Martindale Corp. v. Heartland Inns

259 F.R.D. 174, 2009 U.S. Dist. LEXIS 67395, 2009 WL 2337113
CourtDistrict Court, N.D. Iowa
DecidedJuly 29, 2009
DocketNo. C08-2065
StatusPublished

This text of 259 F.R.D. 174 (Martindale Corp. v. Heartland Inns) is published on Counsel Stack Legal Research, covering District Court, N.D. Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Martindale Corp. v. Heartland Inns, 259 F.R.D. 174, 2009 U.S. Dist. LEXIS 67395, 2009 WL 2337113 (N.D. Iowa 2009).

Opinion

ORDER REGARDING DISCOVERY

JON STUART SCOLES, United States Magistrate Judge.

This matter comes before the Court on the Motion to Compel Heartland to Identify Alleged Prospective Purchasers (docket number 44) filed by the Plaintiff on June 30, 2009 and the Motion for Protective Order (docket number 48) filed by the Defendant on July 14, 2009. The Plaintiffs request for oral argument is denied. Pursuant to Local Rule 7.e, the motions will be decided without oral argument.

I. PROCEDURAL HISTORY

On October 29, 2008, Plaintiff Martindale Corporation filed a Complaint (docket number 2) against Defendant Heartland Inns of America, L.L.C., seeking declaratory judgment to establish the enforceability of an agreement to purchase and sell 18 hotels owned by Heartland. Heartland answered on November 25, 2008, asking that the complaint be dismissed. See Answer (docket number 8).

On December 12, 2008, Heartland filed a Motion for Summary Judgment (docket number 10). Martindale responded by filing a motion to “deny or defer ruling,” citing Federal Rule of Civil Procedure 56(f). In an Order filed on February 11, 2009, the Court denied Heartland’s motion for summary judgment as premature. See Order (docket number 22).

On February 18, Heartland filed a motion for leave to file a counterclaim. Heartland’s proposed counterclaim included claims for specific performance, breach of the purchase agreement, breach of an additional contract to repair the Coralville hotel, and tortious interference with a prospective business relationship. Martindale resisted, arguing that the motion was futile because the claims were without merit. The Court concluded that the agreement reached between the parties did not allow specific performance as a remedy available to Heartland. Accordingly, the Court found that Heartland’s proposed counterclaim for specific performance would be futile, and its motion to amend in that regard was denied. However, the Court granted Heartland’s request to assert the other three claims. See Ruling on Motion for Leave to File Counterclaim (docket number 26).

Heartland filed its Amended Answer and Counterclaim (docket number 27) on March 31, 2009. Of particular interest to the issue raised by the instant motions, Heartland claims in Count III of its Counterclaim that Martindale has tortiously interfered with a prospective business relationship. According to Heartland,

Martindale’s claim has improperly inhibited Heartland’s ability to enter into a contractual relationship with a purchaser who is capable of consummating a transaction and has in fact prevented Heartland from entering into such a contractual rela[177]*177tionship as the result of Martindale’s claim to the Hotels in the case at bar.

See Heartland’s Amended Answer and Counterclaim, ¶ 38 at 10 (docket number 27 at 10). Heartland claims that it has been damaged in the amount of $45 million “as a result of Martindale’s tortious interference with Heartland’s ability to enter into a contractual relationship with a third party for the sale of the Hotels.” Id. at ¶ 39.

On April 8, 2009, the Court adopted a proposed scheduling order and discovery plan submitted by the parties. This case is scheduled for a non-jury trial before Chief Judge Linda R. Reade on November 16, 2009. On July 13, 2009, the parties filed competing Motions for Summary Judgment (docket numbers 45 and 46). The deadline for responding to the motions is August 6, 2009.

II. ISSUE PRESENTED

On June 30, 2009, Martindale filed the instant motion to compel. On July 14, Heartland filed a resistance, and filed a motion for protective order. Both motions ask the Court to determine whether Heartland is required to disclose information regarding third parties who may be prospective purchasers of the hotels.

III. DISCUSSION

On December 29, 2008, Martindale served its First Set of Requests for Production of Documents.1 Among other things, Martin-dale asked for all documents concerning purchase offers received for the hotels, all documents concerning “any efforts” made by Heartland to find another purchaser, and all communications which Heartland had with any prospective buyer. In response to the request, Heartland produced a letter to its agent, dated January 21, 2009, purporting to outline “the general business terms and conditions” of a proposed agreement for the sale and purchase of the 18 hotels.2 The letterhead has been blacked out, however, as well as the name of the proposed purchaser. The letter is unsigned.

After Heartland filed its counterclaim, Martindale submitted a second request for production of documents, seeking documents relating to the “serious offers” referred to by Heartland in its counterclaim. Martindale also submitted a second set of interrogatories, requesting additional detail regarding discussions to sell the hotels to third parties. Heartland resists the production of the requested information, arguing that it “is unnecessary and irrelevant to proving or defeating the tortious interference counterclaim and its disclosure would be unjustifiably harmful to Heartland.”3 Heartland suggests that it not be required to provide the requested information until the prospective purchasers “have either entered into a binding, irrevocable agreement to purchase the hotels or have explicitly stated that they will not purchase the hotels.”4

A. Is the Requested Information Relevant?

The familiar standard governing the scope of discovery generally is found in Federal Rule of Civil Procedure 26(b)(1): “Parties may obtain discovery regarding any non-privileged matter that is relevant to any party’s claim or defense.” Accordingly, the Court must determine whether information relating to a possible sale of the hotels to a third party is relevant to Heartland’s claim or Martindale’s defense. In a discovery context, relevancy “has been construed broadly to encompass any matter that bears on, or that reasonably could lead to other matter that could bear on, any issue that is or may be in the case.” Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351, 98 S.Ct. 2380, 57 L.Ed.2d 253 (1978). See also Davis v. Union Pacific R.R. Co., 2008 WL 3992761 (E.D.Ark.) at *2 (“a request for discovery should be considered relevant if there is ‘any possibility’ that the information sought may be relevant to the claim or defense of any [178]*178party.”); Moses v. Halstead, 236 F.R.D. 667, 671 (D.Kan.2006) (same).

In Count III of its Counterclaim, Heartland asserts that Martindale tortiously interfered with a prospective business relationship. The gravamen of Heartland’s claim is described by it as follows:

Heartland is unable to convey clear title to the Hotels to a third party so long as Martindale’s claim to the Hotels is pending.

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Bluebook (online)
259 F.R.D. 174, 2009 U.S. Dist. LEXIS 67395, 2009 WL 2337113, Counsel Stack Legal Research, https://law.counselstack.com/opinion/martindale-corp-v-heartland-inns-iand-2009.