Wyndham Vacation Ownership, Inc. v. Clapp Bus. Law, LLC
Wyndham Vacation Ownership, Inc. v. Clapp Bus. Law, LLC
2019 WL 9091664 (M.D. Fla. 2019)
October 31, 2019

Kelly, Gregory J.,  United States Magistrate Judge

Possession Custody Control
Sanctions
Failure to Produce
Cloud Computing
Manner of Production
Native Format
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Summary
The Plaintiffs requested documents in native format, access to a CRM platform, access to a Gmail account, and tax returns from the Defendants. The Court found that the Defendants failed to comply with the Order and recommended that they be held in contempt and ordered to pay the Plaintiffs' reasonable expenses, including attorney's fees, and a per diem fine for every day of noncompliance.
Additional Decisions
WYNDHAM VACATION OWNERSHIP, INC.; WYNDHAM VACATION RESORTS, INC.; WYNDHAM RESORT DEVELOPMENT CORPORATION; SHELL VACATIONS, LLC; SVC-HAWAII, LLC; SVC-WEST, LLC; and SVC-AMERICANA, LLC, Plaintiffs,
v.
CLAPP BUSINESS LAW, LLC; MARY CLAPP, ESQ.; THE TRANSFER GROUP, LLC; VACATION CONSULTING SERVICES, LLC; VCS COMMUNICATIONS, LLC; BRIAN SCROGGS; TRANSFER FOR YOU LLC; ALLIED SOLUTION GROUP, LLC; JJ MIDWEST MARKETING LLC; JJ&C MARKETING, LLC; THE MID-WEST TRANSFER, LLC; MIDWEST TRANSFERS LLC; JOSH UNGARO; REAL TRAVEL, LLC; and BART BOWE, Defendants
Case No. 6:19-cv-756-Orl-41GJK
United States District Court, M.D. Florida
Filed October 31, 2019
Kelly, Gregory J., United States Magistrate Judge

Report and Recommendation

*1 This cause came on for consideration without oral argument on the following motion:
MOTION: PLAINTIFFS’ MOTION FOR CONTEMPT AND SANCTIONS AGAINST DEFENDANTS ALLIED SOLUTION GROUP, LLC, JJ MIDWEST MARKETING LLC, JJ&C MARKETING LLC, THE MID-WEST TRANSFER LLC, MIDWEST TRANSFERS LLC, AND JOSH UNGARO (Doc. No. 166)
FILED: October 8, 2019
THEREON it is RECOMMENDED that the motion be GRANTED in part and DENIED in part.
 
I. BACKGROUND.
On August 5, 2019, Plaintiffs filed a motion to compel production of documents (the “Motion to Compel”) from the following Defendants: Transfer for You LLC; Allied Solution Group, LLC; JJ Midwest Marketing LLC; JJ&C Marketing LLC; The Midwest Transfer LLC; Midwest Transfers LLC; and Josh Ungaro (collectively the “Ungaro Defendants”). Doc. No. 157. The Ungaro Defendants did not file a response to the Motion to Compel. On September 18, 2019, the Court entered an Order granting the Motion to Compel and directing the Ungaro Defendants to produce all documents responsive to the Requests to Produce on or before September 25, 2019 (the “Order”). Doc. No. 163 at 2. The Court also ordered that the Ungaro Defendants waived all objections except those based on privilege. Id. at 3.
 
On October 8, 2019, Plaintiffs filed a motion for contempt and sanctions against the Ungaro Defendants for failing to produce all documents as ordered (the “Motion for Contempt”). Doc. No. 166. Plaintiffs state that the Ungaro Defendants failed to produce all documents in response to Requests to Produce 7, 12, 17, 19, and 37. Id. at 3-7. They ask that the Court impose a per diem fine on the Ungaro Defendants “for each day [they] continue to disobey the Court’s September 18, 2019 Order ....” Id. at 10. Plaintiffs also request an award of attorney’s fees and costs. Id. Once again, the Ungaro Defendants did not file a response to the Motion for Contempt. Thus, it is considered unopposed. See Local Rule 3.01(b) (“Each party opposing a motion or application shall file within fourteen (14) days after service of the motion or application a response ....”).
 
Plaintiffs state that, in response to the Order, the Ungaro Defendants produced the following: “(1) Access to Defendants’ Consumer Relations Management (“CRM”) platform, but not the underlying documents themselves; (2) Access to a Google Gmail account, to which Defendants forwarded emails purportedly in response to the Requests – thus not the underlying emails themselves; and (3) Tax Returns for the years 2014 – 2016.” Doc. No. 166 at 2. Plaintiffs assert that this production is insufficient. Id.
 
First, Plaintiffs assert that the tax returns production is incomplete because they requested five years of tax returns. Id. at 3. Second, access to the Google Gmail account does not fulfill the Ungaro Defendants’ responsibilities under the Order because they forwarded emails to the Gmail account, which replaced the metadata in the underlying emails. Id. at 4. Plaintiffs specifically requested the documents in “native format on a CD or DVD.” Id. The Ungaro Defendants did not object to producing the documents in this manner, and, even if they had, their objections were deemed waived. Doc. No. 163 at 3.
 
*2 Third, the Ungaro Defendants stated that there were no documents in their “care[,] custody[, or] control” for the following requests to produce:
17. All documents related to any website maintained, or online advertising or marketing used, by [Defendant] that markets to, advertises to, or is otherwise directed toward timeshare owners, including, without limitation, any Wyndham Owner.
19. All documents related to the purchase of online advertisements by [Defendant] that markets to, advertises to, or are otherwise directed toward timeshare owners, including, without limitation, any Wyndham Owner.
Id. at 5. Plaintiffs argue that the Ungaro Defendants’ representation is demonstrably false because both of the websites at issue are still active. Id. Plaintiffs attach copies of the homepages from the websites to the Motion to Compel. Doc. No. 166-4. As noted, the Ungaro Defendants did not respond to the Motion for Contempt, so this assertion is uncontested.
 
Fourth, Plaintiffs argue that the Ungaro Defendants should have produced documents showing their revenues and expenses, including bank statements, in response to Request to Produce 37, which asks for the following: “All documents in [Defendant’s] possession, custody, or control that reflect or evidence any payments made, or funds exchanged, between or among any of the other Defendants related to any Wyndham Owner.” Doc. No. 166 at 6.
 
II. ANALYSIS.
A magistrate judge’s limited contempt powers are set forth in 28 U.S.C. § 636(e). This is not a civil consent case or a misdemeanor case, and the act of contempt was not committed in the undersigned’s presence. Therefore, this Report and Recommendation on the Motion for Contempt is issued.
 
The Ungaro Defendants’ failure to comply with the Order is an act of contempt, and it is recommended that they be held in contempt for this failure. Fed. R. Civ. P. 37(b)(2)(A)(vii) (if a party fails to obey a discovery order, then the court may treat the failure as a contempt of court, unless the order is “to submit to a physical or mental examination.”). Pursuant to 28 U.S.C. § 636(e)(6)(B)(iii), if a magistrate judge finds that certain acts constitute civil contempt, “the magistrate [judge] shall forthwith certify the facts to a district judge ...” who may issue an order to show cause upon any person whose behavior is brought into question under Section 636(e)(6)(B), and the district judge may hold an evidentiary hearing to determine whether that person should be adjudged in contempt by reason of the facts certified. Therefore, it is certified that the facts detailed above warrant an order to show cause for an evidentiary hearing to determine whether the Ungaro Defendants should be held in civil contempt.
 
Plaintiffs request a per diem fine for every day that the Ungaro Defendants disobey the Order. Doc. No. 166 at 8-10. They argue that they have been attempting to obtain this discovery from the Ungaro Defendants for several months and that the Ungaro Defendants are willfully obstructing discovery. Id. at 9. The Requests to Produce were served on March 1, 2019. Doc. No. 166-2 at 12, 24, 36, 48, 60, 72. The Ungaro Defendants failed to respond to the Motion to Compel and the Motion for Contempt. The Order imposed attorney’s fees and costs upon them for failing to produce the requested documents. Doc. No. 163 at 3. The award of attorney’s fees and costs, and the possibility of a per diem fine being imposed against them, failed to garner either the requested documents or, at a minimum, a response to the Motion for Contempt from the Ungaro Defendants. Considering when the Requests to Produce were served on the Ungaro Defendants, their refusal to fully produce the requested documents “impeded the progression of this action.” Johnson v. New Destiny Christian Ctr. Church, Inc., et al., No. 6:15-cv-1698-Orl-37GJK, Doc. No. 131 at 22 (M.D. Fla. Mar. 23, 2017) (finding the defendants in contempt for failing to produce discovery and imposing a per diem fine for every day the failure continued). Thus, considering the range of sanctions that could be imposed, the per diem fine is the least harmful sanction proportionate to the Ungaro Defendants’ behavior that is available to compel compliance with the Order. See In re Grand Jury Subpoena Duces Tecum, 91-02922, 955 F.2d 670, 673 (11th Cir. 1992) (coercive daily fine limited to $1,000 a day for seven days was a reasonably coercive sanction where it was “only imposed to avoid the harms of the [contemnor’s] continued recalcitrance and to induce immediate compliance with the district court’s ... order.”).
 
*3 Plaintiffs also request an award of attorney’s fees and costs. Doc. No. 166 at 9-10. An award of attorney’s fees and costs is warranted under Rule 37(d)(3). Plaintiffs are directed to file an affidavit with supporting documentation setting forth their expenses incurred in bringing the Motion for Contempt.
 
III. CONCLUSION.
Accordingly, it is RECOMMENDED that the Motion, Doc. No. 166, be GRANTED IN PART AND DENIED IN PART as follows:
1. That the Court issue an order to show cause to the Ungaro Defendants and hold an evidentiary hearing to determine whether they should be adjudged in contempt by reason of the facts certified above;
2. That if the Court finds the Ungaro Defendants in contempt, that the Court order them to pay Plaintiffs their reasonable expenses, including attorney’s fees, incurred in filing the Motion for Contempt;
3. That Plaintiffs file an affidavit with supporting documentation itemizing the expenses they incurred in filing the Motion for Contempt;
4. That the Court order the Ungaro Defendants to comply with the Order within seven days of the date of the Court’s order;
5. That the Court caution the Ungaro Defendants that failure to timely comply with its order will result in the imposition of a per diem fine for every day of noncompliance, without further warning; and
6. That, otherwise, the Motion be DENIED.
 

NOTICE TO PARTIES
A party has fourteen days from this date to file written objections to the Report and Recommendation’s factual findings and legal conclusions. Failure to file written objections waives that party’s right to challenge on appeal any unobjected-to factual finding or legal conclusion the district judge adopts from the Report and Recommendation. 11th Cir. R. 3-1.
 
RECOMMENDED in Orlando, Florida, on October 31, 2019.