Brincko v. Rio Properties, Inc.

278 F.R.D. 576, 2011 U.S. Dist. LEXIS 139692, 2011 WL 6029680
CourtDistrict Court, D. Nevada
DecidedDecember 2, 2011
DocketNo. 2:10-cv-00930-PMP-PAL
StatusPublished
Cited by5 cases

This text of 278 F.R.D. 576 (Brincko v. Rio Properties, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Nevada primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Brincko v. Rio Properties, Inc., 278 F.R.D. 576, 2011 U.S. Dist. LEXIS 139692, 2011 WL 6029680 (D. Nev. 2011).

Opinion

ORDER

(Mot. Compel — Dkt. #200)

PEGGY A. LEEN, United States Magistrate Judge.

Before the court is Defendant Rio Property, Inc.’s Notice of Motion and Motion to Compel Deposition of Robert Leahy, and to Grant Sanctions Against the Trustee; Memo[578]*578randum of Points and Authorities in Support Thereof (Dkt. # 200). The court has considered the Motion, Memorandum of Points and Authorities in Opposition (Dkt. #208), and Rio’s Reply (Dkt. # 210).

BACKGROUND

The motion seeks an order compelling Plaintiffs expert, Robert Leahy, to appear and answer questions at a second session of his deposition that he was instructed not to answer at his July 31, 2011, deposition. The motion asserts that counsel for the Trustee instructed Mr. Leahy to refuse to answer a number of questions, although no attorney-client privileged information was sought, and no attorney-client privileged objections were made. Rather, counsel for the Trustee instructed Mr. Leahy not to answer questions because he was “uncomfortable” having the witness answer questions on a subject which counsel for the Trustee was not sufficiently familiar. Rio has also filed a Daubert motion asserting Mr. Leahy should not be permitted to testify as an expert which is currently pending before the district judge. However, if the motion is denied and Mr. Leahy is permitted to testify, Mr. Leahy will opine that Rio employees working in the cashier’s cage and in another areas of its Sports Book should have figured out that Salvatore “Sam” Favata (“Favata”) was looting money from the National Consumer Mortgage (“NCM”) and/or its investors because Favata presented a series of high-value cashier’s checks from nationally recognized banking institutions. Rio learned that while Leahy was an executive at Myriad Entertainment & Resorts (“Myriad”), Mr. Leahy apparently failed to uncover a “massive fraud” perpetrated at Myriad. Rio attempted to ask him questions concerning this experience at Myriad, believing it is clearly relevant to his proffered testimony in this case. Counsel for the Trustee instructed him not to answer questions, including foundational questions, such as whether he was represented by counsel in connection with that matter. Rio argues this violated Rule 30(c)(2), and that Mr. Leahy should be compelled to answer questions and that the Trustee and/or his counsel should be ordered to pay fees and expenses related to the reexamination of the witness.

After the deposition concluded, counsel for Rio wrote to counsel for the Trustee requesting a telephonic meet-and-confer concerning the instructions not to answer, and inquiring whether the Trustee would agree to make Mr. Leahy available for a continuation of his deposition at the Trustee’s expense. Counsel engaged in extensive written communications and phone conversations, but the Trustee continues to refuse to make Mr. Leahy available for a continuation of his deposition.

Sanctions are appropriate in this case, it is argued, because counsel for the Trustee’s improper instructions not to answer impeded, delayed and frustrated Rio’s inquiry regarding a relevant topic. Specifically, Mr. Leahy has offered to opine that the Rio should have uncovered Mr. Favata’s fraudulent activities. In his expert report, Mr. Leahy specifically references his work for Myriad as one of the bases that qualifies him as an expert in the field of appropriate due diligence at casino companies. While Mr. Leahy was an executive at Myriad, Rio asserts a “massive fraud” was perpetrated there which Leahy failed to uncover. Under these circumstances, Mr. Leahy’s experiences at Myriad are “fair game, particularly any experiences with respect to due diligence and any allegedly fraudulent activities that he failed to uncover.” Sanctions are authorized under Civil Rule of Civil Procedure 30(d)(2), and the Trustee’s improper instructions forced Rio to incur needless expense to file this motion. Additionally, if the motion is granted, Rio will incur additional unwarranted expenses to depose Mr. Leahy a second day which would not have been incurred if the Trustee had simply allowed Mr. Leahy to answer Rio’s questions.

The Plaintiff Trustee opposes the motion asserting Mr. Leahy was engaged as an expert witness to “analyze whether the Rio’s management properly identified, reviewed and analyzed” Sam Favata’s gaming transactions between 2003, and 2006. During this period of time, Favata bet almost ten million dollars at Rio’s Race and Sports Book. The money was pilfered from victims of his Ponzi scheme. Mr. Leahy’s report provided charts and analyses of Favata’s gaming patterns [579]*579over a four-year period. His report opines that Favata engaged in unusual gaming behavior, and offers opinions concerning “what due diligence he believed casino management had an obligation to undertake from a financial perspective in such circumstances.”

During Mr. Leahy’s deposition, counsel for Rio questioned Mr. Leahy about an unrelated, ongoing dispute between his former employer, Myriad, and Carl Grein, a potential investor who Myriad contends defrauded it out of approximately $170,000.00. Rio’s counsel asked Mr. Leahy whether, in his opinion, Myriad conducted an adequate investigation into Mr. Grein’s background to insure that he could finance the project. The Trustee’s counsel was unaware of the Grein action and had no connection with it. Counsel for the Trustee argues that Mr. Leahy, who was the Executive Vice President of Finance of Myriad, had worked with Myriad’s counsel in connection with the Grein action as a fact witness. Mr. Leahy was concerned about his responsibilities to Myriad as well as what privileges may or may not be implicated in his testimony about the Grein action in this case. Counsel for the Trustee indicates that he cannot address those questions, but that Myriad’s counsel can. Counsel for the Trustee asserts that, at the request of Mr. Leahy and Myriad’s counsel, he has “asked that counsel for Myriad be involved to the extent of questions about the Grein action.” Rio refused to contact counsel for Myriad because Myriad’s counsel has not been admitted pro hac vice or made a special appearance in this action. Counsel for the Trustee and the witness, as well as Myriad’s counsel, requests that if the court directs the continuation of Mr. Leahy’s deposition, the deposition should be completed telephonieally, and Myriad’s counsel should be permitted to participate to interpose any objections to preserve Myriad’s privilege.

Counsel for the Trustee was not aware at the time of Mr. Leahy’s deposition that Myriad had filed a lawsuit against Carl Grein accusing him of stealing approximately $170,-00.00 from it under the guise of providing financing for a gaming project. When Mr. Leahy was asked whether, in his opinion, Myriad conducted an adequate investigation into Mr. Grein’s background to insure he could finance the project, counsel for the Trustee consulted with Mr. Leahy and learned that Leahy had worked with Myriad counsel in prosecuting the Grein matter. Mr. Leahy was concerned about any privileged information he might disclose, and counsel for the Trustee suggested Myriad’s counsel be consulted. Rio’s counsel took issue with this suggestion. Counsel for the Trustee suggested that the parties contact the court to get a definitive direction on how to proceed. However, counsel for Rio indicated he did not want to bother the judge and demanded that the questions be answered or that the deposition be terminated immediately.

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Bluebook (online)
278 F.R.D. 576, 2011 U.S. Dist. LEXIS 139692, 2011 WL 6029680, Counsel Stack Legal Research, https://law.counselstack.com/opinion/brincko-v-rio-properties-inc-nvd-2011.