Caisson Corp. v. County West Building Corp.

62 F.R.D. 331, 18 Fed. R. Serv. 2d 1289, 1974 U.S. Dist. LEXIS 9074
CourtDistrict Court, E.D. Pennsylvania
DecidedApril 9, 1974
DocketCiv. A. No. 42054
StatusPublished
Cited by44 cases

This text of 62 F.R.D. 331 (Caisson Corp. v. County West Building Corp.) is published on Counsel Stack Legal Research, covering District Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Caisson Corp. v. County West Building Corp., 62 F.R.D. 331, 18 Fed. R. Serv. 2d 1289, 1974 U.S. Dist. LEXIS 9074 (E.D. Pa. 1974).

Opinion

MEMORANDUM

CLIFFORD SCOTT GREEN, District Judge.

The plaintiff and judgment creditor in this action, Caisson Corporation, moves the Court pursuant to Rule 37 (a) of the F.R.Civ.P. for an order requiring Jack W. Blumenfeld to answer certain questions propounded to him during the course of his deposition.

The plaintiff, on May 26, 1970, obtained a judgment against defendant in the sum of $12,569.64, plus interest and costs. The judgment remains unsatisfied, because County West Building Corporation has no assests; plaintiff has undertaken discovery in aid of execution. 'Plaintiff has had discovery against the defendant and the present controversy involves the deposition of Jack W. Blumenfeld, sole stockholder of defendant, in an attempt to discover assets of defendant upon which plaintiff may levy in order to satisfy its judgment.

F.R.Civ.P. 69(a) provides in pertinent part that:

“In aid of the judgment or execution, the judgment creditor or his successor in interest when that interest appears of record, may obtain discovery from any person, including the judgment debtor, in the manner provided in these rules or in the manner provided by the practice of the state in which the district court is held.”

At the deposition, Mr. Blumenfeld on advice of counsel refused to answer the following questions:

(1) Would you name those corporations (whose principal place of business is 1974 Sproul Road, Broomall) ?

(2) Mr. Blumenfeld, how many corporations are you an officer or director in?

(3) What other corporations had their principal place of business at Copper Beach Club Apartments ?

(4) Is Mr. Ferngold an officer in any corporations in which you are a major shareholder ?

(5) Do you have (any) relationship with the general contractors other than having employed them to build at 15th and Locust Streets ?

(6) What other buildings is Jack Blu-menfeld & Company constructing presently ?

(7) Does Jack Blumenfeld & Company own any land ?

(8) Does Jack Blumenfeld & Company have a bank account?

[333]*333The plaintiff requests the court to order Mr. Blumenfeld to answer the questions noted above and “other questions propounded to him that concern the interrelation of the assets, management and finances of County West Building Corporation with Jack W. Blumenfeld, Jack W. Blumenfeld and Co., and other business enterprises of Jack W. Blumenfeld.” The deponent requests we order that he need not answer the specific questions objected to nor “any questions propounded to him that concern his ownership of, interest in, or employment by corporations other than defendant, or any corporation involved in the construction of the Berwyn Apartments.”

Plaintiff points out that the scope of discovery under F.R.Civ.P. 26(b)(1) extends to any non-privileged matter which is relevant to the matter involved in the pending action even if not admissible in and of itself if reasonably calculated to lead to such evidence. However, the court has broad power under 26(c) to control discovery for good cause to protect a person from embarrassment, oppression, or harassment. Moreover, the limits of the concept of relevancy in connection with discovery in aid of execution of judgment, as here, must be somewhat different as a result of the fact that there is no longer an action pending which may be utilized by reference to its subject matter to assist in definition of the scope of discoverable matter.

Plaintiff asserts that its inquiry is promoted by the “intimate relationship” between the defendant corporation and the deponent. It claims that because of loans and commingling of assets generally between defendant corporation, the deponent, and other business entities with which the deponent is involved, it may be able to levy on such assets to satisfy its judgment against the defendant corporation. Further, plaintiff asserts that the defendant corporation may not even have had a separate legal existence distinct from the deponent so that deponent’s assets may be subject to levy to satisfy its judgment.

Defendant states that there is no basis in fact for paintiff’s assertion of entanglements and that it seeks to pierce the corporate veil prior to establishing its right to do so. To the extent that plaintiff seeks to determine the extent of commingling of assets, defendant suggests plaintiff need only ask what assets were commingled.

The factual background of this ease as derived from the deposition of Mr. Blu-menfeld is helpful in resolving the present controversy.

The controversy between plaintiff and defendant arose out of construction of the Berwyn Apartments. County West 'Building Corporation was the general contractor on the project and Caisson Corporation was a subcontractor. A dispute arose between these parties under their contract and judgment was rendered for Caisson Corporation as indicated above.

Jack Blumenfeld is the sole shareholder of County West and was, at one time, its president and, at present, is an officer although he is apparently not sure exactly of what type. Jack Blumenfeld owned and still does own the land on which the Berwyn Apartments were erected and owns the apartments themselves. Mr. Blumenfeld hired County West Corporation as the general contractor to build the apartments. County West Corporation employed Mr. Blumen-feld in a supervisory capacity and paid him a salary although there was no signed employment contract. Mr. Blu-menfeld was involved in the planning of the Berwyn Apartments; was involved in negotiations with County West and Caisson Corporation in regard to their construction; and oversaw, in part, the construction of the Berwyn Apartments.

Mr. Blumenfeld selected the directors of County West, one of whom was Alan Feingold, who was identified by Mr. Blumenfeld as being familiar with the [334]*334County West accounting procedures. Mr. Blumenfeld signed checks for County West; and, at the deposition, reference was made to checks from County West both to Jack Blumenfeld, for substantial funds identified as probably for loans, and a check and transfer of funds to Oak Hill Homes, Incorporated which is a corporation which Mr. Blumenfeld is “essentially in charge of” for services rendered and possibly a loan.

There is scant authority concerning the permissible scope of discovery against third persons under Rule 69. Under this Rule, discovery may be had of the judgment debtor or third persons without separate suit and, if discovery is pursued under the federal rules, as in this case, all the discovery devices of the Rules may be used as in the progress of the action. All agree that the judgment creditor must be given the freedom to make a broad inquiry to discover hidden or concealed assets of the judgment debtor. Monticello Tobacco Co., Inc. v. American Tobacco Co., 12 F.R.D. 344 (S.D.N.Y.1952), aff’d on merits, 197 F. 2d 629 (2nd Cir. 1952), cert. denied, 344 U.S. 875, 73 S.Ct. 168, 97 L.Ed. 678 (1958); 7 Moore’s Federal Practice § 69.05(1) (1974); 12 Wright and Miller, Federal Practice and Procedure § 3014 (1973). However, the judgment debtor and third persons can seek a protective order against abuse of the discovery process. Generally, it is said that the inquiry must be kept pertinent to the goal of discovering concealed assets of the judgment debtor and not be allowed to become a means of harassment of the debtor or third persons. Monticello Tobacco Co., Inc. v.

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62 F.R.D. 331, 18 Fed. R. Serv. 2d 1289, 1974 U.S. Dist. LEXIS 9074, Counsel Stack Legal Research, https://law.counselstack.com/opinion/caisson-corp-v-county-west-building-corp-paed-1974.