Island Eye Center v. Lombard and Advanced Eyecare

• Court: Superior Court of Guam
• Decided: March 28, 2019
• Docket: CV0026-17
• Status: Unknown

Opinion

FILED 1 “! !fl: i!9 2

3 CO U RI r: 4

6 IN THE SUPERIOR COURT OF GUAM 7

8 ISLAND EYE CENTER, INC. dba ISLAND 9 EYE AND RETINA CENTER,

10 Plaintiff,

vs. Civil Case No. CV0026-17 11

12 PETER N. LOMBARD, M.D., ADVANCED DECISION AND ORDER EYECARE, LLC dba LOMBARD HEALTH, 13 DESIREE NEDEDOG, JOHN and JANE DOES 1 through 20, 14

15 Defendants. 16

17 INTRODUCTION 18 Defendant failed to produce documents Plaintiff requested, so Plaintiff now moves the 19 Court to compel their production. This matter is before the Honorable Michael J. Bordallo. 20 Island Eye Center, Inc. dba Island Eye and Retina Center (“Plaintiff’ or “IEC”) is represented 21

22 by Daniel J. Berman, Esq. of Berman O’Connor & Mann. Peter N. Lombard, M.D., Advanced

23 Eyecare, LLC dba Lombard Health, Desiree Nededog, John and Jane Does 1 through 20

24 (“Defendants” or if referring to Peter N. Lombard himself, “Lombard”) are represented by

25 attorney Delia Lujan Wolff of Lujan & Wolff, LLP. Having reviewed the arguments, the Court 26 hereby DENIES Plaintiffs Motion to Compel. Page lof 11 1 BACKGROUND

2 This matter arises out of Plaintiffs Motion to Compel Defendants to produce certain

financial documents and contracts. Plaintiff filed the Motion to Compel (“Motion”) on Nov. 6,

2018. Defendants filed an opposition (“Opposition”) to the Motion on Dec. 14, 2018. Plaintiff 5 filed a reply to the opposition on Dec. 28, 2018. This Court then took the matter under 6 advisement. 7 FACTS 8 1. On two separate occasions, Plaintiff requested from Defendants a total of 24 documents

or document sets. Each was assigned a number 1 through 24. In the first request (“First 10

11 Request”), Plaintiff requested Nos. 1-14. In the second request (“Second Request”),

12 Plaintiff requested Nos. 15-24.

13 2. Plaintiff stated in the body of the Motion that Defendants have not produced Nos. 8, 15,

14 16, 17, 18, 19, and 21. Plaintiff stated in the conclusion of the Motion that Plaintiff is

15 therefore entitled to an order compelling Defendants to produce the following 16 documents: 17 a. Lombard’s Gross Receipt Tax Returns, Annual Tax Returns, K-i Schedules, 18 Form 1099’s, balance sheets and December bank statements for years 2013, 19 2014, 2015, and 2016. 20 b. All contracts of Lombard with all other doctors, including but not limited to, Dr. 21 Marjorie DeBenedictus, and her Saint Lucy’s Eye Clinic. 22 c. Lombard’s balance sheet disclosing owner’s equity. 23

24 3. The documents in Nos. 8, 15, 16, 17, 18, 19, and 21 do not correspond exactly with the

25 documents Plaintiff moves the Court to compel in the Motion’s conclusion. For

26 example, in the Motion’s conclusion, Plaintiff moves the Court to order production of Page 2ofll 1 1099 Forms, but this is the first time Plaintiff has requested them. The 1099 Forms do

2 not appear in Sos. 1-24. Also, in the Motion’s conclusion, Plaintiff moves to compel

production of Lombard’s balance sheet disclosing owner’s equity. This request is also

not found in Sos. 1-24, but it was requested for the first time in an email to Defendants 5 on Aug. 11, 2018. Also, So. 8 requested contracts between other doctors and Lombard 6 Health, but in the Motion’s conclusion, Plaintiff moves to compel production of 7 contracts between other doctors and Lombard the individual, not Lombard Health. $ Defendants later highlighted this distinction and argued that as a result, they should not

have to produce contracts involving Lombard the individual. 10

4. In terms of background, Defendant Lombard, an eye doctor, worked part-time

12 moonlighting as a licensed ophthalmologist for Island Eye Center (“IEC” or “Plaintiff’)

13 starting on Aug. 9, 2010 and ending on Feb. 28, 2013, when his contract expired.

14 Lombard stated in a declaration that although his contract ended on Feb. 28, 2013, he

15 saw no patients and performed no services for IEC after May 12, 2012, and he received 16 his last paycheck from IEC on Sep. 25, 2012. 17 5. In 2015, Lombard opened his own clinic called Advanced Eyecare, having filed the 18 paperwork to form it as a limited liability company on Jan. 31, 2013. 19 6. On Jan. 17, 2017, IEC filed a complaint (“Complaint”) against Lombard accusing him of 20 poaching employees from IEC for his new clinic, breaching his contract with IEC, 21 misappropriating trade secrets from IEC, and other related complaints. 22 7. Two months later, Plaintiff made the First Request for discovery, Sos. 1-14, on Mar. 24, 23

24 2017. Two months after that, Plaintiff made the Second Request for discovery, Sos. 15-

25 24, on May. 30, 2017.

Page3ofll 1 8. The same day as the Second Request, Plaintiff ernailed Defendants to acknowledge that

2 although Defendants produced some of the 14 items in the first Request, they fell short

in producing others. Plaintiff alerted Defendants that these failures would require a

motion to compel, and Plaintiff requested a “meet and confer” to resolve the discovery 5 disputes. 6 9. Three weeks later, on June 20, 2017, the parties met to confer about the First Request 7 disputes. 8 10. Two days after the meeting, Plaintiff sent Defendants an email summarizing the

meeting. The email said that in the June 20 meeting, Defendant agreed to produce more 10

11 documents, and the parties clarified aspects of the discovery and discussed

12 compromises.

13 11. A month later, on July 18, 2017, Plaintiff emailed Defendants to acknowledge that while

14 Defendants produced some of the 10 items in the Second Request, they fell short in

15 producing others. Plaintiff again alerted Defendants that these failures would require a 16 motion to compel, and Plaintiff requested another meet and confer to resolve the 17 disputes. 18 12. The parties met to confer on Aug. 3, 2017. 19 13. A week later on Aug. 11, 2017, Plaintiff sent Defendants an email (“Aug. 11 Email”) 20 summarizing the Aug. 3 meeting. In the Aug. 11 Email, Plaintiff accused Defendants of 21 not properly responding to Nos. 15, 16, 17, 18, 19, and 20. In that list, it appears that 22 Plaintiff intended to put No. 21 instead of No. 20, since elsewhere in the filings, the 23

24 requests in question are consistently Nos. 15, 16, 17, 18, 19, and 21, always skipping

25 No. 20.

Page4ofll 1 14. The Aug. 11 Email stated that in the Aug. 3 meeting, Plaintiff suggested a compromise

2 that would cure all or nearly all of its unanswered discovery requests. The compromise

is that rather than require the documents in Nos. 15, 16, 17, 18, 19, and 21, Plaintiff

would accept instead a summary of Defendants’ Gross Receipts Tax (“GRT”) for the 5 period of Feb. 1, 2013 to Aug. 28, 2016. 6 15. Also in the Aug. 11 Email, Plaintiff made its first request for the balance sheet, 7 apparently independent of the compromise offer. 8 16. On Sep. 14, 2017, the parties held a third meet and confer.

17. On Apr. 6, 2018, the parties held a fourth meet and confer. 10 18. That same day, Apr. 6, 2018, Plaintiff emailed Defendants a summary of the Apr. 6

12 meeting. The email states that the parties discussed discovery and scheduling matters,

13 discussed depositions to be taken, and planned another meet and confer.

14 19. On Apr. 26, 2018, the parties held a fiflh meet and confer, and Plaintiff emailed

15 Defendants a summary of the meeting on Apr. 27, 2018 (“Apr. 27 Email”). In the email, 16 Plaintiff suggested a compromise similar to the one in the Aug. 11 Email. The 17 . . . .

compromise is that Plaintiff would accept a summary and/or compilation of Defendants’ 18 GRTs from January 2013 through Aug. 28, 2016 in place of the documents in Nos. 8, 19 14, 15, 16, and 17. This compromise offer is slightly different from the one in the Aug. 20 11 Email, in which Plaintiff offered to accept a GRT summary in place of Nos. 15, 16, 21 17, 18, 19, and 21 (assuming Plaintiff meant No. 21, not No. 20). 22 20. The Apr. 27 Email also states that Plaintiff proposed a template for a Joint Stipulated 23

24 Productive Order that would require Plaintiff to keep confidential any private or

25 proprietary business information in Defendants’ documents.

Page 5 of 11 1 21. On May 7,201$, Defendant informed Plaintiff via email (“May 7 Email”) that it would

2 agree to provide GRT summaries for Feb. 1, 2013 to Aug. 2$, 2016 as long as Plaintiff

produced GRT summaries for the same period and as long as Plaintiff agreed to a

stipulated protective order to protect Defendants’ information. 5 22. On Nov. 6, 2018, Plaintiff filed the instant Motion to Compel. 6 23. Later, on Nov. 27, 201$ the parties executed a joint stipulated protective order, and two 7 days after that, the Court ordered it into effect. This protective order requires Plaintiff to 8 protect Defendants’ confidential and proprietary business information, provide the

information only to certain specified individuals, use it only for purposes of this case, 10

and other similar agreements.

12 24. Defendants stated that on Dec. 5, 2018, one month after Plaintiff filed the Motion to

13 Compel, Plaintiff gave Defendants almost all of the GRT filings Defendants requested in

14 the May 7 Email. In the Opposition, Defendant stated that those GRT filings and the

15 stipulated protective order were sufficient for them to then be willing to give Plaintiff 16 their GRT information. In the Aug. 11 Email and the Apr. 27 Email, Plaintiff had stated 17 that Defendants’ GRT summaries would satisfy most or all of its discovery requests. 18 Defendant argues that this shows that Plaintiff could have resolved the discovery 19 disputes without involving the Court. 20 25. Defendant also argues that Plaintiff can obtain its desired information through less 21 intrusive means than through the documents Plaintiff moves to compel, especially 22 considering that Plaintiff agreed to accept the GRT summaries instead of those 23

24 documents.

Page 6otll 1 26. Also, Defendants state that No. 8 refers to contracts involving Lombard Health, not

2 Lombard the individual, so they argue that they shouldn’t have to produce contracts with

Lombard the individual.

27. In sum, it appears that Plaintiff has offered and is willing to accept Defendants’ GRT 5 summaries in place of the remaining unanswered requests. Plaintiff has given 6 Defendants all or nearly all of the GRT summaries Defendants requested, and 7 Defendants claimed to be satisfied. In turn, Defendants agreed to provide their GRT $ summaries to Plaintiff. Defendants have not yet done that, apparently awaiting the

outcome of this Motion. 10

28. Meanwhile, Defendants argue that Plaintiff has violated Civil Rule 37.1 of the Local

12 Rules of the Superior Court of Guam by not filing together with the Motion a written

13 stipulation specifying separately and with particularity each issue that is still disputed.

14 Defendants claim that Plaintiff never attempted to obtain a written stipulation about the

15 disputed discovery items and did not demonstrate good cause for that omission. Plaintiff 16 concedes that this is true but seeks to justify this omission as an acceptable response to 17 Defendants’ refusal to provide information afler two formal requests and five meet and 18 confers. 19 29. Plaintiff states multiple reasons that it needs the requested documents. For example, 20 Plaintiff states that the documents will demonstrate the extent of Defendants’ alleged 21 misfeasance or malfeasance. The documents will also help Plaintiff determine damages 22 related to both the alleged breach of contract and the alleged breach of other duties, such 23

24 as the duty of loyalty, that Lombard owed to IEC during and after his employment there.

Page 7ofll 1 30. Plaintiff also states that it needs the information to counter Lombard’s claim that he did

2 not conduct business between January and March 2013. Plaintiff claims to have proof

that Lombard worked for a Dr. DeBenedictus during those months.

31. Plaintiff also states that Defendants’ tax returns are necessary to indicate Lombard’s 5 sources and amounts of income and the history of his side dealing. Plaintiff states that 6 the sources of income will show how many other clinics and doctors he sold his services 7 to in breach of his contract with IEC, while also revealing the degree to which he 8 breached his duties owed to IEC. 9 32. Defendants claim that there are less intrusive means to obtain the information Plaintiff 10

11 requests, but Plaintiff states that Defendants have never identified these less intrusive

12 means.

13 33. This matter is now before the Court.

14 ISSUE

15 1. Whether to grant Plaintiffs Motion to Compel despite Plaintiff not having complied 16 with CVR 37.1 of the Local Rules of the Superior Court of Guam. 17 PRINCIPLES Of LAW 18 The Guam Rules of Civil Procedure (“GRCP”) state that parties may obtain discovery 19 regarding any unprivileged matter that is relevant to the claim of any party, including 20 documents, books, or other tangible things. Guam R. Civ. P. 26(b)(1). The GRCP also state that 21 any party may serve on any other party a request to inspect and copy any tangible things which 22 constitute or contain matters within the scope of Rule 26(b), and which are in the possession, 23

24 custody, or control of the other party. Id. at 34(a)(l). If the other party receives the request but

25 fails to respond, the discovering party may move for an order compelling production of the

26 materials for inspection. id. at 37(a)(2)(B). The motion must include certification that the

Page 8 of 11 1 movant conferred or attempted in good faith to confer with the other party to try to obtain the

2 materials without court action. Id. The local civil rules of the Superior Court of Guam (“CVR”)

add that before filing a motion to compel discovery, counsel for the parties must meet or

attempt to meet in a good faith effort to eliminate the need for hearing the motion. Super. Ct. 5 Guam R. 37.1(a). If they are unable to resolve the dispute, the respective counsels must create a 6 written stipulation specifying “separately and with particularity each issue that remains to be 7 determined at the hearing.” 8 Tax returns are discoverable only if they are relevant to the subject matter in dispute and

the information sought is not obtainable from other sources. Haeuser v. Dep’t of Law, Gov’t of 10 Guam, 1999 Guam 12 ¶ 27 (see also Terwilliger v. York Int’l. Corporation, 176 f.R.d. 214,

12 216-217 (W.D.Va. 1997).

13 ANALYSIS

14 It appears that if Defendants would only give their GRT summaries to Plaintiff, Plaintiff

15 would be satisfied. Defendants have stated they are ready and willing to do so. Plaintiff offered 16 on two occasions to accept Defendants’ GRT information in place of some or all of the 17 originally requested documents. Defendants agreed to give their GRT summaries to Plaintiff 18 only if Plaintiff in turn gave its GRT summanes for the same time penod to Defendants and 19 also signed a stipulated protection order. Plaintiff did both, and Defendants stated in the 20 Opposition that they are satisfied with Plaintiffs actions. Apparently Defendants are ready to 21 deliver their GRT summaries to Plaintiff but have paused to await the results of this Motion. It 22 seems likely that if Plaintiff would have begun the exchange of GRT information first, the 23

24 Motion may never have been necessary. Regardless, it is now the Defendants turn to give

25 Plaintiff the requested GRT information in satisfaction of the documents still not produced in

Page9ofll 1 response to Plaintiffs requests. If Defendants do so, this discovery dispute will apparently be

2 put to rest.

Regarding tax returns, Defendants’ tax returns are not discoverable unless they are

relevant and unless the information in them cannot be obtained in any other way, under the 5 Haeuser decision by the Supreme Court of Guam. The Court has some concerns about the 6 relevance of the tax documents, considering that much of the information Plaintiff seeks, such 7 as sources of income, will not appear in the tax documents. The Court has similar concerns 8 about the balance sheet and other financial documents. Regardless, Plaintiff is presumably

satisfied that the information could be obtained in another way because Plaintiff agreed to

accept the GRT summaries in place of those documents. Therefore, Plaintiffs request for the

12 tax returns fails the Haeuser test.

13 Plaintiff has largely followed the GRCP and CVR guidelines for requesting discovery.

14 However, Defendants argue and Plaintiff concedes that Plaintiff has failed to comply with the

15 final step of CVR 37.1. The rule states that prior to filing any motion relating to the discovery 16 dispute, if the parties do not resolve the issues in a meet and confer, the respective counsels 17 must create a written stipulation specifying separately and with particularity each issue that 18 remains to be detenruned. Plaintiff filed the instant Motion without carrying out that step. This 19 case appears to be a textbook example of the value of complying with CVR 37.1. It seems 20 highly likely that if Plaintiff would have attempted to clarify each issue that remains to be 21 determined, it would have recognized that the whole matter could be resolved if both parties 22 simply carried out actions they had already agreed to do, that is, exchange GRT information and 23

24 sign the protective order. Instead, Plaintiff filed the instant Motion, creating uncertainty for

25 Defendants about how to proceed. Plaintiffs compliance with CVR 37.1 would likely have

26 prevented the Court’s involvement in this discovery dispute. Page 10 of 11 1 In addition, it is not clear to the Court exactly which documents Plaintiff is willing to

2 stop seeking in exchange for Defendants’ GRT summaries. Plaintiffs offers for compromise

were similar but not identical, and as previously stated, Plaintiff moved to compel production of

some materials that it had never previously requested. Still, given that both sides have agreed to 5 compromises that will satisfy many if not all of the discovery requests, the Court is optimistic 6 that the sides can resolve this discovery dispute. If they cannot, CVR 37.1 requires the parties to 7 create a written stipulation specifying separately and with particularity each issue that remains 8 to be determined at the hearing. The Court will await the outcome of these options, and

meanwhile, the Court will not grant the Motion. 10

11 CONCLUSION AND ORDER

12 For the above reasons, the Court DENIES Plaintiffs Motion to Compel.

14 SO ORDERED, this day of________________ 2019.

HONORABLE MICHAEL J. BORDALLO 19 Judge, Superior Court of Guam

23 SERVICE VIA COURT BOX 24 acknowledge that a copy oHhO Ofiginal heretowapIaced in the courtboxot 25

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