United States District Court, N.D. Indiana, Hammond Division
ANTHONY E. ELLO and EVELYN ELLO, Plaintiffs,
GARY R. BRINTON and SEVEN PEAKS MARKETING CHICAGO, LLC, Defendants, SEVEN PEAKS MARKETING CHICAGO, LLC, Counter-Claimant,
ANTHONY E. ELLO and EVELYN ELLO, Counter-Defendants.
OPINION AND ORDER
E. MARTIN MAGISTRATE JUDGE.
matter is before the Court on a Motion to Quash Time-Barred
Subpoenas and for a Protective Order [DE 59], filed by
Defendants Gary Brinton and Seven Peaks Marketing Chicago,
LLC, (SPMC) on July 14, 2016, and on a Motion for Sanctions
and to Re-Open Discovery for a Limited Purpose [DE 61], filed
by Plaintiffs Anthony E. Ello and Evelyn Ello on July 15,
case arises out of a dispute concerning a lease between
Plaintiffs and Defendants for a bowling alley in Indiana.
Plaintiffs allege that Defendants improperly terminated the
lease in June 2014 and seek damages from both SPMC and
Defendant Brinton. Even though Defendant Brinton was not
personally a party to the lease, Plaintiffs allege that he is
nonetheless personally liable for Plaintiffs' claims
against SPMC because he failed to observe corporate
formalities in operating SPMC.
30, 2016-one day before the close of discovery-Plaintiffs
issued the following four subpoenas:
1. A subpoena to King & McCleary, LLC, Defendants'
accountants in Utah, requesting all documents relating to
Defendant Brinton, including but not limited to tax returns
and financial statements for the years 2012-2015; all
documents relating to several non-party entities Plaintiffs
allege Defendant Brinton owns; and all documents relating to
SPMC, including tax returns, financial documents, company
filings, and loan applications for the years 2012-2015.
2. A subpoena to Bryan Ottley, an employee of Chase Bank in
Utah, requesting all documents relating to Defendant Brinton
for the years 2012-2015; all documents relating to the
several non-party entities Plaintiffs allege Defendant
Brinton owns; and all documents relating to SPMC from 2012 to
3. A subpoena to the Secretary of State, Division of
Corporation and Commercial Code requesting all documents
relating to Defendant Brinton, including tax returns and
financial statements, for the years 2013-2014; all documents
relating to the non-party entities Plaintiffs allege
Defendant Brinton owns; and all documents relating to SPMC,
including all filings for the years 2013-2014.
4. A subpoena to Horizon Bank, a bank in Indiana, requesting
all documents relating to Defendant Brinton, including
personal financial statements, loan applications, and
“supporting documentation”; and all documents
relating to SPMC, including but not limited to financial
statements, loan applications, and “supporting
See DE 61-13.
Local Rule Compliance
briefing and filing their motions, both sides frequently
violated the Northern District of Indiana's Local Rules
and the guidelines established in the CM/ECF User Manual. For
example, Local Rule 7-1(e) provides, “Supporting and
response briefs . . . ordinarily must not exceed 25 pages,
” yet Defendants' response to Plaintiffs'
Motion for Sanctions is almost 40 pages. Defendants also
included a “motion” for leave to exceed the page
limit as an attachment to the response, see DE 81-4,
in violation of Rule 7-1's command that motions be filed
Plaintiffs filed a “Motion for Sanctions and to Re-Open
Discovery for a Limited Purpose” containing two
separate requests. See N.D. Ind. L.R. 7-1.
Plaintiffs' counsel also failed to file a certification
that he met and conferred with Defendants' counsel in an
attempt to resolve the discovery disputes before filing the
discovery motion. See N.D. Ind. L.R. 37-1 (“A
party filing any discovery motion must file a
separate certificate that the party has conferred in good
faith . . . with other affected parties in an effort to
resolve the matter.”) (emphasis added).
in the interest of justice, the Court will consider the
merits of the parties' arguments notwithstanding the
parties' failure to comply with the Local Rules. The
Court CAUTIONS the parties that future filings that do not
comply with the Local Rules and the CM/ECF User Manual may be
denied on that ground.
Defendants' Motion to Quash & Plaintiffs' Motion
to Re-Open Discovery
their Motion to Quash, Defendants ask the Court to quash the
four subpoenas on several grounds, including that the
subpoenas are untimely. Plaintiffs provide some argument
against quashing the subpoenas, but they also filed a Motion
to Re-Open Discovery in an attempt to cure the subpoenas'
argue that the subpoenas Plaintiffs issued on June 30 were
untimely because they were served only one day before the
July 1, 2016, discovery deadline, with a response date of
July 15, 2016. As a result, Defendants say, the Court should
quash the subpoenas because they improperly required
compliance two weeks after the discovery deadline. See
Gordon v. Northeastern REMC, No. 1:02-CV-171, 2003 WL
21919179, at *2 (N.D. Ind. June 2, 2003) (“Discovery
requests not filed in sufficient time to allow the opponent
to respond within the discovery period are untimely and the
opponent is under no duty to comply.”); Dreyer v.
GACS, Inc., 204 F.R.D. 120, 123 (N.D. Ind. 2001)
(“In short, Rule 45 Subpoenas . . . are subject to the
same time constraints that apply to all of the other methods
of formal discovery.”).
do not contend that the subpoenas were timely. Instead they
argue that “the subpoenas were issued [on June 30,
2016, ] due to the delay tactics of Defendants and their
improper and untimely supplementation of the Rule 26
disclosures.” DE 64 at 2. Regarding the alleged
“delay tactics, ” Plaintiffs argue that their
attorney attempted to schedule various depositions as early
as April 2016, but due to multiple scheduling conflicts with
Defendants' schedule the depositions were not conducted
until the very last week of discovery. Information gleaned
from these depositions, Plaintiffs say, called for more
also argue that at “the eleventh hour in the discovery
process, ” Defendants supplemented their initial
disclosures. A review of the supplemental disclosures, dated
two days before the close of discovery, shows that Defendants
disclosed “documents regarding Seven Peaks Marketing
Chicago, L.C.'s legal status, formation, membership, bank
accounts, inner workings, payroll companies, tax returns and
other financial data.” DE 61-8. These documents were
not listed in Defendants' original January 2016
disclosures. See DE 61-10.
simply, Plaintiffs ask for more time to complete discovery.
Under Federal Rule of Civil Procedure 6, “[w]hen an act
may or must be done within a specified time, the court may,
for good cause, extend the time . . . before the original
time or its extension expires . . . or on motion made after
the time has expired if the party failed to act because of
excusable neglect.” Fed.R.Civ.P. 6(b)(1). To determine
whether a party's neglect in allowing the discovery
deadline to expire was excusable, the Court must take
“into consideration all relevant circumstances
including the danger of prejudice to the non-moving party,
the length of the delay and its potential impact on judicial
proceedings, the reason for the delay, including whether it
was within the reasonable control of the movant, and whether
the movant acted in good faith.” Marquez v.
Mineta, 424 F.3d 539, 541 (7th Cir. 2005) (quotations
and citations omitted).
Motion to Re-Open Discovery was filed on July 15, 2016, two
weeks after discovery closed. So the Court must determine
whether Plaintiffs failed to act within the discovery period
because of “excusable neglect.” Fed.R.Civ.P.
6(b)(1). Plaintiffs blame Defendants' late disclosures
and deposition scheduling as the reasons for Plaintiffs'
delay in issuing the subpoenas and requesting more time for
documents Plaintiffs seek through the subpoenas, however, are
documents Plaintiffs should have known they needed the day
they filed their original complaint in August 2014.
Plaintiffs' Complaint [DE 1] and their Amended Complaint
[DE 24] both allege that Defendant Brinton ignored corporate
formalities in running SPMC, meaning he might be held
personally liable for Plaintiffs' alleged damages.
Indeed, Plaintiffs acknowledge that the documents they seek
through the subpoenas are “related to Defendants'
operation of their corporate entities and allegedly
commingled assets.” DE 65 at 3. Why Plaintiffs did not
seek documents concerning Defendant Brinton's
relationship with SPMC long before the discovery deadline is
unclear. Defendants assert, and Plaintiffs do not disagree,
that Plaintiffs did not seek any discovery before
the depositions in the final week of June.
other hand, Defendants did supplement their initial
disclosures the very week that discovery was set to close.
The supplemental disclosures included information about
documents relevant to Plaintiffs' alter ego theory of
liability, namely the documents concerning SPMC's
operations and finances. Furthermore, an email exchange
between Defendants' counsel and Plaintiffs' counsel
shows that Plaintiff tried to schedule Defendant
Brinton's deposition as early as April, but
Defendants' counsel asked that the deposition be
rescheduled and further delayed in responding to
Plaintiffs' counsel's requests for possible dates.
See DE 61-14. Had the deposition been conducted
sooner, Plaintiff might have had an opportunity to follow up
with appropriate discovery requests before the discovery
Defendant Brinton's deposition was finally taken on June
27, 2016, he repeatedly refused to testify about SPMC's
inner workings, arguing that he was not noticed as a
designated witness under 30(b)(6) and was testifying as an
individual rather than as the limited liability company's
representative. See generally DE 61-2. Indeed, the
notice for Defendant Brinton's deposition did not
“describe with reasonable particularity” that
Defendant Brinton would be questioned about SPMC's inner
workings and finances as required by Rule 30(b)(6).
See DE 81-1.
counsel for Defendants acknowledges that she received a
30(b)(6) notice from Plaintiffs' on May 11, 2016. DE 81
at 23. The notice scheduled the deposition of the
“person most knowledge of the formation, organization,
and corporate structure of Seven Peak (sic) Marketing,
LLC” for “Monday, June 21, 2016 at 1:00
p.m.” DE 81-1. Plaintiffs sent the 30(b)(6) notice
along with deposition notices for Scott Brinton and Matthew
Phair-two other witnesses in this case. DE 81 at 23. The
parties eventually rescheduled the depositions for the last
week of June, causing Plaintiffs' counsel re-noticed the
depositions. See DE 61-14. But Plaintiffs'
counsel did not re-notice a deposition for a SPMC
representative, instead noticing Defendant Brinton only in
his individual capacity. DE 81-1.
parties disagree on why Defendant Brinton was not re-noticed
to testify as a representative of SPMC. Plaintiffs'
counsel asserts that Defendants' counsel told him
Defendant Brinton would testify in both his individual and
representative capacity at the June 27 deposition.
Plaintiffs' counsel went so far as to ask Defendant
Brinton if he had ever seen the 30(b)(6) notice for the
previously scheduled June 21 deposition. DE 61-2.
Defendants' counsel says that she never told
Plaintiffs' counsel that Defendant Brinton would be
available as both as an individual and a company
representative. DE 81 at 23.
case, Defendant Brinton did testify generally about SPMC, but
he declined to go into any meaningful detail, in effect
denying Plaintiffs an opportunity to analyze the merits of
their alter ego theory of liability. And Defendants did not
seek to stop the deposition “to preserve a privilege,
to enforce a limitation ordered by the court, or to present a
motion” to terminate or limit the deposition under Rule
30(d)(3). Fed.R.Civ.P. 30(c)(2). To make matters worse,
discovery closed only three days after Defendant
Brinton's deposition, leaving insufficient time for
Plaintiffs to re-notice him as a 30(b)(6) witness.
Plaintiffs could have acted earlier in seeking information
about SPMC's business information, Defendants' delay
in scheduling key depositions and in disclosing important
information justifies extending the discovery deadline.
Plaintiffs tried to depose Defendant Brinton earlier, but
Defendants asked that the depositions be delayed. And the
confusion about whether Defendant Brinton would or would not
testify about SPMC's inner workings, coupled with how
close to the deadline his deposition was scheduled, prevented
Plaintiffs from discovering information important to their
alter ego theory of liability.
Plaintiffs had no control over when Defendants decided to
supplement their disclosures. This is the strongest
justification for extending discovery. Allowing discovery to
close despite Defendants' late disclosure would deny
Plaintiffs the opportunity to fully determine how
Defendants' disclosure affects their case.
the Court finds that Plaintiffs' neglect was excusable
and finds good cause to extend the discovery deadline.
Although Plaintiff asked the Court to reopen discovery for a
“limited purpose” without a definite end date,
the Court declines to leave the parties without a definitive
close of discovery. Accordingly, the Court extends the
discovery deadline to March 31, 2017. See Fed. R.
Civ. P. 6(b)(1).
discussed below, whether the subpoenas are invalid as a
matter of law is a question for another court. Even if the
subpoenas are invalid, the parties may continue to engage in
other forms of discovery consistent with the limitations set
forth in the parties' 26(f) Report [DE 47] and this
Court's previous discovery orders. To conserve judicial
resources, Plaintiffs may wish to voluntarily withdraw their
subpoenas to pursue other more efficient means of obtaining
the information sought in the subpoenas.
also argue that the subpoenas did not comply with the notice
requirements of Federal Rule of Civil Procedure 45 in that
Defendants did not receive notice of the subpoenas until July
5, 2016-five days after the subpoenas were served on the
non-parties. Plaintiffs do not respond Defendants' notice
45(a)(4) provides, “If the subpoena commands the
production of documents, electronically stored information,
or tangible things . . . then before it is served on the
person to whom it is directed, a notice and a copy of the
subpoena must be served on each party.” The purpose of
the notice requirement is to “enabl[e] other parties to
object or to serve a subpoena for additional
materials.” Fed.R.Civ.P. 45, Advisory Committee Notes.
for Defendants represents that she could not locate binding
authority concerning what the Court should do in light of
Plaintiff's failure to provide proper notice under Rule
45(a)(4). The Court's own review of relevant case law
reveals differing outcomes. Compare Duke v. Performance
Food Grp., Inc., 594 Fed.Appx. 829, 832 (5th Cir. 2014)
(“The district court did not abuse its discretion by
admitting documents obtained by serving a subpoena without
notice to the opposing party.”), and Fujikara Ltd.
v. Finisar Corp., No. 5:13-CV-03345, 2015 U.S. Dist.
LEXIS 135871, at *12-13 (N.D. Cal. May 14, 2015) (declining
to quash subpoenas for failure to give prior notice because
there was no prejudice from the ...