1 WO 2 3 4 5
9 Berkadia Real Estate Advisors LLC, No. CV-22-00049-TUC-CKJ
10 Plaintiff, ORDER
11 v.
12 Arthur R Wadlund, et al.,
13 Defendants. 14 Arthur R. Wadlund, et al.,
15 Counterclaimants,
16 v.
17 Berkadia Real Estate Advisors LLC,
18 Counterdefendant.
20 This is the sequel to the Court’s last discovery Orders issued February 17 and 21, 21 2023, which set relevancy parameters for discovery by bookending the case one-year 22 before and after the alleged breach of contract on January 10, 2022, with exception for 23 discovery related to 2012 and 2013 negotiations involving the noncompete provisions 24 included in Defendants’ Berkadia employment agreements. 25 Plaintiff now files a motion to compel discovery asserting that the discovery that 26 has been completed suggests Defendants have not made complete disclosures for several 27 discovery matters. Plaintiff also complains that Defendants continue to refuse to meet and 28 confer regarding discovery disputes. See (Order (Doc. 163) at 1 (referencing Order (Doc. 1 133) at 25 (specifying that meet and confer may not be done by dueling emails; parties 2 must speak directly to each other in person at least on the telephone). 3 Fed. R. Civ. P. 37(a)(1): Duty to meet and confer prior to filing a motion to compel 4 The Court begins with the meet and confer efforts undertaken in relation to this 5 Motion to Compel. In the motion, Plaintiff makes a blanket complaint that Defendants’ 6 counsel has been nonresponsive to efforts to meet and confer and has been unwilling to 7 meet and confer regarding the matters raised in the Motion to Compel. 8 Agreeing that the parties have not met nor conferred, Defendants blame the failure 9 on Plaintiff. Defendants attach an April 28, 2023, email from Joel Herz to Stephanie 10 Quincy and Sidney Turtchin wherein Herz asserts that he never agreed to Plaintiffs’ 11 proposal made on April 17, 2023, to meet and confer on April 27, 2023. According to Herz, 12 he never agreed to meet on April 27, 2023, but offered to meet on May 2, 2023, after the 13 deposition of Steve Gebing. (Response to Motion to Compel (Resp. MC), Ex. 8: email 14 4/28/23 (Doc. 166-8)). According to Herz, Plaintiff’s counsel did not respond to the 15 proposal to meet and confer after the May 2, 2023, deposition, did not bring up the subject 16 at the May 2 deposition and did not attempt to reschedule a meet and confer at any time 17 prior to filing the Motion to Compel. (Resp. MC (Doc. 166) at 17-18.) Herz asserts he 18 believed the information provided April 28, 2023, resolved the matters between them. 19 In the Reply, Plaintiff asserts that the parties had agreed to meet and confer on April 20 27, 2023, and on that date, it sent a Zoom meeting invitation to Defendants’ counsel, who 21 never showed up. According to Plaintiff, Herz agreed to meet and confer after the May 2 22 deposition but then, Herz, who appeared at the in-person deposition of Gebing by Zoom, 23 dropped off the meeting. The Court notes that the Herz April 28 email only says that he is 24 “available” on May 2, it does not evince a firm date being set to meet and confer. 25 The Court finds that the parties did not properly meet and confer prior to Plaintiff 26 filing the Motion to Compel, and this omission was apparent when the parties contacted 27 the Court to set a briefing schedule for the Motion to Compel. It was clear that Defendants 28 knew what discovery the Plaintiff wanted, did not believe it was a legitimate discovery 1 request, and had no intention of producing the requested discovery. The briefing for the 2 Motion to Compel makes it clear that discovery in this case has been impeded by a lack of 3 cooperation on both sides that does not benefit the parties’ interests in resolving the dispute 4 expeditiously on the merits. The rule requires certification by the movant that it has in good 5 faith conferred or attempted to confer with the person or party failing to make disclosure 6 or discovery in an effort to obtain it without court action. Fed. R. Civ. P. 37(a)(1). In the 7 future in this case, “certification” shall mean accompanying documentation of all proposed 8 meetings for conferences up through the actually held meeting, telephonic or in-person, 9 between the parties. The parties shall proceed to meet and confer in the future without 10 judicial assistance, fully document the scheduling of the meet and confer and that it has 11 been held, before contacting the Court. 12 1. Text Messages (RFP Nos. 3, 4, 9 and 11) 13 Plaintiff complains it only received group text messages for the time prior to 14 Defendants leaving Berkadia for C. Wadlund between himself, Panahi, and Sarbnoff. 15 Plaintiff complains that many of the text messages received from A. Wadlund are 16 incomplete as is evident because they reference other messages, which have not been 17 produced. Plaintiff reports it received emails from CBRE, another competitive brokerage 18 firm the Defendants were talking to about leaving Berkadia, pursuant to a subpoena to 19 CBRE. Defendants have similarly produced CBRE emails. Plaintiff wants CBRE text 20 messages too. 21 Defendants respond that they have searched their phones and produced all the text 22 messages found there. According to A. Wadlund, he searched his test messages and emails 23 and produced all text messages and emails responsive to Plaintiff’s discovery requests. 24 (Resp. MC, Ex. 4, A. Wadlund Affid. (Doc. 166-4) at 1-2.) “As set forth in the Declaration 25 of Brian Chase, attached hereto as Exhibit 5, Clint Wadlund’s phone was searched for the 26 text messages that Plaintiff is seeking – including all communications with IPA and anyone 27 employed by IPA and anyone at CBRE – and none were found. There was also a search 28 for texts with the property owners. Defendants were talking to [CBRE] about leaving 1 Berkadia.” (Resp. MC (Doc. 166) at 14.) C. Wadlund explains it was his practice prior to 2 January 12, 2022, to not retain emails. “Arthur and Clint Wadlund cannot produce what 3 they do not have.” (Resp. MC (Doc. 166) at 14.) 4 The Court has reviewed the affidavits and finds that the Chase affidavit does not 5 support C. Wadlund’s assertion that his text messages were searched for communications 6 related to CBRE, and A. Wadlund’s affidavit provides no insight into the parameters of its 7 search. The Court agrees with Plaintiff that the text message productions suggest the 8 Defendants did not provide their communications with or related to CBRE. See (Reply 9 MC (Doc. 178) (citing email by C. Wadlund saying “[p]robably smart for Art and I to 10 switch to personal emails and text messages for communication. . . . Please add your cell’s 11 and I can get a text chain going.” and “[p]lease reply back to Art’s text regarding #4 of the 12 Recruitment Agreement and we will act accordingly.”) 13 According to Plaintiff, the text messages produced by Defendants are incomplete, 14 as follows:
15 First, Defendants have not produced all text message between themselves regarding IPA in the year before they left Berkadia (RFP No. 9). A. Wadlund 16 produced a total of seven text messages with C. Wadlund over this one-year period, most of them months apart from one another. Based on the text 17 messages A. Wadlund has produced, it is evident that he cherrypicked individual texts without providing full conversations. For example, on 18 September 3, 2021, A. Wadldund texted C. Wadlund saying: “[w]e really need some help so jump on the IPA and CBRE thing. I’m running out of 19 gas.” (Dkt. 152-1 at 108). The next text message between Defendants that A. Wadlund produced was over two months later on November 15, 2022, and it 20 was unrelated to the earlier text message. (Id.). Similarly, on November 25, 2022, C. Wadlund sent A. Wadlund a text discussing A. Wadlund’s planned 21 retirement and their move to IPA. (Id.). The next text message between Defendants that A. Wadlund produced was nearly a month later on December 22 19, 2022, and it was on a different topic. (Id.).
23 (Reply MC (Doc. 178) at 3.) Plaintiff does not seek all text messages between Defendants, 24 but responsive text messages are not to be limited strictly to those texts that contain the 25 word “IPA” and should include any text messages that form part of those conversations, 26 which are necessary to provide relevant context. 27 In a sur-reply, Defendants assert they have produced additional text messages that 28 they obtained from IPA. In a sur sur-reply, Plaintiff continues to seek messages from, to, 1 or between Defendants regarding IPA during the year before they left Berkadia and text 2 messages to and from or about CBRE. 3 The Court finds that the Defendants have not searched their text messages for 4 communications related to CBRE. Additionally, it is also difficult to determine from either 5 A. Wadlund’s affidavit or the forensic expert’s affidavit that the text messages were 6 adequately reviewed by the parties for context or if only cursory word searches were 7 conducted. Therefore, Plaintiff shall provide a list of text messages they believe are 8 incomplete to the Defendants to facilitate a more comprehensive contextual search for text 9 message communications that appear to likely have existed at one point in time. 10 2. Payments from IPA to Defendants1 11 According to Plaintiff, Defendants refused to produce anything beyond A. 12 Wadlund’s redacted bank statement, therefore, they have not fully responded to Plaintiff’s 13 Supplemental Discovery Requests for documents and communications regarding any 14 payments and/or loans Defendants received from IPA, including any commissions. 15 Specifically, Plaintiff accuse Defendants of not answering interrogatory 5 asking 16 Defendants to identify payments they received from IPA, including the “date, amount, and 17 what the payment was for.” (MC (Doc. 164) at 15). “Knowing what each payment was for 18 is essential to determine how much Defendants received for each property at issue in the 19 case.” Id. 20 Subsequent to the motion, Defendants updated this discovery. Still, Plaintiff 21 complains that the list of commissions is incomplete because it does not include a 22 $3,000,000 forgivable loan, paid in installments, from IPA to Defendants. Plaintiff 23 challenges the accuracy and completeness of the discovery when the disclosures are 24 compared to the bank statement produced by A. Wadlund seven amounts are missing. 25 Plaintiff complains that C. Wadlund has only produced his 2022 Form 1099, which shows 26 he was paid $1,010,422.90 in comparison to the list which shows he only received 27 $978,633.72 for the year. Now, Plaintiff wants the documents relied on by Defendants to 28 1 The Court has previously held that this discovery is relevant. (Order (Doc. 133) at 12.) 1 create the updated list showing the date, amount, and reason for each payment. Plaintiff 2 notes that Defendants admitted during depositions that a previously created and produced 3 list of properties was not accurate. 4 In a sur-reply, Defendants provide further updates to the list, specifically, explaining 5 the seven discrepancies identified by Plaintiff. (Sur-reply (Doc. 180) at 2-3.) In a sur sur- 6 reply, Plaintiff again requests the underlying documents that Defendants have relied on to 7 create the lists of payments made by IPA to Defendants. More, importantly Plaintiff notes 8 that only A. Wadlund produced his bank statements, not C. Wadlund. Without A. 9 Wadlund’s bank statements, Plaintiff would not have been able to identify the seven 10 discrepancies in Defendants’ proffered list of payments which have now been explained. 11 Unfortunately, the back and forth played out in writing between the parties is an 12 example of what they should have done during meaningful good faith “meet and confer” 13 efforts. The Court concludes that there has now been complete discovery related to 14 payments from IPA to A. Wadlund. The Court cannot say the same for C. Wadlund. Like 15 A. Wadlund did, Defendant C. Wadlund shall provide his bank statements to Plaintiff so 16 Plaintiff may identify any discrepancies in the lists Defendants have tendered and seek 17 clarification. 18 3. Defendants’ Communications with Property Owners Post-employment with IPA 19 The Plaintiff shall provide Defendants with a list of its alleged clients that are at 20 issue in this case. Defendants shall, if they have not already, produce their communications 21 with these property owners beginning one-year before Defendants left Berkadia and ending 22 one-year after or January 10, 2023. Without any date limitation, the Defendants shall 23 produce contact information for property owners that Defendants have asked to sign letters 24 of support, who Defendants have disclosed as possible witnesses. 25 4. Joint Defense Agreement 26 Defendants and IPA assert a privilege under the “common interest” or “joint 27 defense” rule, an exception to ordinary waiver rules for confidentiality. These exceptions 28 allow attorneys for different clients, and even nonparties, who pursue a common legal 1 strategy to communicate with each other. Hunydee v. United States, 355 F.2d 183, 185 2 (9th Cir.1965); In re Grand Jury Subpoenas, 902 F.2d 244, 249 (4th Cir.1990) (collecting 3 cases). A shared desire to see the same outcome in a legal matter is insufficient to bring a 4 communication between two parties within this exception. Id. The parties must make the 5 communication in pursuit of a joint strategy in accordance with some form of agreement 6 —whether written or unwritten, cf. Continental Oil Co. v. United States, 330 F.2d 347, 7 350 (9th Cir.1964), and like all privileges, these exceptions to disclosure are narrowly 8 construed, United States v. Nixon, 418 U.S. 683, 709 (1974). 9 The Restatement (Third) of Law Governing Lawyers (“Restatement”) (2000), 10 Restatement § 76(1) describes the common interest doctrine as follows: 11 If two or more clients with a common interest in a litigated or nonlitigated 12 matter are represented by separate lawyers and they agree to exchange information concerning the matter, a communication of any such client that 13 otherwise qualifies as privileged [as attorney-client communications] that relates to the matter is privileged as against third persons. Any such client 14 may invoke the privilege, unless it has been waived by the client who made the communication. 15 The doctrine does not create a privilege, but is an exception to the rule that 16 communications between a person and a lawyer representing another person are not privileged. Restatement § 76, Reporters Note cmt. c. 17 18 Arizona Indep. Redistricting Comm'n v. Fields, 206 Ariz. 130, 141–42 (Ct. App. 2003). 19 Communications exchanged subject to the common interest doctrine must 20 themselves be privileged as well as related to the parties' common interest, “which may be 21 either legal, factual, or strategic in character.” Restatement § 76 cmt. e, Reporters Note 22 cmt. d. 23 The joint defense rule only protects communications if the communication is made 24 by separate parties in the course of a matter of common interest, the communication is 25 designed to further that effort, without attorney-client or work-product privileges being 26 waived by third-party disclosures. The exception may apply prior to the commencement of 27 litigation but there must be some evidence that the communication was made “in pursuit 28 of a joint strategy in accordance with some form of agreement—whether written or 1 unwritten.” In re Pac. Pictures Corp., 679 F.3d 1121, 1129 (9th Cir. 2012). A written “joint 2 defense agreement,” does not create the privilege. Arizona Indep. Redistr. Comm’n, 206 3 Ariz. at 141 n. 11 (citing See Aetna Cas. & Sur. Co. v. Certain Underwriters at Lloyd's 4 London, 176 Misc.2d 605, 676 N.Y.S.2d 727, 730–31, 733 (Sup.Ct.1998) (“[a] private 5 agreement by the parties to protect communications cannot create a privilege”) (citation 6 omitted)). 7 Plaintiff complains that Defendants have refused to make disclosures of 8 communications, pursuant to an alleged joint defense agreement but refused to produce the 9 Joint Defense Agreement. Plaintiff represents that at A. Wadlund’s deposition on February 10 10, 2023, he testified that he has not entered into any agreements with IPA, Krista or Lisa, 11 and C. Wadlund testified at his deposition on February 11, 2023, that he doesn’t know of 12 any such agreements. Therefore, Plaintiff challenges the asserted exceptions to disclosure 13 and asks the Court to confirm the existence of the agreement. 14 Plaintiff also argues that Defendants waived any assertion of “common interest” 15 privilege, which it asserted for the first time in the March 17, 2023, Supplemental Privilege 16 Log. “Common Interest” was not asserted in the Second Amended Privilege Log produced 17 on February 22, 2023, after this Court ordered Defendants to revise the deficient log or 18 “immediately disclose all allegedly privileged documents.” (Order (Doc. 133) at 7.) 19 “On March 17, 2023, after Plaintiff pointed out that documents Defendants were 20 withholding were not privileged because they included third parties, Defendants 21 supplemented their privilege log to indicate they withheld documents based on the common 22 interest doctrine.” (Reply MC (Doc. 178) at 6-7 (citing Ex. 7, Ds Supp. PL (Doc. 178-1) at 23 26).) 24 None of the privilege logs are dated, but the Court discerns that the Defendants’ 25 [Joint] Supplemental Privilege Log attached as Ex. 7 to Plaintiff’s Reply is the relevant log 26 for purposes of the Motion to Compel. Plaintiff does not identify the specific entries on the 27 log that it seeks, but there are five entries dated 12/4/21 and 12/5/21, and 112 entries for 28 12/12/21 to 1/31/22. The Court notes that the Defendants claim multiple privileges, but 1 Plaintiff only challenges Defendants’ claims of common interest and joint defense, 2 therefore, the Court finds the Defendants’ underlying claims of attorney-client and work- 3 product privilege are legitimate. 4 By comparing the privilege logs for February 22, 2023, and March 17, 2023, it 5 becomes apparent that in February, Defendants used “Joint Defense” to identify documents 6 that were disclosed by Defendants to third-party IPA and/or to Defendant C. Wadlund’s 7 attorneys’ Saffer and Valentine. In March, for the first-time attorney Herz, A. Wadlund’s 8 attorney, identified himself as attorney for C. Wadlund too until January 19, 2021. (Reply 9 MC, Ex. 7, 3/17/23 Joint Supp. PL (Doc. 178-1) at 29.) Correspondingly, the Defendants 10 identified such disclosures as being made between them as protected by the common 11 interest doctrine. 12 Specifically, in March, the privilege log duplicatively identified all the claims of 13 joint defense as common interest but the only new additions were communications sent 14 between Defendants while both were represented by Herz. This explains the differences 15 between representations on the February and March privilege log, not an untimely claim 16 of common interest. The Court rejects the Plaintiff’s argument that Defendants’ waived the 17 right to assert the common interest rule as an exception to disclosure. 18 According to Defendants, on January 12, 2022, they received threatening letters 19 from Berkadia and “jointly retained attorney Herz. Later, Defendant C. Wadlund engaged 20 separate and independent counsel Safer and Valentine. The privilege log supports this 21 assertion because it reflects the first disclosures by Herz to Saffer on January 25, 2022, 22 (Reply MC, Ex. 7, 3/17/23 Joint Supp. PL (Doc. 178-1) at 33, 35), and an email re: Joint 23 Defense Agreement to Saffer on January 26, 2022, id. at 39. 24 It is not at all clear to the Court that Plaintiff is challenging nondisclosures of 25 communications between the Defendants and attorney Herz during the time they allegedly 26 were both represented by him or communications between their respective attorneys as not 27 privileged. Without more, the Court does not address the merits of Defendants’ 28 nondisclosure of communications between them and attorney Herz, his communications 1 with them and/or C. Wadlund’s attorneys Saffer/Valentine. The crux of Plaintiff’s motion 2 to compel documents reflected on the March privilege log appears to be those involving 4 In support of nondisclosure of communications involving third-party IPA, the 5 Defendants submit they and IPA received a threatening letter from Berkadia around 6 January 12, 2022, and this is the asserted effective date of the Joint Defense Agreement 7 signed by Defendants and IPA on January 31, 2022, which was the date Plaintiff filed this 8 action. Defendants offer, and the Court agrees to, an in camera review of the Joint Defense 9 Agreement. For purposes of the Motion to Compel, the Court assumes such agreement 10 exists in writing and was signed on January 31, 2022, by both Defendants and IPA.2 11 In Reply, Plaintiff clarifies that it is not asserting there must be a written Joint 12 Defense Agreement, but it argues the Defendants have not established any agreement, 13 written or oral, existed prior to January 31, 2022, which was the date Plaintiff filed this 14 action. Plaintiff believes this was the first time Defendants and nonparty IPA discussed a 15 joint defense agreement. Plaintiff refers to privilege log entries dated January 31, 2022, 16 that reflect an “Email re: Joint Defense Agreement.” (Reply, Ex. 7, Ds. Supplemental 17 Privilege Log (Doc. 178-1) at 44.) The Plaintiff argues this does not support Defendants 18 assertion reflected as docket entry for January 12, 2022, for “Joint Defense Agreement 19 relating to any lawsuit or arbitration, or claims made by Berkadia against any signatory to 20 Defense Agreement (Joel Herz, Jonathan Saffer, Spencer Reed).” Id. at 26. Unlike all the 21 other privilege log entries, this January 12, 2022, entry does not identify an actual 22 document and does not include “Date Document Was Generated, Prepared Or Dated.” 23 Instead, it qualifies the January 12, 2022, log entry as: “effective date.” 24 Plaintiff makes a solid argument that the privilege log entries suggest the Joint 25 Defense Agreement was entered into on January 31, 2022. There is no email or other log 26 entry reflecting any communication between the Defendants’ counsel and counsel for IPA
27 2 For purposes of this Order, the Court has referred to IPA in reference to all nonparties, but in the context of discussing the joint defense rule, the Court means Marcus Millichap 28 because the Court assumes it was the only nonparty signator to the Joint Defense Agreement. 1 on January 12, 2022, related to a joint defense agreement or anything else. This stands in 2 stark comparison to the several January 31, 2022, entries reflecting “email re: Joint Defense 3 Agreement” being sent between the respective attorneys representing both Defendants and 4 IPA, see (Reply MC, Ex. 7, 3/17/23 Joint Supp. PL (Doc. 178-1) at 43-44), or the privilege 5 log entries reflecting the Herz-Saffer Joint Defense Agreement signed on or around January 6 26, 2022, id. at 39. 7 The Court will afford Defendants an opportunity to support an earlier “effective” 8 date for the Joint Defense Agreement signed on January 31, 2022, and Defendants may do 9 so in camera. “[B]before a district court may engage in in camera review at the request of 10 the party opposing the privilege, that party must present evidence sufficient to support a 11 reasonable belief that in camera review may yield evidence that [the privilege may not 12 apply].” United States v. Zolin, 491 U.S. 554, 574-75 (1989). Here, Defendants voluntarily 13 offer to present the January 31, 2022, written agreement. The Court finds that the record 14 before it supports a reasonable belief that in camera review may yield evidence that the 15 privilege may not apply prior to January 31, 2022. 16 The only support for Defendants’ assertion that the Joint Defense Agreement and 17 common interest doctrine covers communications between IPA and Defendants as of 18 January 12, 2022, is the alleged fact that IPA and Defendants received threatening letters 19 from Plaintiff around that time. Unless Defendants can present something more than the 20 January 31, 2022, written agreement and the January 12, 2022, Berkadia cease and desist 21 letters, the Defendants and IPA may not invoke the “common interest” or “joint defense” 22 rules prior to January 31, 2022, to except disclosures. 23 Conclusion 24 The Plaintiff submits that the Defendants’ and IPA’s discovery abuses warrant good 25 cause to extend discovery. For example, Plaintiff complains it has had to pursue discovery 26 of Defendants’ emails by subpoena to CBRE. It has similarly had difficulty discovering 27 the Phantom Stock Agreement from A. Wadlund, but Plaintiff fails to recognize that as a 28 partner to the H&P-Berkadia sale, it also had a copy of the Phantom Stock Agreement 1 which it cannot find. The Phantom Stock Agreement has been recently obtained from 2 H&P’s attorneys in response to a subpoena. (Sur sur-reply (Doc .187) at 3.) 3 On June 16, 2023, Plaintiff filed an additional Motion to Compel seeking the 2012 4 tax return for A. Wadlund. Plaintiff submits that on April 11, 2023, Mr. Hendricks testified 5 at his deposition that the Phantom Stock Appreciation Units did not represent deferred 6 compensation to A. Wadlund; H&P never withheld or deferred compensation for A. 7 Wadlund. On April 24, 2023, Plaintiff asked for A. Wadlund’s 2012 federal and state tax 8 returns “because A. Wadlund’s tax returns would show whether he treated the Closing 9 Bonus and Closing Phantom Stock Award Payment as income, suggesting it was deferred 10 compensation, or as capital gains, showing it was for the sale of his stock in H&P.” (MC 11 (Doc. 185) at 3 (citing Ex. 4, P 2nd Supp. Doc. Request (Doc. 185-1)). 12 A. Wadlund argues that he was not an owner of H&P, and proceeds related to the 13 Phantom Stock were a type of compensation owed him and not related to the sale of H&P 14 to Plaintiff; he was not an owner or shareholder and not an employee; “he was only an 15 independent contractor who was owed money by Hendricks for deferred compensation.” 16 (Resp. to MC 2012 Tax Returns (Doc. 186) at 5.) There is no basis to support Plaintiff’s 17 assertion that the 8+ years duration and multi-state reach of the restrictive covenant was 18 necessary to protect Berkadia’s good will because as a matter of law both are excessive 19 and unenforceable. Id. at 5-6. 20 Defendants have not, however, filed a dispositive motion challenging the 21 enforceability of the restrictive covenant as a matter of law. The claim remains and 22 discovery is relevant to establish reasonableness, including whether the restrictive 23 covenant was entered into in the context of the sale of the H&P business to the Plaintiff. 24 The 2012 tax returns are relevant to show whether A. Wadlund treated the Phantom Stock 25 proceeds in 2012 as income of capital gains: Tax returns are highly confidential materials; 26 public policy interests guard against disclosures of tax returns to encourage taxpayers to 27 file complete and accurate returns to ensure the tax laws function properly. (Resp. to MC 28 2012 tax returns (Doc. 186) at 6 (citing Premium Serv. Corp. v. Sperry Hutchinson Co., 1 511 F.2d 225, 229 (9th Cir. 1975)). The Court looks to whether there is a compelling need 2 for the tax return. Id. (citations omitted). 3 According to Plaintiff, the parties met and conferred regarding this document 4 request on May 24, 2023. (Motion to Compel 2012 Tax Return (MC 2012 Tax Return, Ex., 5 email Coss to Herz sent 5/26/2023 (Doc. 185-5)). At the meet and confer, Defendants’ 6 attorney reported that he had not asked A. Wadlund if he had the 2012 tax return. Plaintiff 7 offered to accept extensive redaction of the return or “attorney eyes only” limits to protect 8 confidentiality. (MC 2012 Tax Return (Doc. 185) at 3-4.) Plaintiff reports Defendants 9 rejected the limited disclosure of the 2012 tax return. Id. There were no further meet and 10 confer attempts to resolve this discovery. 11 In his Response, Defendant A. Wadlund submits that “‘[h]is 2012 tax return will 12 show that he did not have any capital gains income from Hendricks & Partners in 2012, 13 and he is prepared to supply the capital gains section of his 2012 tax return to the Court for 14 in camera review, showing that he had no capital gains income in 2012 from Hendricks & 15 Partners and that the Phantom Stock Appreciation Award Units were not paid as capital 16 gains.” (Resp. to MC 2012 Tax Returns (Doc. 186) at 8 (quoting (Resp. MC (Doc. 166) at 17 16-17.) In other words, A. Wadlund proposes responding to the discovery request with an 18 admission and review in camera by the Court. 19 The Response was filed on June 18, 2023, two days after the Plaintiff filed the 20 Motion to Compel Production of Defendant Arthur R Wadlund’s 2012 Tax Returns on 21 June 16, 2023. The Plaintiff sought this discovery, pursuant to a Second Supplemental 22 Request for Documents on April 24, 2023. On May 24, 2023, Defendant A. Wadlund 23 responded and objected to disclosing the tax return. The parties met and conferred the same 24 day as noted above. The Court makes this record not to resolve the merit of the discovery 25 dispute, which has been worked out by the parties pursuant to Plaintiffs offer to accept 26 limited discovery and Defendant A. Wadlund’s agreement to make a party admission in 27 lieu of disclosing his tax return. Instead, the Court makes the record as an example of the 28 discovery abuses in this case by all parties which have resulted in repeated and unnecessary 1 wastes of judicial resources. Given Plaintiff’s willingness to accept limits to protect 2 confidentiality in the disclosure of A. Wadlund’s 2012 tax return, meaningful and good 3 faith meetings to confer should have resolved this when Plaintiff sought the discovery in 4 May within an equally short period of time, 2 days, as it was resolved after Plaintiff filed 5 the Motion to Compel in June. 6 The Court finds that the discovery disputes between the parties reflect zealousness 7 by Plaintiff and resistance from Defendants without the cooperation from both sides that is 8 needed to complete discovery. It leaves the Court with a clear sense that neither party is 9 acting in good faith, as is evident from the limited relief granted herein that completes all 10 discovery in this case. 11 For text messages, the Plaintiff shall provide Defendants with text messages 12 identified as incomplete partial disclosures of more involved communications, and 13 Defendants shall conduct comprehensive searches of their test messages in the context of 14 these specific communications. Defendants shall search for and disclose text messages for 15 communications with CBRE. 16 For payments by IPA to Defendants, C. Wadlund shall produce his bank statements 17 to Plaintiff. 18 For allegedly improper communications with Plaintiff’s clients post-IPA 19 employment by Defendants, Plaintiff shall provide a list of clients it asserts are at issue and 20 Defendants shall produce, if not already produced, all communications with such clients 21 after leaving Berkadia until January 10, 2023. If not already disclosed, the Defendants shall 22 produce contact information for property owners that Defendants have asked to sign letters 23 of support, who Defendants have disclosed as possible witnesses. 24 Defendants shall disclose communications that have been excepted under the Joint 25 Defense Agreement entered on January 31, 2022, unless they can provide some evidence 26 that the parties entered into this agreement on January 12, 2023. 27 The rulings by the Court to resolve these four discovery disputes have not involved 28 questions of law that needed to be decided by the Court. Relevancy was not seriously 1 challenged. Instead, the parties are at odds as to whether full disclosure was attained. The 2 Court finds that with even a small degree of good faith cooperation on both sides, these 3 discovery disputes could have and should have been resolved by the parties without judicial 4 involvement. The Court will grant the motion in part and deny it in part, pursuant to Fed. 5 R. Civ. P. 37(5)(C), and will not apportion reasonable expenses for the motion beyond 6 where they have fallen. 7 Accordingly, 8 IT IS ORDERED that the Motion to Compel (Docs. 152 (Redacted),164 (Sealed)) 9 is GRANTED IN PART AND DENIED IN PART, as follows: 10 1. The Plaintiff shall provide Defendants with text messages identified as 11 incomplete partial disclosures of more involved communications, and 12 Defendants shall conduct comprehensive searches of their test messages in the 13 context of these specific communications. Defendants shall search for and 14 disclose text messages for communications with CBRE. 15 2. C. Wadlund shall produce his bank statements to Plaintiff. 16 3. Plaintiff shall provide a list of clients it asserts are at issue and Defendants shall 17 produce, if not already produced, all communications with such clients after 18 leaving Berkadia until January 10, 2023. If not already disclosed, the Defendants 19 shall produce contact information for property owners that Defendants have 20 asked to sign letters of support, who Defendants have disclosed as possible 21 witnesses. 22 4. Defendants shall disclose communications that have been excepted under the 23 Joint Defense Agreement entered on January 31, 2022, unless they can provide 24 some evidence that the parties entered into this agreement on January 12, 2023. 25 IT IS FURTHER ORDERED that within seven days of the filing date of this 26 Order, Defendants shall file in camera any evidence beyond that submitted in opposition 27 to the Motion to Compel to establish the January 12, 2023, effective date of the Joint 28 Defense Agreement. 1 IT IS FURTHER ORDERED that the Motion to Compel Defendant A. Wadlund’s 2012 Tax Return (Docs. 181 (Redacted),185 (Sealed)) is DENIED AS MOOT because A. || Wadlund agrees to establish the requisite facts by admission. 4 IT IS FURTHER ORDERED that within seven days of the filing date of this 5 || Order, A. Wadlund shall produce the admission and file the tax return in camera with the || Court. 7 IT IS FURTHER ORDERED that the Motion to Extend Discovery (Docs. 152 8 || (Redacted),164 (Sealed)) is GRANTED for 30 days from the filing date of this Order for the sole purpose of completing the discovery provided for in this Order. All other discovery 10 || has ended. It remains the directive of this Court that dispositive motions shall be due after 11 || the close of discovery. 12 IT FURTHER ORDERED that in the future in this case, “certification” shall mean 13 || accompanying documentation of all proposed meetings for conferences up through the 14]| actually held meeting, telephonic or in-person, between the parties. The parties shall 15 || proceed to meet and confer in the future without judicial assistance, fully document the || scheduling of the meet and confer and that it has been held, before contacting the Court. 17 Dated this 29th day of August, 2023. 18 1 Ce LE Aaegamses 20 Honorable Cin . J6fgenson United States District Judge 21 22 23 24 25 26 27 28
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