Abruzzo v. United States

21 Cl. Ct. 351, 1990 U.S. Claims LEXIS 346, 1990 WL 128376
United States Court of Claims·Decided September 5, 1990·No. No. 509-89T·Published·Cited by 2 cases

Opinion

ORDER

LYDON, Senior Judge:

In this tax refund suit, the parties seek the court’s intervention regarding disputes over the discovery of expert witnesses. Plaintiffs have filed a motion for a protective order in which they seek to protect from disclosure the reports prepared by their expert witness until such time as defendant discloses the report of its own expert witness.1 In response, defendant filed a motion to compel plaintiffs to disclose their expert witness report, and to compel plaintiffs to respond more fully to defendant’s interrogatories and to defendant’s requests for production of documents. For the following reasons, the court denies plaintiffs’ motion for a protective order and grants defendant’s motion to compel discovery in the manner set forth below.

FACTS

Plaintiffs filed suit in this court seeking a refund of estate taxes paid, including interest and penalties, in the sum of $3,323,935.68. Since the primary issue in the case involves the value of decedent’s stock interest in four closely-held corporations, plaintiffs retained the services of a valuation firm, Desmond & Marcello (D & M). D & M prepared an initial three-page valuation report for the decedent’s estate tax return, dated November 1, 1985, which has already been provided to defendant. Plaintiffs admit that D & M has also prepared a draft report for litigation purposes, but plaintiffs refuse to complete and disclose D & M’s final valuation report until all factual discovery has been completed in this case, or until such time as defendant identifies and discloses its expert witness and report. In defendant’s reply brief of August 27, 1990, defendant indicated that it has retained Valuation Counselors, Inc. as its valuation experts, and has so informed plaintiffs.

On March 5, 1990, plaintiffs stated in a Joint Preliminary Status Report that D & M’s valuation report would be furnished to defendant immediately upon completion. Plaintiffs maintain that when they made this statement, plaintiffs believed that D & M’s final report would be ready in March 1990, and that defendant would not be retaining any additional experts other than [354] those defendant had already retained (for purposes of the Internal Revenue Service investigation) at the time of the March 1990 joint status report.

On May 8, 1990, defendant served its Third Set of Interrogatories and Third Request for Production of Documents on plaintiffs. Defendant’s Interrogatory No. 31 contains a RUSCC 26(b)(3) inquiry with regard to plaintiffs’ expert witness.2 RUSCC 26(b)(3)(A)(i) allows a party, through interrogatories, to require an adverse party to identify the name of each expert witness the adverse party intends to call at trial, the subject matter of each expert’s anticipated testimony, the substance of the facts and opinions to which the expert will testify, and a summary of the grounds for each opinion. In this case, defendant’s Interrogatory No. 31 substantially tracks the language of RUSCC 26(b)(3)(A)® in seeking to discover such information about plaintiffs’ valuation expert. In response to defendant’s Interrogatory No. 31, plaintiffs identified the names and addresses of the four experts whom plaintiffs expect to testify at trial, including D & M, and plaintiffs identified the subject matter of their experts’ testimony as the value of decedent’s interest in certain business entities and real estate holdings. With regard to the substance of the facts and opinions to which the experts are expected to testify, and the summary of the grounds for each of their opinions, plaintiffs stated that this information was contained in the November 1, 1985 D & M valuation report, as well as in the valuation report that D & M was currently preparing.

Defendant’s Third Request for Production of Documents contains fifteen separate requests for documents, all of which appear to be reasonably related to the valuation issue in this case, with the possible exception of Request for Production No. 15, as it relates to Interrogatory No. 35, discussed infra.

On June 19, 1990, defendant received plaintiffs’ responses to defendant’s Third Set of Interrogatories and Third Request for Production of Documents. Plaintiffs stated in their answers to Interrogatory Nos. 23 through 26 that “a new Valuation Report is being prepared and will be furnished when completed.” Plaintiffs objected to Interrogatory No. 35, which asked for information regarding sales or transfers of property of any entity, or sales or transfers of interests in any entity whose value is at issue in this case from 1984 to the present. Plaintiffs’ objection to Interrogatory No. 35 alleged that the interrogatory was over-broad, extremely burdensome and oppressive, and sought mostly irrelevant information. Nonetheless, plaintiffs affirmed that some sales and transfers took place during that time period, and indicated that “some of the relevant information requested is being gathered and organized and will be furnished at a later date.”

Plaintiffs’ response to defendant’s document request merely stated that plaintiffs were currently in the process of collecting all documents requested, and that copies of the documents requested would be furnished to defendant as soon as they are ready. Plaintiffs produced no documents at that time, and plaintiffs voiced no objection at that time to the production of any of the documents requested.

Counsel for both parties tried to work out their discovery problems by telephone calls and by written correspondence between June 20 and July 2, 1990. Defendant contacted plaintiffs’ counsel by letter [355] on June 20, 1990, informing plaintiffs’ counsel that, in defendant’s view, plaintiffs’ responses to defendant’s Third Set of Interrogatories and Third Request for Production of Documents were deficient and untimely. During the course of these communications, plaintiffs’ counsel stated they were unwilling to provide defendant with D & M’s final valuation report until defendant’s expert report was disclosed. On July 2, 1990, defendant received plaintiffs’ amended response to defendant’s Third Request for Production of Documents, in which plaintiffs objected to the production of, inter alia, all drafts of the valuation report prepared by plaintiffs’ experts D & M. On July 9, 1990, defendant received from plaintiffs some of the documents sought in defendant’s request for production, but defendant maintains that plaintiffs’ response is still incomplete, specifically with regard to Interrogatory No. 35 and Request for Production Nos. 12-15.

In plaintiffs’ brief supporting their motion for a protective order, filed with the court on July 3, 1990, plaintiffs maintain that for “strategic litigation purposes, [D & M’s] report will not be finalized until all factual discovery is completed in this case.” Subsequently, defendant filed its motion to compel discovery on July 19, 1990.

DISCUSSION

I

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Abruzzo v. United States, 21 Cl. Ct. 351, 1990 U.S. Claims LEXIS 346, 1990 WL 128376 (cc 1990).

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