Constitution Bank v. Levine

151 F.R.D. 278, 1993 U.S. Dist. LEXIS 12718, 1993 WL 409534
CourtDistrict Court, E.D. Pennsylvania
DecidedSeptember 14, 1993
DocketCiv. A. No. 92-2192
StatusPublished
Cited by3 cases

This text of 151 F.R.D. 278 (Constitution Bank v. Levine) 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
Constitution Bank v. Levine, 151 F.R.D. 278, 1993 U.S. Dist. LEXIS 12718, 1993 WL 409534 (E.D. Pa. 1993).

Opinion

MEMORANDUM AND ORDER

O’NEILL, District Judge.

Currently before the Court are a number of discovery motions, which I address seria-tim.

A. Motions to Compel Filed by Plaintiff

On May 4, 1993, this Court granted plaintiffs motion for leave to file a second amended complaint. The second amended complaint, inter alia, added Todd Levine as a defendant to this action. It alleges that Todd Levine prepared fraudulent personal financial statements for his parents and received fraudulently transferred assets from his father Paul Levine.

On July 28, 1993, plaintiff filed a petition for contempt, sanctions and award of attorneys’ fees against defendants Paul Levine and Todd Levine. Essentially, plaintiff contends that defendants’ refusal to comply with this Court’s Order dated June 29, 1993 granting plaintiffs motion for expedited production of documents pertaining to BKT, Inc. (“BKT”) constitutes contempt. It asks the Court to declare the Levines in contempt of Court, to order defendants to produce the requested documents pertaining to BKT, Inc. and to award plaintiff costs, expenses and fees for its efforts incurred in filing its petition.

Defendant responds that plaintiffs request for production on BKT is invalid because BKT is not a party to this litigation. It also asserts that because BKT is a corporate entity, plaintiff may not pierce the corporate veil to reach its officers and directors, who always have been members of the Levine family. See Exhibit E to plaintiffs petition (BKT’s annual filings with Florida listing Le-vines as officers and directors).

In its response opposing plaintiffs original motion for discovery, defendant offered similar arguments, which I rejected in issuing my Order on June 29, 1993. Accordingly, these arguments will not be considered herein.

Defendant’s arguments do not persuade me that they should not be sanctioned for failing to obey the Court’s Order. “The propriety of the discovery sought is not in issue at the time sanctions are being imposed under [Fed.R.Civ.P.] Rule 37(b).” Charles A an Wright and Arthur R. Miller, 8 Federal Practice and Procedure (1970), § 2289 at 791.

Fed.R.Civ.P. Rule 37 authorizes the Court to sanction a party for failing to comply with discovery. Rule 37(b)(2) states specifically:

If a party ... fails to obey an order to provide or permit discovery, including an order made under supervision subdivision (a) of this rule ..., the court in which the action is pending may make such orders in regard to the failure as are just, ...

The rule also provides that the Court may require the party failing to comply with the discovery order to pay reasonable expenses, including attorney’s fees, caused by the party’s failure to comply. Wright and Miller, 8 Federal Practice and Procedure, § 2289 at 792. Accordingly, I will grant plaintiffs petition for sanctions. Plaintiff may file and submit for the Court’s .consideration an itemization of expenses incurred by defendants’ failure to comply with discovery. Defendants may respond within ten days from filing.

The second motion before the Court is plaintiffs motion to compel production of documents and more specific responses to interrogatories from defendants Paul Levine and Marcia Levine. Plaintiffs motion details defendants’ failure to respond completely to plaintiffs request for production of documents dated February 19, 1993. Defendants respond generally the documents are not relevant to this case. I disagree. In addition, my review of defendants’ answers to plaintiffs second set of interrogatories leads me to conclude that defendants still have not answered adequately some interrogatories posed by plaintiff. Accordingly, I will grant plaintiffs motion to compel. [280]*280Plaintiff also has filed a motion to compel production of documents from defendant Todd Levine. Defendant objects to producing any of the documents requested because, he asserts, the documents are not relevant to this litigation. Defendant has not persuaded me that his position is correct given the broad definition of relevance articulated in Fed.R.Civ.P. Rule 26.1 The documents requested are financial records pertaining to transactions involving the Levines, who are the defendants in this suit over their allegedly fraudulent transactions. Accordingly, I will grant plaintiffs motion to compel.

B. Motions Pertaining to Subpoenas

On August 11, 1993, defendant Vincent Paletta, who is not represented by counsel, filed a motion to quash subpoenas issued to Chemical Bank and Michael Brock, also known as Michael Broccoliere. The Chemical Bank subpoena directed an officer in the bank’s office in Moorestown, New Jersey, to provide monthly bank statements from three accounts and the history of a $200,000 certificate of deposit in Paletta’s name. The Brock subpoena, which identified his address as a location in Summerdale, New Jersey, directs ed him to appear for a deposition and to produce documents pertaining to, inter alia, his business transactions with the defendants in this case. Both subpoenas were issued in the Eastern District of Pennsylvania.

Paletta objected to the subpoenas on the grounds that they violated the terms of a stay authorized by a bankruptcy court in Florida.2 He also asserted that “plaintiffs wrongful actions constitute an invasion of privacy and a blatant misuse of the discovery process.”

In its response, plaintiff asserted that the documents sought from the non-parties were relevant to its racketeering case against all defendants and that obtaining records from those entities did not constitute an action against Paletta. After reviewing both parties’ submissions, I agree with plaintiff. See In re Barsky, 11 B.R. 478, 480 (E.D.Pa.1981) (The subpoena “was not issued against the debtors but instead was directed to the debtors’ accountants, thereby placing the applicability of this section [the automatic stay provision of 11 U.S.C. § 362(a)] in doubt.”). Accordingly, I will deny defendant’s motion to quash.

On August 31, 1993, Paletta filed a similar motion to quash subpoenas issued to Joel Rosenberg, whose address was a location in Huntington Valley, Pennsylvania, and Waste Management of North America, Inc., a company with an office in Bensalem, Pennsylvania. The subpoenas directed Rosenberg and Waste Management to appear for depositions and to produce records relating to their business dealings with most of the defendants in this case. Both subpoenas were issued in the Eastern District of Pennsylvania. Again, I am not persuaded that defendant’s position is correct. Accordingly, I will deny defendant’s motion to quash.

Paletta’s conduct has prompted plaintiff to file a cross-motion requesting that this Court prohibit Paletta, who is appearing pro se, from filing a motion to quash in the future without first obtaining leave of the court. At this juncture, I am not persuaded that such a measure is necessary. Accordingly, I will deny plaintiffs cross-motion.

The dispute between the parties as to the validity of subpoenas obtained by plaintiff has prompted several non-parties to seek clarification of their obligations before this Court.

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Cite This Page — Counsel Stack

Bluebook (online)
151 F.R.D. 278, 1993 U.S. Dist. LEXIS 12718, 1993 WL 409534, Counsel Stack Legal Research, https://law.counselstack.com/opinion/constitution-bank-v-levine-paed-1993.