Hayden v. Urvan
Hayden v. Urvan
2022 WL 20704040 (S.D. Fla. 2022)
September 16, 2022
Matthewman, William, United States Magistrate Judge
Summary
The court granted Defendant's Renewed Motion to Overrule Objections and Compel Production, ordering Plaintiff to produce all non-privileged documents related to transactions in which he solicited, procured, or sold securities between January 1, 2017 and October 18, 2021, as well as any documents showing compensation received for raising capital or acting as a broker during that time period. This was in response to new information revealed in a deposition that Plaintiff relied on a "no-action" letter from the SEC and received compensation for soliciting investors.
Additional Decisions
MATTHEW HAYDEN, Plaintiff/Counter-Defendant,
v.
STEVEN F. URVAN, Defendant/Counter-Plaintiff.
v.
SEA PURITY, LLC, a Wyoming limited liability company, and BREW FIRST, INC., a Wyoming corporation, Third-Party Defendants
v.
STEVEN F. URVAN, Defendant/Counter-Plaintiff.
v.
SEA PURITY, LLC, a Wyoming limited liability company, and BREW FIRST, INC., a Wyoming corporation, Third-Party Defendants
Case No. 21-cv-82051-SMITH/MATTHEWMAN
United States District Court, S.D. Florida
Signed September 16, 2022
Counsel
Fred Alan Cunningham, Matthew Thomas Christ, Domnick Cunningham & Yaffa, Palm Beach Gardens, FL, Lauren Elizabeth Johnson, Adam Rabin, Havan Morgan Clark, Rabin Kammerer Johnson, P.A., West Palm Beach, FL, for Plaintiff/Counter-Defendant.Lauren Elizabeth Johnson, Adam Rabin, Havan Morgan Clark, Rabin Kammerer Johnson, P.A., West Palm Beach, FL, Fred Alan Cunningham, Domnick Cunningham & Yaffa, Palm Beach Gardens, FL, for Third-Party Defendants Brew First, Inc.
Lauren Elizabeth Johnson, Adam Rabin, Havan Morgan Clark, Rabin Kammerer Johnson, P.A., West Palm Beach, FL, for Third-Party Defendants Sea Purity LLC.
Joanne M. O'Connor, Steven Jeffrey Rothman, Michael James Gore, Hanna Beth Rubin, Jones Foster P.A., West Palm Beach, FL, for Defendant/Counter-Plaintiff.
Matthewman, William, United States Magistrate Judge
ORDER GRANTING DEFENDANT/COUNTER-PLAINTIFF STEVEN F. URVAN'S RENEWED MOTION TO OVERRULE OBJECTIONS AND COMPEL PRODUCTION AGAINST PLAINTIFF/COUNTER-DEFENDANT MATTHEW HAYDEN [DE 97]
*1 THIS CAUSE is before the Court upon Defendant/Counter-Plaintiff Steven F. Urvan's (“Defendant”) Renewed Motion to Overrule Objections and Compel Production Against Plaintiff/Counter-Defendant Matthew Hayden (“Renewed Motion”) [DE 97]. Plaintiff Matthew Hayden has filed a Response [DE 99], and Defendant has filed a Reply [DE 102]. The Court held a hearing on the Motion via Zoom video teleconference (VTC), on September 16, 2022.
I. BACKGROUND
On May 5, 2022, Defendant filed a Motion to Overrule Objections and Compel Production (“Initial Motion”) [DE 54]. After the matter was fully briefed, the Court held a hearing on Defendant's Initial Motion on May 27, 2022, via Zoom VTC. During that hearing, the Court granted in part and denied in part Defendant's Initial Motion, reducing its ruling to a June 2, 2022 Order Granting in Part and Denying in Part Defendant's Motion to Overrule Objections and Compel Production (“June 2, 2022 Order”) [DE 65].
In the Court's June 2, 2022 Order, the Court first stated that the case “is not an SEC enforcement action,” noting thereafter that the case was “still in the early stages of discovery, with no deposition having yet been taken.” [R. 65 at 4]. Accordingly, at that time, the Court granted Defendant's Initial Motion “to the extent Defendant s[ought] documents responsive to Document Requests #25, 30, 31, 36, 37, and 38 that [we]re related to the Gunbroker.com and Brew First, Inc. transactions or investments,” but denied Defendant's Initial Motion “to the extent that Defendant s[ought] documents unrelated to the Gunbroker.com or Brew First, Inc transactions or investments.” Id. at 5. In doing so, the Court noted as follows:
While the Court is not going to require Plaintiff to produce discovery unrelated to Gunbroker.com or Brew First, Inc. at this point, the Court's finding is without prejudice to Defendant's ability to renew its request (after proper conferral), if it can do so in good faith, once the case is more fully developed and the alleged need arises for broader discovery. For example, if Plaintiff is indeed going to be relying upon the January 31, 2014 ‘no-action’ letter by the SEC as a defense, and that becomes clear, the Court may require additional discovery to make sure Defendant is afforded sufficient discovery to litigate its case.
Now, in Defendant's Renewed Motion [DE 97], utilizing the language from this Court's June 2, 2022 Order, Defendant asserts “that there is now a good-faith basis to renew the [Initial] Motion as to Request No. 31 based on Hayden's recent deposition testimony, including statements indicating that Hayden (1) relies on the ... ‘no action’ letter and (2) has received compensation for actively soliciting a broad spectrum of potential investors.” [DE 97 at 3]. Defendant therefore requests that the Court grant the Renewed Motion “and compel the production of documents responsive to Request Number 31 in its entirety without limitations.” Id. at 6. Notably, Request 31 states as follows:
All Documents and Communications that relate to any investment, acquisition, merger, or Securities that You solicited, marketed, procured, or sold, or participated in the solicitation, marketing, sale, procurement, acquisition or merger, since January 1, 2017. This request includes: (a) all Communications with any Person regarding or relating to any investment, acquisition, merger, or Securities; (b) all representations made to any Persons regarding or relating to any investment, acquisition, merger, or Securities; (c) marketing or advertising material regarding or relating to any investment, acquisition, merger, or Securities; and (d) all Documents relating to compensation You received or should have received in connection with the same (including, but not limited to, fee schedules, commission or compensation agreements or documents reflecting such arrangements).
*2 [DE 54-1 at 7].
However, in Defendant's Reply, Defendant subsequently notes that he “clarified in the meet-and-confer held prior to the filing of the [I]nitial Motion ... that [Request 31] seeks documents relating to transactions in which Hayden solicited, procured the sale of, sold, or participated in the solicitation, procurement, or sale of securities.” [DE 102 at 5]. Defendant contends that Request No. 31—as clarified—“seeks evidence necessary to litigating [Defendant's] securities claims and defenses and Hayden's claimed exception.” Id. at 6.
II. RULING
The Court has carefully considered the relevant law, Defendant's Motion, Plaintiff's Response, Defendant's Reply, the attachments thereto, the discovery request and response, the arguments of counsel for both parties at the September 16, 2022 Zoom VTC hearing, as well the entire docket in this case. Based on the foregoing, it is hereby ORDERED that Defendant's Renewed Motion [DE 97] is GRANTED.
1. The Court first notes that under Federal Rule of Civil Procedure 26(b)(1), it wants both sides to get the relevant and proportional discovery to which they are entitled. In light of the fact that Plaintiff is going to be relying on the SEC “no-action” letter, the Court finds that discovery concerning whether Plaintiff is or is not an M&A Broker outside of transactions or investments involving Gunbroker.com or Brew First, Inc., is relevant and proportional to the needs of the case at this time.
2. Plaintiff Hayden shall produce all non-privileged documents regarding transactions in which Hayden solicited, procured the sale of, sold, or participated in the solicitation, procurement, or sale of securities, during the time period of January 1, 2017, through October 18, 2021.[1]
3. Plaintiff Hayden shall also produce all documents showing, establishing, or evidencing compensation he received for raising capital, providing advice, or acting as a broker, during the time period of January 1, 2017, through October 18, 2021.
4. Accordingly, on or before September 20, 2022, Plaintiff Hayden shall produce such discovery. If Plaintiff needs additional time after exercising due diligence and attempting to produce the discovery, the Court will consider a request for additional time should it become appropriate. However, the Court notes that the discovery cutoff date is September 20, 2022.
DONE AND ORDERED in Chambers at West Palm Beach, Palm Beach County, in the Southern District of Florida, this 16th day of September, 2022.
Footnotes
The Court notes that during the September 16, 2022 Zoom VTC hearing, it inadvertently informed the parties that the time period for production was June 1, 2019 through October 18, 2021. This was a mistake on the Court's part. Upon further review, the Court finds that January 1, 2017, through October 18, 2021 is the appropriate time period.