Kallberg Indus., LLC v. Auto. Experts, Inc.
Kallberg Indus., LLC v. Auto. Experts, Inc.
2019 WL 11504694 (S.D. Fla. 2019)
August 12, 2019
Snow, Lurana S., United States Magistrate Judge
Summary
The Court found good cause for granting the Defendants' Motions to Compel, ordering the Plaintiff to produce documents responsive to Requests for Production, including invoices, purchase orders, work orders, and an ESI file titled 'Kallberg Payments.xls'. The Court found that the information sought was relevant to the parties' claims or defenses and was discoverable under Rule 26(b)(1).
KALLBERG INDUSTRIES, LLC, Plaintiff/Counter-Defendant,
v.
AUTOMOTIVE EXPERTS, INC., and MICHAEL KUNKEL, Defendants/Counter-Plaintiffs
v.
AUTOMOTIVE EXPERTS, INC., and MICHAEL KUNKEL, Defendants/Counter-Plaintiffs
CASE NO. 18-62703-CIV-DIMITROULEAS/SNOW
United States District Court, S.D. Florida
Entered on FLSD Docket August 12, 2019
Counsel
David Samuel Jennis, Jennis Law Firm, Patrick H. Gonyea, Law Offices of Patrick H. Gonyea, P.A., Richard Jehangir McIntyre, McIntyre Thanasides, Sacha Ross, Gray Robinson, Tampa, FL, for Plaintiff/Counter-Defendant.Eric Lee, Lee & Amtzis, P.L., Boca Raton, FL, for Defendants/Counter-Plaintiffs.
Snow, Lurana S., United States Magistrate Judge
ORDER
*1 THIS CAUSE is before the Court on the Defendant's Motion to Compel Production of Documents (ECF No. 20), and Motion to Compel Better Answers to Interrogatories (ECF No. 25), which were referred to United States Magistrate Judge Lurana S. Snow by the Honorable William P. Dimitrouleas, United States District Judge (ECF No. 10).
I. BACKGROUND
Plaintiff filed this action in state court on October 4, 2018, seeking a declaratory judgment/accounting. According to the Complaint, the Plaintiff was responsible for servicing certain back-up generators in Puerto Rico after Hurricane Maria struck on September 20, 2017. Complaint (ECF No. 1-1, at 1-6), at ¶12. The Plaintiff verbally retained the Defendant Automotive Experts to supply equipment including trucks, trailers, fuel pumps, tanks, etc., which equipment was used from October 14, 2017, until January 2018, and also retained Defendant Michael Kunkel to serve in a supervisory/managerial position. Id., at ¶¶13-14, 16. Defendant Kunkel was terminated from employment on January 2, 2018, for cause, and his son Nathaniel Kunkel, who had been employed during a similar time period, was terminated from his position for cause on January 13, 2018. Id., at ¶¶14-15.
Pursuant to its understanding of the parties’ verbal agreement, the Plaintiff paid Defendant Kunkel ($3,296.00) and his son ($12,908.84), and Defendant Automotive Experts ($162,937.90) for the labor and equipment provided, which does not include sums withheld to meet local withholding requirements. Id., at ¶17. The Defendants objected that such sums were less than what the parties had agreed to, did not include commissions to be paid to the Defendant for referral of 25 workers to the Plaintiff, and did not include the costs of shipping the equipment to and from Florida and cleaning and repairing the equipment. Id., at ¶¶18-21.
On November 6, 2018, the Defendants removed the action to this court on the basis of diversity jurisdiction, pursuant to 28 U.S.C. § 1332, alleging that the Plaintiff, an LLC, is a Tennessee corporation whose two members are citizens of Tennessee, and that Defendants are citizens of Georgia. Notice of Removal (ECF No. 1), at ¶¶8-10. The Defendant asserts that the amount in controversy exceeds $75,000 because the Plaintiff has alleged that it tendered $166,000 to the Defendants and that Defendants claim to be owed “considerably more.” Id., at ¶13, quoting ¶18 of the Complaint.[1]
Defendants answered the Complaint, alleged four affirmative defenses (including unjust enrichment), and brought Counterclaims for breach of contract and unjust enrichment. Answer, Aff. Def., and Counterclaim (ECF No. 5). In their affirmative defenses, the Defendants allege that the Plaintiff “knowingly utilized the equipment [provided by the Defendant Automotive Experts] and submitted bills to the prime contractor based on its use of the equipment,” “substantially profited” from the use of that equipment. Id., at 6. The Defendants also allege that despite being paid by the prime contractor for workers provided by Defendant Kunkel, the Plaintiff failed to pay the Defendant. Id., at 7.
*2 According to his Counterclaim, Kunkel was contacted by Mike Kallberg, allegedly one of the principals of Kallberg Industries, seeking equipment and personnel for his company's work on the FEMA power mission following Hurricane Maria. Id., at 8. Kunkel has “close to 30 years experience in doing FEMA generator install missions,” and upon arriving in Puerto Rico he discovered that Kallberg Industries was inexperienced in servicing power generators. Id., at 10. Kunkel worked more than 40 hours weekly as the lead mechanic for the mission and was to be compensated $500 per day plus $88 per diem. Id., at 10, 12. When he requested payment “the topic was consistently avoided,” and after a few months, the Plaintiff “began labeling [Defendant Automotive Experts’] equipment as defective and non-mission capable.” Id.
Kallberg Industries answered the Counterclaim on December 5, 2018, admitting that it agreed to pay Kunkel the claimed amounts, but denying that any further sums were owed to Kunkel. Answer to Counterclaim (ECF No. 12), at ¶¶22, 46. Kallberg Industries also denied that Michael Kallberg is a principal of Kallberg Industries, but admitted that Mr. Kallberg spoke with Kunkel by phone and that equipment and personnel were requested. Id., at ¶¶8-9. Kallberg Industries raised several affirmative defenses, including waiver, offset of payments and that the Counterclaimants have unclean hands; Kallberg Industries also claimed that it acted in good faith and tendered full payment. Id., at 5-7.
On November 30, 2018, the Court entered a scheduling Order, which provided a discovery cutoff of May 1, 2019, and set the trial of this matter for the two week period beginning August 26, 2019. Scheduling Order (ECF No. 10). On April 3, 2019, the Court granted the parties’ joint request for an extension of the discovery period to May 31, 2019. Order (ECF No. 19).
Defendants have filed two motions to compel, one of which the Plaintiff responded to by stating simply that it had “supplemented and clarified” its prior discovery responses and thus believed the motion was moot; the Plaintiff filed no respond to the other motion to compel.
II. DISCUSSION
A. General principles governing discovery
According to Rule 26(b)(1) of the Federal Rules of Civil Procedure:
Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit. Information within this scope of discovery need not be admissible in evidence to be discoverable.
Relevance under Rule 26(b)(1) is construed broadly, but is not without limits. Discovery must not only be relevant to the claims and defenses in the case, but also must be proportional “to the needs of the case.” Fed. R. Civ. P. 26(b)(1). The determination of what is relevant for discovery purposes depends on the parties’ claims and defenses. Further, the Rules of Civil Procedure shall be “construed, administered, and employed by the court and the parties to secure the just, speedy, and inexpensive determination of every action and proceeding.” Fed. R. Civ. P. 1.
An interrogatory must be answered fully and any objections must be stated with specificity. Fed. R. Civ. P. 33(b)(4); S.D. Fla. L.R. 26.1(e)(2)(A). Similarly, objections to requests for production of documents must be stated with specificity, including the reasons for the objection, and must state whether any responsive materials are being withheld on the basis of that objection and “[a]n objection to part of a request must specify the part and permit inspection of the rest.” Fed. R. Civ. P. 34(b)(2); S.D. Fla. L.R. 26.1(e)(2)(A). The Court also has directed the parties to refrain from making “nonspecific, boilerplate objections.” General Order on Discovery Objections and Procedures. (ECF No. 11) “Objections that state that a discovery request is ‘vague, overly broad or unduly burdensome’ are, standing alone, meaningless and will be found meritless by this Court.” Id.
*3 The discovery respondent bears the burden of establishing a lack of relevancy or some other basis for resisting production. See, e.g., Adelman v. Boy Scouts of Am., 276 F.R.D. 681 (S.D. Fla. 2011) (noting that court could grant motion to compel “solely based on [discovery respondent's] procedurally inadequate objections”). After a properly stated objection is presented, the proponent of a motion to compel seeking to overrule the objection must prove relevance of the requested discovery. See, e.g., Diamond State Ins. Co. v. His House, Inc., No. 10-20029-CV, 2011 WL 146837 (S.D. Fla. Jan. 18, 2011) (finding that proponent of discovery had not shown relevance of requested deposition).
B. Defendants’ Motion to Compel Production of Documents
On April 25, 2019, the Defendants filed their first Motion to Compel (ECF No. 20), seeking documents responsive to Requests Nos. 3, 4, 5, and 6 of their Third Requests for Production. On May 9, 2019, the Plaintiff responded to the Motion, stating that it had “supplemented and clarified” its responses to the requests for production and “believes” the Defendants’ Motion “is Moot.” Response (ECF No. 22). The Defendants filed a reply arguing that the Plaintiff's responses remain deficient, and specifically noting that the Plaintiff failed to produce documents regarding payments made to the Plaintiff for equipment and labor by any of its related entities relating to work done at the FEMA generator mission (referred to as the O&M Mission). Reply (ECF No. 23), at 3.
According to the Defendants, the Plaintiff has a related entity, an LLC in Florida also known by the same name as the Plaintiff: Kallberg Industries, LLC. Nonparty Louis Berger Group was the prime contractor, and it hired Kallberg Industries, LLC (Florida), for the work as part of the O&M Mission. The Louis Berger Group purportedly paid Kallberg Industries (Florida) for the work that was billed by the Plaintiff (which the Court denotes as Kallberg Industries (Tennessee)). Apparently the Plaintiff, Kallberg Industries (Tennessee), had been contracted for or hired by Kallberg Industries (Florida). The Plaintiff then contracted with the Defendants and paid them. Id.
In light of this contracting/payment arrangement, the Court finds that the Plaintiff's objections to the Defendants’ discovery requests should be overruled. For example, as to Request for Production No. 3, seeking: “[i]nvoices, purchase orders, or work orders pertaining to Equipment provided by KALLBERG at the O&M Mission,” the Plaintiff responded as follows:
Objection. This request is vague, as it is unknown what ‘invoices’ are being sought. This request is also overly broad, as it is outside of the time-frame of any equipment supplied by Defendants to KALLBERG on the O&M Mission. The request is not reasonably calculated to lead to the discovery of admissible evidence because the request is not limited to the dealings of the parties at issue in this litigation. Without waiving the foregoing objections, and specifically relying thereon, to the extent that KALLBERG maintains the invoices or receipts for the equipment it purchased to replace the equipment supplied by AUTOMOTIVE EXPERTS on the O&M Mission, same will be produced. KALLBERG did not purchase pickup trucks to replace those provided by AUTOMOTIVE EXPERTS on the O&M Mission. KALLBERG is unaware of any ‘purchase orders, or work orders’ that are responsive to this request.
SUPPLEMENTAL RESPONSE: KALLBERG is not in possession of invoices or receipts responsive to this request. However, the receipts for equipment purchased by KALLBERG on the O&M Mission have been requested from the suppliers and will be produced if they are indeed produced by the suppliers to KALLBERG.
*4 Plaintiff's Supplemental Response to Request for Production (ECF No. 23-1), at 3. The Plaintiff's objection fails to sufficiently state a relevancy objection. Although the Plaintiff's objection does describe how the requests are overbroad and vague and, thus, it complies with this Court's General Order on Discovery Objections and Procedures (ECF No. 11) and S.D. Fla. L.R. 26.1(e)(2)(A), the Court finds that the relevancy objections are insufficiently stated to be sustained.[2] Even if the objection had been sufficiently presented, the Court finds that based on the parties’ allegations in their Complaint, Affirmative Defenses, and Counterclaim, the discovery requested by the Defendants falls within the scope of discoverable information under Rule 26(b)(1), Fed. R. Civ. P.
In Request Nos. 4 and 6, the Defendants sought “[d]ocuments pertaining to payments made by any KALLBERG Entity to KALLBERG” for equipment or labor provided at the O&M Mission. The Plaintiff responded similarly to each Request:
Objection. This request is overly broad, unduly burdensome and not reasonably calculated to lead to the discovery of admissible evidence. The request is overly broad because it is not limited to the time-frame of the business dealings between the parties at issue in this case. It is unduly burdensome because the terms ‘pertaining to’ could mean any documents remotely connected to the payments to KALLBERG for ‘Equipment [or labor] provided’ by KALLBERG on the O&M Mission, although not relevant to the subject matter of the litigation. The request is not reasonably calculated to lead to the discovery of admissible evidence because the request is not limited to the dealings of the parties at issue in this litigation. Without waiving the foregoing objections, and specifically relying thereon, KALLBERG states that upon information and belief the documents reflecting the payments made to KALLBERG for equipment supplied [or labor provided] on the O&M Mission were produced by Kallberg Industries, LLC (Florida) in response to the subpoena issued by Defendants.
SUPPLEMENTAL RESPONSE: KALLBERG clarifies its prior response and identifies the document titled ‘Kallberg Payments.xls’ produced by Louis Berger Group in response to the subpoena issued by the Defendants, which is equally accessible by both parties.
Id., at 4. The Court finds this objection insufficient and, even if the objection had been stated sufficiently, the Court finds that the Defendants have demonstrated that the request seeks relevant information and is proportional to the needs of this case.
In Request No. 5 the Defendants sought “[i]nvoices, purchase orders, or work orders pertaining to labor provided by KALLBERG at the O&M Mission.” The Plaintiff responded:
Objection. This request is vague, as it is unknown what ‘invoices’ are being sought. This request is also overly broad, unduly burdensome and not reasonably calculated to lead to the discovery of admissible evidence. The request is overly broad because it is not limited to the time-frame of the business dealings between the parties at issue in this case. It is unduly burdensome because the terms ‘pertaining to’ could mean any documents remotely connected to the payments to KALLBERG for ‘labor provided’ by KALLBERG on the O&M Mission, although not relevant to the subject matter of the litigation. The request is not reasonably calculated to lead to the discovery of admissible evidence because the request is not limited to the dealings of the parties at issue in this litigation. Without waiving the foregoing objections, and specifically relying thereon, KALLBERG states that upon information and belief the documents reflecting the payments made to KALLBERG for labor supplied on the O&M Mission were produced by Kallberg Industries, LLC (Florida) in response to the subpoena issued by Defendants. KALLBERG is unaware of any ‘purchase orders, or work orders’ that are responsive to this request.
*5 SUPPLEMENTAL RESPONSE: KALLBERG clarifies its prior responses and identifies the document titled ‘Kallberg Payments.xls’ produced by Louis Berger Group in response to the subpoena issued by the Defendants, which is equally accessible by both parties.
Id., at 5. For reasons similar to those stated above, the Court overrules the Plaintiff's objection, and finds that the Defendants’ request seeks information discoverable under Rule 26(b)(1), as it seeks information relevant to the parties’ claims or defenses.
In summary, the Defendants have shown good cause for granting their Motion to Compel as to the Requests for Production.
C. The Defendants’ Motion to Compel Better Answers to Interrogatories
The Plaintiff failed to respond to the Defendant's second Motion to Compel (ECF No. 25), which was filed on May 22, 2019, just one week prior to the close of discovery. Local Rule 7.1© provides that the failure to timely file an opposing memorandum of law to a properly filed motion “may be deemed sufficient cause for granting the motion by default.” S.D. Fla. L.R. 7.1©. This Court's General Order on Discovery Objections and Procedures also directs a responding party to file a response to a discovery motion “no later than as provided in the federal procedural rules or as provided by order of the Court.”(ECF No. 11)
Notwithstanding the Defendant's filing the Motion to Compel very late in the discovery period (but nevertheless timely under the Local Rules, based on the Defendants’ late-served Interrogatories), and the Plaintiff's complete failure to respond to the Motion, the Court has reviewed the Motion to Compel and finds good cause for it to be granted. In their Motion to Compel, the Defendants seek complete answers to the two Interrogatories served on April 25, 2019, and ask that the Plaintiff provide verified answers to the Interrogatories. The Defendants are correct that the interrogatories must be verified. Rule 33(b), of the Federal Rules of Civil Procedure, requires that interrogatories be answered “fully in writing under oath,” and that the person answering an interrogatory must sign the answer.
In Interrogatory No. 1, the Defendants sought: 1) the number of days worked by 66 named individuals at the O&M Mission and also at any other Mission in Puerto Rico involving the Plaintiff or any Kallberg entity, and 2) the amounts paid to the Plaintiff (and any Kallberg entity) for each employee (presumably paid by the prime contractor, Louis Berger). The Plaintiff responded that Louis Berger Group paid Kallberg Industries (Florida) $902 daily for mechanics and $1,045 for Mr. Kunkel's position. Unverified Answers to Third Interrogatories (ECF No. 25-1), at 2. The Plaintiff also provided the number of days worked at the O&M Mission, but did not include days worked for any Kallberg entity in Puerto Rico. Id. The Plaintiff objected, however, that the Interrogatory sought information “outside the issues of this case.” Id.
The Defendants argue that the Plaintiff is avoiding answering Interrogatory No. 1 fully because it would reveal that the Plaintiff transferred many of the employees to its related entity, Kallberg Industries (Florida), implicitly to reduce what the Plaintiff owed to Defendant Automotive Experts (which allegedly was to receive $50 per day worked by each employee it referred to the Plaintiff). The Court finds the Plaintiff has failed to properly state an objection. Even if the Plaintiff had stated a proper objection, the Defendants have demonstrated the relevance of the requested information, particularly in light of the Defendants’ allegations in its Counterclaim that the Plaintiff was unjustly enriched.
*6 In Interrogatory No. 2, the Defendants sought the daily reimbursement rate for the Plaintiff for seven pieces of equipment supplied by the Defendant Automotive Experts, and the number of days any Kallberg entity invoiced Louis Berger for the use of such equipment. The Plaintiff provided only the reimbursement rate and did not specify the number of days the equipment was used, and objected that the other information was not within its possession and that the request was overly broad as it sought information from non-parties. Id., at 5. According to the Defendants, they need the number of days because the Plaintiff did not invoice Louis Berger for the use of the Defendant's equipment, and instead such invoices were sent by Kallberg Industries (Florida) to Louis Berger.
The Plaintiff's objection based on “possession” is not well taken, as the Plaintiff has not established that it is unable to obtain the information from its related entity, Kallberg Industries (Florida). Rule 26(b)(1) permits the discovery of any nonprivileged matter that is relevant and proportional to the needs of the case, taking into consideration the “parties’ relative access to relevant information,” among other factors. Fed. R. Civ. P. 26(b)(1). The Court finds the Plaintiff's objection insufficient and also finds the Defendants’ request seeks relevant and, thus, discoverable information under Rule 26(b)(1). Accordingly, the Defendants’ Motion to Compel Better Answers to Interrogatories is granted.
III. CONCLUSION
As described above, the Plaintiff has failed to state sufficient objections on relevancy, or any other grounds, and in any event such objections would be overruled even if they had been properly stated, because the areas of inquiry in the Defendants’ discovery requests are relevant to the parties’ claims or defenses. The Plaintiff also failed to provide a sufficient response to the Defendants’ first Motion to Compel, and provided no response to the Defendants’ second Motion to Compel. Consistent with the above, it is
ORDERED and ADJUDGED that Defendant's Motions to Compel (ECF Nos. 20, 25) are GRANTED. The Plaintiff's objections are overruled, as stated above, and no later than August 16, 2019, the Plaintiff shall provide complete and verified answers to Interrogatories Nos. 1 and 2, and shall verify all answers previously provided to Interrogatories. The Plaintiff also shall produce documents responsive to Requests for Production Nos. 3, 4, 5, and 6 no later than August 19, 2019.
DONE and ORDERED at Fort Lauderdale, Florida this 9th day of August, 2019.
Footnotes
The Defendants state that the Plaintiff alleged that it tendered “approximately $165,000.00 to the Defendants.” Notice of Removal (ECF No. 1), at 13. The Court has referred to a more accurate approximate total of $166,000.00.
The Plaintiff's response includes the following phrase: “Without waiving the foregoing objections ....” This Court has directed that: “The parties shall not recite a formulaic objection followed by an answer to the request.... This type of objection and answer preserves nothing and serves only to waste the time and resources of the parties and the Court.” (ECF No. 11)