Driscoll v. Shuttler

115 F.R.D. 571, 1987 U.S. Dist. LEXIS 3892
CourtDistrict Court, N.D. Georgia
DecidedMay 1, 1987
DocketCiv. A. Nos. C85-4615A, C85-4635A and C85-4636A
StatusPublished

This text of 115 F.R.D. 571 (Driscoll v. Shuttler) is published on Counsel Stack Legal Research, covering District Court, N.D. Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Driscoll v. Shuttler, 115 F.R.D. 571, 1987 U.S. Dist. LEXIS 3892 (N.D. Ga. 1987).

Opinion

ORDER

ROBERT H. HALL, District Judge.

This case involves a suit by investors bringing federal securities and state fraud claims against the entities involved in marketing investor herds of breeding cattle including the alleged principals, their underwriters, accountants and attorneys. The crux of the action is that plaintiffs allege that while defendants sold them herds consisting of seven female animals for either $27,000 or $31,500 cash per herd plus an additional $69,900 or $81,550 per herd paid in promissory notes, the same animals were purchased by defendant Lovana Farms, Inc. from defendant Lovell Cattle Company for approximately $600 each.

Defendant Lovana Farms, Inc. began marketing investor herds in approximately 1978. The Internal Revenue Service allegedly began investigating Lovana Farms Inc. in 1981 and disallowed as abusive those tax shelters derived from the investments. In 1983, Virgil Lovell, owner and manager of defendant Lovana Farms, Inc., was arrested and charged with paying a bribe to an I.R.S. agent for the purpose of influencing the I.R.S. investigation of Lovana Farms, Inc. investments. He has allegedly admitted this charge.

Plaintiff alleges that defendant FSC Securities was the underwriter who marketed Lovana Farms herd programs from 1978 to 1982. Plaintiff also alleges that FSC Securities created an “investor committee” which, in 1984, recommended to investors that they resell their herds to Lovana Farms, Inc. and release Lovana Farms from its obligations in exchange for cancellation of their indebtedness to Lovana [573]*573Farms in the form of the promissory notes. Currently before the court is plaintiffs’ motions to compel several items of discovery from the various defendants.

DISCUSSION

As a preliminary matter, the court notes the unnecessary delay caused by the parties in this case. Before the current discovery dispute was submitted to the court, the discovery deadline had been extended three times. Moreover, the parties have required several extensions to respond to discovery requests and substantive motions.

As regards the current motions to compel, many of plaintiffs’ objections raised here were known to plaintiffs months before their motions were filed. The court recognizes that the Federal Rules of Civil Procedure as well as the Local Rules of this Court are designed to encourage solutions to discovery disputes by cooperation of the parties. The Local Rules require only that a party move to compel just prior to the expiration of discovery. Local Rule 225-4(d). However, it appears that plaintiffs were aware that the discovery disputes which form the basis of the current motions had reached the point of irreconcilability far in advance of the discovery deadline. Plaintiffs nevertheless waited until the end of the expiration of discovery to bring the matter to this court’s attention. The court also notes that in some of the instances of which plaintiffs complain, plaintiffs failed to fulfill its obligations under Local Rule 225-4(a) to confer with the appropriate opposing counsel in order to facilitate resolution of the disputed discovery issues. The court believes all parties should take note for future matters in this case, that the court will closely scrutinize each party’s actions for improper delay and other impropriety and will not hesitate to swiftly sanction any such misbehavior.

A. Plaintiffs’ Motion to Compel Discovery Against FSC Securities Corp.

Plaintiffs move to compel an answer to a question posed at the deposition of Thomas Hutchins, the Rule 30(b)(6) representative of defendant FSC Securities. Plaintiffs’ counsel examined Hutchins on the subject of the 1984 mutual release agreement negotiated by the “investor committee.” Plaintiffs allege that the release expressly names “the underwriters and their registered representatives” as released parties. Hutchins testified that Lovana Farms, Inc. had produced a proposed or draft release. Plaintiffs’ counsel sought to elicit what changes were made in the release language as between the Lovana draft and the final release.

Hutchins responded that some changes were made but that counsel had instructed him that any conversations Hutchins had with attorneys resulting in changes to the release were privileged communication. Hutchins admitted that there were no changes made to the pertinent paragraph other than those suggested by counsel.

Subsequently, plaintiffs tried to establish whether the draft document included “underwriters and their registered representatives” in the list of people released by the paragraph. Defendant FSC entered an objection on the ground that such inquiry violates the attorney-client privilege because the answer could lead to disclosure of conversations between attorney and client concerning the changes.

Plaintiffs argue that “the differences between an undiscovered (perhaps now nonexistent) document delivered to FSC Securities Corp. by Lovana Farms, Inc. and a document presented to plaintiffs [in this case], may ... reveal what FSC Securities Corp’s attorneys had recommended to that company. But that Lovana Farms, Inc. document was not privileged and neither was the final version of it.” Defendant FSC admits as much. Defendant FSC’s Response at 4. However, to the extent plaintiffs’ question to Hutchins can be construed as inquiring as to advice of counsel in preparation of the release, such communication is privileged absent an applicable exception to the attorney-client privilege. United States v. Hankins, 631 F.2d 360, 365 (5th Cir.1980).

[574]*574Plaintiffs seem in their motion to contend that the “crime/fraud” exception to the attorney-client privilege applies. However, plaintiffs have failed at hearing and in their pleadings filed in support of the motions to compel to show the court facts sufficient to satisfy the threshold prima facie case of fraud necessary for application of the exception. In re International Systems and Controls Corp. Securities Litigation, 693 F.2d 1235, 1242 (5th Cir. 1982) citing In re Grand Jury Proceedings in Matter of Fine, 641 F.2d 199, 203 (5th Cir.1981) (pleadings alone are not evidence to create a prima facie case); see generally Clark v. United States, 289 U.S. 1, 15, 53 S.Ct. 465, 469, 77 L.Ed. 993 (1933). For these reasons, the court DENIES plaintiffs’ motion to compel against defendant FSC.

B. Plaintiffs’ Motion to Compel Discovery Against Defendant Overcash, Alsup & Co.

During the time period relevant to this case, defendant Overcash, Alsup & Co. allegedly provided accounting services to defendants Lovana Farms, Inc. and Lovell Cattle Company.

In support of this motion, plaintiffs contend they should be entitled to discovery documents concerning Overcash, Alsup’s activities with the other defendants pertaining to programs which preceded those involving plaintiffs. However, plaintiff’s own document request states:

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Bluebook (online)
115 F.R.D. 571, 1987 U.S. Dist. LEXIS 3892, Counsel Stack Legal Research, https://law.counselstack.com/opinion/driscoll-v-shuttler-gand-1987.