Western Division, at Dayton
Signed June 08, 2010

Counsel

David Philip Pierce, Coolidge Wall Co., L.P.A., Dayton, OH, Matthew L. Turner, Pro Hac Vice, Turner & Turner, PC, Southfield, MI, for Plaintiffs.
Kenneth Roger Schoeni, Kimberly Ann Kyle, Kohnen & Patton, Cincinnati, OH, for Defendants.
Ovington, Sharon L., United States Magistrate Judge

DECISION AND ORDER

I. Introduction
*1 Plaintiffs Blaise Dietz and Target Financial Group, LLC bring the present case claiming that their former attorneys committed legal malpractice while representing them in a prior underlying case. Defendants answered and set forth their counterclaim for unpaid fees. The underlying case began in the Montgomery County, Ohio Court of Common Pleas and was later removed to this Court, ITS Financial, LLC v. Blaise Dietz, et al., 3:08cv00328 (Merz, M.J.) – more later on the underlying case.
Defendants in the present case are the law firm of Beckman, Weil, Shepardson, LLC, an Ohio limited liability company, and attorneys Brian Redden, Kristen Myers, Brian Dershaw, each of whom are licensed to practice law in the State of Ohio. See Doc. #s 1, 9.
This case is before the Court upon Plaintiffs' Motion to Compel Discovery (Doc. #16), Defendants' Memorandum in Opposition (Doc. #17), Plaintiffs' Reply (Doc. #19), and the record as a whole. The Court previously held a hearing during which the parties' respective counsel presented oral arguments.
II. Background[1]
Blaise Dietz, a resident of Michigan, formerly worked as an independent contractor for ITS Financial, LLC. Their business relationship required Dietz to search for, find, and screen prospective franchisees for ITS Financial in exchange for ITS Financial’s agreement to pay commissions to Dietz. (Doc. #2 at 76-77).[2] In May 2008 Dietz resigned from this business relationship to pursue other business opportunities including, at least in part, opportunities with Target Financial.
Dietz obtained legal representation from attorneys in Michigan to make certain “that none of [his] actions in furtherance of Target’s business interests were in violation of paragraph 5 of the franchise broker agreement that Dietz [had] signed with ITS.” (Doc. #2 at 77-78). Paragraph 5 documented the terms of the Dietz/ITS Financial non-compete agreement. (Doc. #2 at 77, 92-93 (Exhibit 2) ).
In or near August 2008 the litigation underlying the present case began when ITS Financial filed a Complaint against Dietz in the Montgomery County, Ohio Court of Common Pleas claiming that Dietz had violated the terms of the non-compete agreement. ITS Financial obtained an ex-parte temporary restraining order in the underlying case, which precluded Dietz from engaging in certain business activities. (Doc. #2 at 76-77, 87-88 (Exhibit 1) ).
When Dietz learned about the case, he contacted his Michigan attorneys, who referred him to the law firm of Beckman, Weil, Sherpardson, LLC located in Cincinnati, Ohio. In or near September 2008 Beckman, Weil, Sherpardson LLC agreed to represent Dietz in the underlying litigation.
During the time when the TRO was in effect, Dietz obtained legal advice – particularly from attorney Redden – concerning whether the TRO in the underlying litigation would be violated if Dietz obtained a significant ownership interest in Target Financial. Attorney Redden advised Dietz that “he saw no reason to refuse ...” the assignment to Dietz of a significant interest in Target Financial. (Doc. #2 at ¶ 26). Based on this legal advice, Dietz accepted the assignment and obtained an ownership interest in Target Financial. This created more problems for Dietz in the underlying litigation since it led to contempt proceedings concerning whether he had violated the TRO.
*2 Plaintiffs allege in the present case, “During the [contempt] hearing it became clear to all involved ... that the court was going to find Dietz in contempt” of the TRO. (Doc. #2 at 81-82). The parties in the underlying litigation eventually settled their dispute, although, according to Dietz, on the advice of his attorneys and on terms “very unfavorable” to him. (Doc. #2 at 82).
In the present case, Dietz asserts that his attorneys in the underlying litigation committed legal malpractice, in part, because they should have known that obtaining an ownership interest in Target Financial – as recommended by attorney Redden – would violate the TRO.
III. Discussion
The parties' present discovery dispute originally focused on Defendants' responses to Plaintiffs' Interrogatories, their Requests for Production of Documents, and their Requests for Admission. The parties resolved their dispute over the Interrogatories, but have not resolved their dispute over Plaintiff’s Requests for Production of Documents and Requests for Admissions.
A. Plaintiffs' Document Requests
Rule 34 of the Federal Rules of Civil Procedure governs Requests for Production of Documents as follows:
A party may serve on any other party a request within the scope of Rule 26(b):
(1) to produce and permit the requesting party or its representatives to inspect, copy, test, or sample the following items in the responding party’s possession, custody, or control:
(A) any designated documents or electronically stored information – including writings, drawings, graphs, charts, photographs, sound recordings, images, and other data or data compilations - stored in any medium from which information can be obtained either directly or, if necessary, after translation by the responding party into a reasonably usable form; or
(B) any designated tangible things....
Fed. R. Civ. P. 34(a) (West 2010).
Plaintiffs mainly seek documents relating to the underlying litigation.[3]
*3 Defendants object to the requests for production based on the attorney-client privilege and the work product doctrine. Defendants also contend that Plaintiffs' Requests are overly broad and unduly burdensome. And Defendants argue that producing the documents is unwarranted because the documents are subject to a retaining lien.
1.
Attorney-Client Privilege[4]
The attorney-client privilege applies “where legal advice of any kind is sought from a professional legal advisor in his capacity as such, the communications relevant to that purpose, made in confidence by the client, are at his instance permanently protected from disclosure by himself or by the legal advisor except the protection be waived.” Wonneman v. Stratford Secs. Co., 23 F.R.D. 281, 285 (S.D.N.Y. 1959).
“The rule which forbids an attorney from divulging matters communicated to him by his client in the course of professional employment is for the benefit of the client.” Cooper v. United States, 5 F.2d 824, 825 (1925). However, this privilege is deemed to be “waived when a client sues his or her attorney for malpractice.” Bieter Co. v. Blomquist, 156 F.R.D. 173, 176 (D. Minn. 1994).
In the present case, although Defendant attorneys rely on the attorney-client privilege, the privilege belongs to Plaintiffs – Defendants' former clients – and Plaintiffs have waived their privilege by suing Defendants for legal malpractice. See Cooper, 5 F.2d at 825; see also Bieter, 156 F.R.D. at 176. Therefore, Defendants' reliance on the attorney-client privilege is misplaced.
2.
The Work Product Doctrine
Defendants contend that the work product doctrine permits them to withhold the documents Plaintiffs seek.
The work product doctrine is set forth in Fed. R. Civ. P. 26(b)(3), which provides: “a party may not discover documents and tangible things that are prepared in anticipation of litigation or for trial by or for another party or its representative.”
Like the attorney client privilege, the work product doctrine can be waived. See Equitable Production Co. v. Elk Run Coal Co., Inc., 2008 WL 5263735 *3 (S.D.W. Va. 2008). This occurs when a plaintiff “assert[s] a claim ... that puts purportedly protected information in issue.” Id. This is the exact situation created by Plaintiffs' act of bringing their present legal malpractice case against Defendants. Consequently, although the documents Plaintiffs seek were likely prepared in anticipation of, and involvement in, the underlying litigation – including the contempt proceedings concerning whether Dietz violated the TRO – Plaintiffs have placed the contents of such documents at issue in the present case through their legal malpractice claim and their supporting allegations.
Accordingly, Defendants' reliance on the work product doctrine is misplaced.
3.
Overbroad and Unduly Burdensome
A request for production is overbroad “where it seeks ‘any and all documents’ and provides no meaningful limitations.” Richmond v. UPS Service Parts Logistics, 2002 WL 745588 at *4 (S.D. Ind. 2002). Production can be considered unduly burdensome “in terms of time, money, [or] procedure required to produce the requested documents.” G.D. v. Monarch Plastic Surgery, P.A., 2007 WL 201150 at *2 (D. Kan. 2007). However, “[d]iscovery should be allowed unless the hardship is unreasonable in light of the benefits to be secured from the discovery.” Id.
*4 Here, Plaintiffs seek specific categories of documents that Defendants might have created during the course of their legal representation in the underlying litigation, which lasted about five months. Given this relatively short period of time, it is unlikely that the number of documents Defendants created were so many to make their production unduly burdensome in terms of time or money or the procedure necessary for production.
In addition, Plaintiffs' document requests seek information about issues relevant to whether or not Defendants committed legal malpractice in their representation of Dietz and Target Financial during the underlying litigation. Plaintiffs' requests, moreover, are focused on documents likely to contain such information and are, consequently, reasonably calculated to lead to the discovery of admissible evidence. See supra, n. 2. Since such requests seek documents that are relevant for discovery purposes, see Fed. R. Civ. P. 26(b)(1), requiring their production will not place an undue burden on Defendants in light of the benefits of production.
Accordingly, Plaintiffs' Requests for Production are neither overbroad nor unduly burdensome to the extent Defendants possess the requested discovery. Defendants shall produce all documents requested to the extent they still possess them including memos, emails, notes, letters, text messages, drafts, other communications, research documents, cases reviewed, and research trails.
4.
Retaining Lien
Defendants originally object to Plaintiffs' Requests for Production of the attorney’s files based on the existence of a retaining lien. Counsel recently informed the Court that this issue is moot and that responsive files will be produced.
B. Plaintiffs' Requests for Admission
Rule 36 of the Federal Rules of Civil Procedure governs a party’s Requests for Admission. Rule 36 describes the scope of such requests as follows:
A party may serve on any other party a written request to admit, for purposes of the pending action only, the truth of any matters within the scope of Rule 26(b)(1) relating to:
facts, the application of law to fact, or opinions about either....
Fed. R. Civ. P. 36(A) (West 2010). Answers and Objections to Requests for Production are subject to the following:
Answer. If a matter is not admitted, the answer must specifically deny it or state in detail why the answering party cannot truthfully admit or deny it.
Objections. The grounds for objecting to a request must be stated. A party must not object solely on the ground that the request presents a genuine issue for trial.
Fed. R. Civ. P. 36(a)(4), (5) (West 2010).
Plaintiffs' Requests for Admission 5, 6, 7, 16, and 19 are at issue.[5]Requests 5 and 6 relate to two separate Covenants Not to Compete from the underlying litigation. Requests 7, 16, and 19 relate to the TRO in the underlying litigation.
*5 Defendants' Answers to these Requests for Admission 5, 6, 7, 16, and 19 assert that each request is “argumentative and calls for a legal conclusion which was not litigated to a judicial determination in the underlying matter; therefore, Defendants can neither admit nor deny.” (Doc. #16-13). Defendants contend that their responses were adequate and appropriate. (Doc. # 17 at 1, 7).
The Plaintiffs' Requests for Admission seek information within the scope of Rule 36(a)(1)(A) as “facts, the application of law to fact, or opinions about either.” This is readily seen in the plain language of each request. See supra, n.3. Plaintiffs' request, moreover, are consistent with Rule 36’s goal of reducing trial time by allowing admissions which will “facilitate proof with respect to issues that cannot be eliminated from the case, and ... to narrow the issues by eliminating those that can be.” Fed. R. Civ. P. 36 advisory committee’s notes (1970 Amendment). See House v. Giant of Maryland LLC, 232 F.R.D. 257, 259 (E.D. Va. 2005).
Defendants' response – neither admitting nor denying the requests – is insufficient according to Rule 36(a)(5) because it states: “[a] party may not object solely on the ground that the request presents a genuine issue for trial.” See Campbell v. Spectrum Automation Co., 601 F.2d 246, 253 (6th Cir. 1979)(finding “[t]hat a request seeks admissions on ‘ultimate facts,’ or is dispositive of the entire case, is irrelevant.”).
In addition, Plaintiffs' Requests for Admission are proper as “Rule 36(a)expressly permits requests to encompass ‘any matters within the scope of Rule 26(b).’ ” Campbell, 601 F.2d at 253. Rule 26(b) generally allows for broad discovery of relevant information. Smith v. MCI Telecommunications Corp., 137 F.R.D. 25, 27 (D. Kan. 1991). Plaintiffs' Requests for Admission seek information concerning the legal advice Plaintiff received from Defendant in the underlying litigation which led to the claim for malpractice. Plaintiffs' requests therefore seek information relevant to Plaintiffs' claims and are reasonably calculated to lead to the discovery of admissible evidence. Plaintiffs' requests seek information within the scope of Rule 26(b) and must be answered.
Although Plaintiffs' requests might well be viewed calling for a legal conclusion, under precedent controlling in his District, such characteristics do not support Defendants' contention that their answers were sufficient. Campbell, 601 F.2d at 253. Therefore, Requests for Admission were proper, and the answers the Defendants provided were insufficient.
Accordingly, Plaintiffs' Motion to Compel further answers to their Requests for Admission 5, 6, 7, 16, and 19 is well taken.
C. Costs and Attorney Fees
Plaintiffs have requested costs and attorney fees associated with their Motion to Compel. (Doc. #16).
Defendants did not address the issue in their Memorandum in Opposition to Plaintiffs' Motion to Compel. (Doc. #17).
Rule 37(a)(5) governs payment of expenses when a motion to compel is granted. Rule 37(a)(5) provides:
If the motion is granted ... the court must ... require the party or deponent whose conduct necessitated the motion, the party or attorney advising that conduct, or both to pay the movant’s reasonable expenses incurred in making the motion, including attorney’s fees. But the court must not order this payment if:
(i) the movant filed the motion before attempting in good faith to obtain the disclosure or discovery without court action;
*6 (ii) the opposing party’s nondisclosure, response, or objection was substantially justified; or
(iii) other circumstances make an award of expenses unjust.
For the reasons set forth above, supra, § III, each of Defendants' objections – the attorney client privilege, the work product doctrine, and the assertion that Plaintiffs' discovery requests were overly broad and unduly burdensome – was not substantially justified; therefore sanctions of attorney fees and costs are proper. See Fed. R. Civ. P. 37(a)(5).
IT IS THEREFORE ORDERED THAT:
1. Plaintiffs' Motion to Compel (Doc. # 16) is GRANTED;
2. On or before July 6, 2010, Defendants shall produce to Plaintiffs' counsel all responsive documents to the extent the Defendants still possess responsive documents;
3. On or before July 6, 2010, Defendants shall file an Amended Answer to Plaintiffs' Requests for Admission 5, 6, 7, 16, and 19;
4. Plaintiffs' request for sanctions (Doc. # 16 at 19) is GRANTED as to the sanction of reasonable attorney fees and costs incurred in bringing their Motion to Compel;
5. On or before July 6, 2010, Plaintiffs' counsel shall file a Memorandum with supporting documentation setting forth the amount of reasonable attorney fees Plaintiffs incurred in bringing their Motion to Compel;
6. On or before July 20, 2010, Defendants may, if they wish, file a Memorandum in Opposition to the amount of Plaintiffs' reasonable attorney fees and costs.

The facts as set forth in this section are based on the Plaintiffs' Complaint.
Citations to page numbers in documents of record refer to the page numbers assigned by the Court’s case management electronic case filing system.
Documents requested include:
1. The complete representation file;
2. E-mails sent or received by any of the Defendants or any agent, employee, or contractor of the Defendant law firm requests for admission;
3. Paper or electronically stored memos or drafts of memos regarding legal research performed;
4. Any paper or electronically stored communications between any Defendant and any other employee of the Defendant Law Firm whether e-mails, text messages, memos, voice mail messages, or other inter-office communications;
5. Communications between Plaintiff and any Defendant or any employee or agent of the Defendant law firm in the form of notes, memos, other documents, tape recordings, or other electronically stored information which memorialize telephone conversations;
6. Legal research, including cases reviewed and research trails;
7. Rough drafts of any briefs filed with the court;
8. Drafts of any letters, e-mails, text messages, or other communications that were for the purpose of potentially sending to Plaintiff but were not actually sent.
9. Documents relating to analyzing the breadth and/or scope of the temporary restraining order.
10. Communications between Defendants, employees, or agents of Defendant law firm and Plaintiff concerning what actions he could undertake, if any, on behalf of Target Financial Group or Target Tax Preparation while the temporary restraining order was in effect.
11. Any communication whether by letter, fax, e-mail, voice message, or any other medium between Defendants and the attorneys for ITS Financial, LLC in the underlying litigation.
12. Any memos, research documents, notes, e-mails, opinion letters, and preliminary drafts of such items analyzing whether Target Financial Group was in competition with ITS Financial, LLC.
13. Any documents that Defendants intend to introduce into evidence, reference or rely upon at any deposition, or use in support of any motion in this case, or which support the affirmative defenses pled by the Defendant.
Plaintiffs are not seeking the current file between Defendants and their counsel. This issue was settled during the Hearing on the Motion to Compel.
Plaintiffs' Requests for Admission 5, 6, 7, 16, and 19.
5. Do you admit that Dietz’s actions between September 2, 2008, and February 16, 2009, did not violate the terms of the Covenants Not to Compete found in section 5 of the Franchise Broker Agreement.
6. Do you admit that Dietz’s actions between September 2, 2008, and February 16, 2009, did not violate the terms of the Covenants Not to Compete found in the Instant Tax Service (ITS) Franchise Agreement.
7. Do you admit that Dietz’s actions between September 2, 2008, and February 16, 2009, were in violation of the TRO entered by the Court of Common Pleas and continued by the Federal District Court.
16. Do you admit that prior to Wednesday, October 15, 2008, Dietz had not violated the TRO originally entered by the Court of Common Pleas and continued by the Federal District Court.
19. Do you admit that Dietz’s actions of opening a bank account on behalf of Target Financial and moving forward with business operations was in violation of the TRO initially entered by the Court of Common Pleas and continued by the Federal District Court.