1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA
9 Kent Christensen, et al., No. CV-23-08509-PCT-KML
10 Plaintiffs, ORDER
11 v.
12 Leann Renee Galliway, et al.,
13 Defendants. 14 15 Plaintiffs Kent and Kara Christensen wish to amend their complaint to add Carl 16 Galliway as a defendant. (Doc. 94.) The parties also have a discovery dispute and request 17 certain case management deadlines be extended. As explained below, the request to add 18 Carl is granted, the subpoenas underlying the discovery dispute are permissible with 19 limitations, and the case management deadlines are modified. 20 I. Motion to Amend Complaint 21 Plaintiffs filed their initial complaint in July 2023. That complaint named Leann and 22 Carl Galliway as defendants. (Doc. 1.) Plaintiffs filed an amended complaint as a matter of 23 right in September 2023 naming the same two defendants. (Doc. 27.) The parties then 24 stipulated to plaintiffs filing a second amended complaint that again named Leann and Carl 25 Galliway as the only defendants. (Doc. 36 at 1.) The Galliways filed a motion to dismiss. 26 (Doc. 42.) On June 14, 2024, the court granted that motion in part. (Doc. 55.) As relevant 27 here, the court dismissed Carl as a defendant because the second amended complaint did 28 “not allege Carl Galliway participated in any of the tortious activity alleged against Leann 1 Galliway.” (Doc. 55 at 4.) While Carl “was allegedly a witness” to allegedly wrongful 2 actions by Leann, that was not sufficient to establish Carl “actively participated in or 3 authorized the alleged torts.” (Doc. 55 at 4.) The court granted leave to amend. 4 Plaintiffs filed a third amended complaint that attempted to fix some of the issues 5 that had resulted in the dismissal of claims. That complaint included additional factual 6 allegations regarding Carl’s involvement in the underlying events, but it did not identify 7 Carl as a defendant. (Doc. 58; Doc. 60-1 at 5, 11.) Leann filed another motion to dismiss 8 as well as an answer. (Doc. 61, 64.) On August 21, 2024, the court issued a case 9 management order establishing October 21, 2024, as the deadline for amending the 10 pleadings. (Doc. 74.) On August 30, 2024, the court denied Leann’s second motion to 11 dismiss. (Doc. 80.) 12 On October 21, 2024, plaintiffs filed a motion to amend their complaint to 13 “reinstate” Carl as a defendant. (Doc. 94 at 1.) Plaintiffs’ proposed fourth amended 14 complaint contains only two meaningful changes from the third amended complaint. First, 15 plaintiffs add an allegation that all acts described in the complaint “were performed on 16 behalf of and for the benefit of” Leann and Carl’s marital community. (Doc. 96-1 at 1.) 17 And second, plaintiffs add Carl “acted in concert” with Leann, knew Leann was breaching 18 her fiduciary duties, and “gave substantial assistance or encouragement to her.” (Doc. 96- 19 1 at 7.) Importantly, although the second amended complaint led to Carl’s dismissal, the 20 third amended complaint failed to name him as a defendant despite adding allegations that 21 “Leann Galliway and her husband Carl Galliway brought her ninety (90) year father Mark 22 Christensen to the law office of Robert C. Custis in Salem, Oregon for the purpose of 23 executing the First Amendment to the Christensen Loving Trust.” (Doc. 58 at 4.) The third 24 amended complaint also alleged Carl was “named as successor trustee of the Trust.” (Doc. 25 58 at 5.) As of the filing of the third amended complaint, it was plausible that Carl actively 26 participated or authorized Leann’s alleged torts rather than merely witnessing them. 27 Nonetheless, because plaintiffs’ request to amend the complaint was filed by the 28 deadline imposed by the case management order, the court need only apply the forgiving 1 standard under Federal Rule of Civil Procedure 15. Cf. Johnson v. Mammoth Recreations, 2 Inc., 975 F.2d 604, 607 (9th Cir. 1992). That standard requires that a “[r]equest[] for leave 3 to amend . . . be granted with extreme liberality.” Brown v. Stored Value Cards, Inc., 953 4 F.3d 567, 574 (9th Cir. 2020) (quotation marks and citation omitted). In determining 5 whether to grant leave to amend, the court must “consider several factors including undue 6 delay, the movant’s bad faith or dilatory motive, repeated failure to cure deficiencies by 7 amendments previously allowed, undue prejudice to the opposing party, and futility.” Id. 8 “[P]rejudice to the opposing party” is the most important of these factors. Id. 9 Plaintiffs have already amended their complaint in this case multiple times and have 10 not provided a convincing explanation for their delay in seeking to reinstate Carl as a 11 defendant. But there is no indication plaintiffs are acting in bad faith, nor any indication 12 Leann would suffer prejudice if Carl is reinstated. As already mentioned, the third amended 13 complaint added allegations of Carl’s involvement in some of the crucial events. In 14 addition, naming Carl as the possible beneficiary of the trust provides some indication Carl 15 was a willing participant in arranging for changes to the trust. Plaintiffs should have sought 16 to reinstate Carl as of the third amended complaint (shortly after he was dismissed) but the 17 “extreme liberality” the court must apply to plaintiffs’ request mandates they be allowed 18 to amend their complaint. The motion to amend is granted. 19 II. Motion to Quash 20 Plaintiffs sent subpoenas under Fed. R. Civ. P. 45 to three non-party limited liability 21 companies. Leann admits she is the “sole member of these LLCs.” (Doc. 98 at 2.) Leann 22 argues the subpoenas should be quashed because they are overbroad and demanded 23 compliance in an unreasonably short time. On the former point, Leann argues the 24 subpoenas are overbroad because they “seek more than documents, but also an 25 explanation” how the LLCs obtained their assets and the current value of those assets. 26 (Doc. 98 at 3.) In responding to the motion to quash plaintiffs state they are willing to work 27 with Leann regarding the response date. Plaintiffs also seem to admit they may be seeking 28 to require the creation of additional documents because the subpoenas seek “an 1 identification” of the assets held by the LLCs as well as “where the assets came from and 2 what they are worth.” (Doc. 102 at 3.) 3 Each of the subpoenas seeks production of the same information: 4 All documents and records related to the formation of the LLC; all assets of the LLC, including manner in which assets were 5 acquired and their current valuation; and all communications with defendants or their counsel regarding the Christensen 6 Loving Trust; and financial records including bank statements and tax records. 7 8 This language could be read as requiring the LLCs create new documents containing the 9 information plaintiffs seek. But it is well-settled “a non-party may be required to produce 10 records that already exist and are under the non-party’s control, but [Rule 45] does not 11 contemplate that a non-party will be forced to create documents that do not exist.” 12 Insituform Techs., Inc. v. Cat Contracting, Inc., 168 F.R.D. 630, 633 (N.D. Ill. 1996); see 13 also Rogers v. Giurbino, 288 F.R.D. 469, 485 (S.D. Cal. 2012) (“A party, however, is not 14 required to create a document where none exists.”). The subpoenas are therefore improper 15 to the extent they are demanding the LLCs create new documents. Instead, the subpoenas 16 are limited to pre-existing documents within the possession, custody, or control of the 17 LLCs.
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1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA
9 Kent Christensen, et al., No. CV-23-08509-PCT-KML
10 Plaintiffs, ORDER
11 v.
12 Leann Renee Galliway, et al.,
13 Defendants. 14 15 Plaintiffs Kent and Kara Christensen wish to amend their complaint to add Carl 16 Galliway as a defendant. (Doc. 94.) The parties also have a discovery dispute and request 17 certain case management deadlines be extended. As explained below, the request to add 18 Carl is granted, the subpoenas underlying the discovery dispute are permissible with 19 limitations, and the case management deadlines are modified. 20 I. Motion to Amend Complaint 21 Plaintiffs filed their initial complaint in July 2023. That complaint named Leann and 22 Carl Galliway as defendants. (Doc. 1.) Plaintiffs filed an amended complaint as a matter of 23 right in September 2023 naming the same two defendants. (Doc. 27.) The parties then 24 stipulated to plaintiffs filing a second amended complaint that again named Leann and Carl 25 Galliway as the only defendants. (Doc. 36 at 1.) The Galliways filed a motion to dismiss. 26 (Doc. 42.) On June 14, 2024, the court granted that motion in part. (Doc. 55.) As relevant 27 here, the court dismissed Carl as a defendant because the second amended complaint did 28 “not allege Carl Galliway participated in any of the tortious activity alleged against Leann 1 Galliway.” (Doc. 55 at 4.) While Carl “was allegedly a witness” to allegedly wrongful 2 actions by Leann, that was not sufficient to establish Carl “actively participated in or 3 authorized the alleged torts.” (Doc. 55 at 4.) The court granted leave to amend. 4 Plaintiffs filed a third amended complaint that attempted to fix some of the issues 5 that had resulted in the dismissal of claims. That complaint included additional factual 6 allegations regarding Carl’s involvement in the underlying events, but it did not identify 7 Carl as a defendant. (Doc. 58; Doc. 60-1 at 5, 11.) Leann filed another motion to dismiss 8 as well as an answer. (Doc. 61, 64.) On August 21, 2024, the court issued a case 9 management order establishing October 21, 2024, as the deadline for amending the 10 pleadings. (Doc. 74.) On August 30, 2024, the court denied Leann’s second motion to 11 dismiss. (Doc. 80.) 12 On October 21, 2024, plaintiffs filed a motion to amend their complaint to 13 “reinstate” Carl as a defendant. (Doc. 94 at 1.) Plaintiffs’ proposed fourth amended 14 complaint contains only two meaningful changes from the third amended complaint. First, 15 plaintiffs add an allegation that all acts described in the complaint “were performed on 16 behalf of and for the benefit of” Leann and Carl’s marital community. (Doc. 96-1 at 1.) 17 And second, plaintiffs add Carl “acted in concert” with Leann, knew Leann was breaching 18 her fiduciary duties, and “gave substantial assistance or encouragement to her.” (Doc. 96- 19 1 at 7.) Importantly, although the second amended complaint led to Carl’s dismissal, the 20 third amended complaint failed to name him as a defendant despite adding allegations that 21 “Leann Galliway and her husband Carl Galliway brought her ninety (90) year father Mark 22 Christensen to the law office of Robert C. Custis in Salem, Oregon for the purpose of 23 executing the First Amendment to the Christensen Loving Trust.” (Doc. 58 at 4.) The third 24 amended complaint also alleged Carl was “named as successor trustee of the Trust.” (Doc. 25 58 at 5.) As of the filing of the third amended complaint, it was plausible that Carl actively 26 participated or authorized Leann’s alleged torts rather than merely witnessing them. 27 Nonetheless, because plaintiffs’ request to amend the complaint was filed by the 28 deadline imposed by the case management order, the court need only apply the forgiving 1 standard under Federal Rule of Civil Procedure 15. Cf. Johnson v. Mammoth Recreations, 2 Inc., 975 F.2d 604, 607 (9th Cir. 1992). That standard requires that a “[r]equest[] for leave 3 to amend . . . be granted with extreme liberality.” Brown v. Stored Value Cards, Inc., 953 4 F.3d 567, 574 (9th Cir. 2020) (quotation marks and citation omitted). In determining 5 whether to grant leave to amend, the court must “consider several factors including undue 6 delay, the movant’s bad faith or dilatory motive, repeated failure to cure deficiencies by 7 amendments previously allowed, undue prejudice to the opposing party, and futility.” Id. 8 “[P]rejudice to the opposing party” is the most important of these factors. Id. 9 Plaintiffs have already amended their complaint in this case multiple times and have 10 not provided a convincing explanation for their delay in seeking to reinstate Carl as a 11 defendant. But there is no indication plaintiffs are acting in bad faith, nor any indication 12 Leann would suffer prejudice if Carl is reinstated. As already mentioned, the third amended 13 complaint added allegations of Carl’s involvement in some of the crucial events. In 14 addition, naming Carl as the possible beneficiary of the trust provides some indication Carl 15 was a willing participant in arranging for changes to the trust. Plaintiffs should have sought 16 to reinstate Carl as of the third amended complaint (shortly after he was dismissed) but the 17 “extreme liberality” the court must apply to plaintiffs’ request mandates they be allowed 18 to amend their complaint. The motion to amend is granted. 19 II. Motion to Quash 20 Plaintiffs sent subpoenas under Fed. R. Civ. P. 45 to three non-party limited liability 21 companies. Leann admits she is the “sole member of these LLCs.” (Doc. 98 at 2.) Leann 22 argues the subpoenas should be quashed because they are overbroad and demanded 23 compliance in an unreasonably short time. On the former point, Leann argues the 24 subpoenas are overbroad because they “seek more than documents, but also an 25 explanation” how the LLCs obtained their assets and the current value of those assets. 26 (Doc. 98 at 3.) In responding to the motion to quash plaintiffs state they are willing to work 27 with Leann regarding the response date. Plaintiffs also seem to admit they may be seeking 28 to require the creation of additional documents because the subpoenas seek “an 1 identification” of the assets held by the LLCs as well as “where the assets came from and 2 what they are worth.” (Doc. 102 at 3.) 3 Each of the subpoenas seeks production of the same information: 4 All documents and records related to the formation of the LLC; all assets of the LLC, including manner in which assets were 5 acquired and their current valuation; and all communications with defendants or their counsel regarding the Christensen 6 Loving Trust; and financial records including bank statements and tax records. 7 8 This language could be read as requiring the LLCs create new documents containing the 9 information plaintiffs seek. But it is well-settled “a non-party may be required to produce 10 records that already exist and are under the non-party’s control, but [Rule 45] does not 11 contemplate that a non-party will be forced to create documents that do not exist.” 12 Insituform Techs., Inc. v. Cat Contracting, Inc., 168 F.R.D. 630, 633 (N.D. Ill. 1996); see 13 also Rogers v. Giurbino, 288 F.R.D. 469, 485 (S.D. Cal. 2012) (“A party, however, is not 14 required to create a document where none exists.”). The subpoenas are therefore improper 15 to the extent they are demanding the LLCs create new documents. Instead, the subpoenas 16 are limited to pre-existing documents within the possession, custody, or control of the 17 LLCs. 18 Narrowed to existing documents, the subpoenas seek discoverable information. As 19 for the date by which the LLCs must produce the documents, the parties must confer and 20 agree upon an appropriate due date. 21 III. Motion to Extend Case Management Deadlines 22 The parties jointly request the court extend the deadlines for the completion of fact 23 discovery, expert depositions, dispositive motions, and good faith settlement talks. (Doc. 24 101.) This case was filed in July 2023 and the court’s practice is to ensure dispositive 25 motions are briefed by the two-year anniversary of the filing of the initial complaint. Here, 26 the parties propose the dispositive motion deadline be moved to April 30, 2025. That 27 deadline is consistent with the court’s practice, but the parties are warned that additional 28 extensions are unlikely. In addition, the parties propose a deadline for good faith settlement 1 talks after the deadline for dispositive motions. The parties must conduct settlement 2 discussions before, not after, the dispositive motion deadline. Therefore, the deadline for 3 settlement talks is moved up to shortly before the dispositive motion deadline. 4 IV. Only One Motion for Summary Judgment is Permitted 5 The case management order prohibits a party from filing “more than one motion for 6 summary judgment under Rule 56 of the Federal Rules of Civil Procedure without leave 7 of the Court.” (Doc. 74 at 6.) Despite this limitation, plaintiffs filed a motion for summary 8 judgment on August 23, 2024. Having reviewed that motion and being familiar with the 9 facts and legal issues in this case, plaintiffs would not be permitted to file a second motion 10 for summary judgment at the conclusion of discovery. To ensure plaintiffs have made a 11 knowing decision to forego a motion for summary judgment at the close of all discovery, 12 plaintiffs must file a statement indicating whether they wish to withdraw the pending 13 motion for summary judgment so that they may file a more comprehensive summary 14 judgment motion later. 15 Accordingly, 16 IT IS ORDERED the Motion to Amend (Doc. 94) is GRANTED. Within three 17 days of this order plaintiff shall file a clean copy of the fourth amended complaint. 18 IT IS FURTHER ORDERED the Motion to Quash (Doc. 98) is GRANTED IN 19 PART and DENIED IN PART as set forth above. 20 IT IS FURTHER ORDERED the Motion to Amend Scheduling Order (Doc. 101) 21 is GRANTED. The parties shall comply with the following dates. All other aspects of the 22 case management order remain in effect: 23 • Fact discovery shall be completed no later than March 31, 2025; 24 • Expert depositions shall be completed no later than March 31, 2025; 25 • Good faith settlement talks shall occur no later than April 15, 2025; 26 • Dispositive motions shall be filed no later than April 30, 2025. 27 / 28 / 1 IT IS FURTHER ORDERED no later than November 25, 2024, plaintiffs shall 2|| file a statement indicating if they wish to withdraw the pending motion for summary 3 || judgment. 4 Dated this 19th day of November, 2024. 5
CU do MK Honorable Krissa M. Lanham 8 United States District Judge 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
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