Opinion
NO. 19-C-56
02-25-2019
ZYDECO'S II, LLC, ZYDECO'S CORP, DUSTIN GAINEY AND ROSEMARIE GAINEY v. CERTAIN UNDERWRITERS AT LLOYD'S, LONDON SUBSCRIBING TO CERTIFICATE/POLICY NO. B1180D150152-59633, DAVID BRENNAN, DAVE BRENNAN INSURANCE, INC., AND BRAISHFIELD ASSOCIATES, INC.
Susan Buchholz First Deputy Clerk IN RE CERTAIN UNDERWRITERS AT LLOYD'S, LONDON SUBSCRIBING TO CERTIFICATE/POLICY NO. B1180D150152-59633 APPLYING FOR SUPERVISORY WRIT FROM THE TWENTY-NINTH JUDICIAL DISTRICT COURT, PARISH OF ST CHARLES, STATE OF LOUISIANA, DIRECTED TO THE HONORABLE EMILE R. ST. PIERRE, DIVISION ''C'', NUMBER 82,255 Panel composed of Judges Jude G. Gravois, Hans J. Liljeberg, and John J. Molaison, Jr.
WRIT DENIED IN PART AND GRANTED IN PART; JUDGMENT VACATED IN PART; REMANDED WITH INSTRUCTIONS
Plaintiffs/respondents, Zydeco's II, LLC, Zydeco's Corp., and Dustin and Rosemarie Gainey, owned and operated a restaurant in Boutte, Louisiana. On May 30, 2016, the restaurant caught fire, and as a result, the property was a total loss. At the time of the fire, Certain Underwriters at Lloyd's, London Subscribing to Certificate/Policy No. B1180D150152-59633, had in full force and effect a commercial property policy issued to plaintiffs. On August 26, 2016, the insurance policy in question was rescinded by Underwriters after it was revealed that plaintiffs did not have a centrally monitored fire alarm as required by the policy. On November 14, 2016, plaintiffs filed a petition for damages against Underwriters and a number of other defendants, arguing a breach of duty of good faith and fair dealing. The petition for damages has since been amended and supplemented at least twice.
In this writ application, relator/defendant, Underwriters, seeks this Court's supervisory review of the trial court's January 17, 2019 written judgment which denied its: 1) Motion to Strike Plaintiffs' Fourth Supplemental Witness List and Third Supplemental Exhibit List; and 2) Motion for Contempt and to Compel Rita M. Borne, CPA.
For the following reasons, we deny the portion of relator's writ application seeking reversal of the trial court's denial of relator's Motion to Strike Plaintiffs' Fourth Supplemental Witness List and Third Supplemental Exhibit List; we deny the portion of relator's writ application seeking reversal of the trial court's denial of relator's Motion for Contempt; we grant relator's writ application in part, in that we reverse the ruling of the trial court denying relator's Motion to Compel, we grant the Motion to Compel, and we remand the matter with instructions for the trial court to order Ms. Borne to produce the requested information within a reasonable amount of time; and finally, we vacate the ruling of the court awarding Ms. Borne a $300.00 witness fee.
Motion to Strike Plaintiffs' Fourth Supplemental Witness List and Third Supplemental Exhibit List
On November 19, 2018, Underwriters filed a Motion to Strike Plaintiffs' Fourth Supplemental Witness List and Third Supplemental Exhibit List. In the motion, Underwriters argued that a pretrial order was issued and filed in this matter on March 5, 2018, in which deadlines were set for April 30, 2018 for plaintiffs' expert designations and reports, and July 2, 2018 for final expert and witness lists. On October 4, 2018, the trial date was continued, but any order previously issued regarding discovery deadlines which were not modified would remain the order of the Court. In the interim, plaintiffs noticed the deposition of Mr. C. Todd Thomas, an expert who had been retained by David Brennan and his insurance carrier, defendants who had previously been dismissed from the case. Underwriters filed a motion to quash said deposition, and at the hearing on the motion to quash, plaintiffs allegedly represented that Mr. Thomas had been named as a witness by them. The trial court denied the motion to quash. Thereafter, on October 31, 2018, plaintiffs filed supplemental witness and exhibit lists, naming Mr. Thomas as an expert for the first time, and also adding the provision: "Any and all witnesses called and/or listed by any and all other parties to this litigation." Underwriters argued that these newly supplemental witness and exhibit lists naming Mr. Thomas for the first time were untimely and should be struck by the Court.
It is noted that none of the exhibits that were attached to Underwriters' Motion to Strike, including the March 15, 2018 pretrial order and the prior witness and exhibit lists filed by plaintiffs, were included in this writ application. --------
In opposition to the Motion to Strike, plaintiffs argued that Mr. Thomas was designated as an expert by the previously-dismissed defendants, Dave Brennan and his insurance carrier, on July 2, 2018, his report was produced to all parties at that time, and he has since provided his deposition. As such, plaintiffs argued that there could be no surprise, bias, or prejudice to Underwriters.
Following the hearing on the matter, the trial court denied Underwriters' Motion to Strike. In its written reasons for judgment, the court stated that the supplemental witness and exhibit lists were of no surprise to Underwriters since Mr. Thomas had initially been listed by a previously-dismissed party. The court also noted the fact that a party has been dismissed from the case does not automatically strike or bar any potential witness from use by another party to the litigation. Further, the court stated that the law provides that any matter relevant to the litigation may be admissible at trial and Underwriters had not shown undue prejudice or surprise from the addition of the witness.
A pretrial order controls the subsequent course of action unless modified to prevent manifest injustice. La. C.C.P. art. 1551; Austrum v. City of Baton Rouge, 282 So.2d 434 (La. 1973). Because of the need to insure for an orderly disposition of cases, a trial judge is given broad discretion to determine whether or not to modify a pretrial order listing witnesses and narrowing issues. McDuffie v. AC & S, Inc., 00-2779 (La. App. 4 Cir. 2/14/01), 781 So.2d 628, 631. In deciding whether to modify a pretrial order, a trial court must be ever mindful of the fact that the objective of the legal system is to render justice between the litigants upon the merits of the controversy, rather than to defeat justice upon the basis of technicalities. Id.
Under the circumstances of this case, specifically that Underwriters was aware that Mr. Thomas was listed as a witness by a previous party and considering the trial court's broad discretion, we find that Underwriters will not suffer any prejudice in the trial court's decision to allow the supplemental witness and exhibit lists. Therefore, we find that the trial court did not abuse its discretion in denying Underwriters' Motion to Strike Plaintiffs' Fourth Supplemental Witness List and Third Supplemental Exhibit List. Motion for Contempt and to Compel Rita M. Borne , CPA
On December 11, 2018, Underwriters filed a Motion for Contempt and to Compel Rita A. Borne, CPA. Previously, on June 18, 2018, Ms. Borne was served with a subpoena duces tecum wherein Underwriters requested the following:
A certified copy of any and all documents related to, used for, or reviewed in preparation for filing federal or state tax documents on behalf of any and all other Zydeco's entities or other entities owned, managed, or operated by Zydeco's II, L.L.C., Zydeco's Corp., Dusten [sic] Gainey and/or Rosemarie Gainey, for which documents have not previously been provided, including, but not limited to, draft and final federal or state tax forms, addendums or applications, and any documents evidencing business expenses or business-related deductions, income earned or reported, W-2's, W-4, 1099s, receipts and paystubs, any documents submitted to you as evidence of
business expenses or losses or business-related deductions from 2008-present.
Subsequently, on June 27, 2018, plaintiffs' counsel circulated an email that indicated that Ms. Borne had previously produced all the documents requested in the subpoena, and that she had nothing further to produce. However, on August 29, 2018, during her deposition, when Ms. Borne was questioned about her search for documents related to a number of plaintiffs' other business entities, she testified that she had not searched for those documents. In response, on October 4, 2018, Underwriters filed another subpoena duces tecum, requesting that Ms. Borne produce the following by October 24, 2018:
A certified copy of any and all documents related to, used for, or reviewed in preparation for filing federal or state tax documents on behalf of any and all other Zydeco's entities and/or other entities owned, managed, or operated by Zydeco's II, LLC, Zydeco's Corp., Dusten [sic] Gainey, and/or Rosemarie Gainey for which documents have not previously been provided, including, but not limited to, draft and final federal or state tax forms, addendums or applications; any documents evidencing business expenses or business-related deductions, including but not limited to those showing or evidencing income earned or reported, W-2s, W-4, 1099s, receipts and paystubs, and/or any documents submitted to you as evidence of business expenses or losses or business-related deductions; and any loan, foreclosure, business sale, property sale, business purchase, and/or property purchase documents, whether such documents evidence loans, sales, purchases, or foreclosures:
a) by and between the Gaineys and any business entities they own or manage,
b) by and between each, any, or every of the business entities owned and/or managed by Zydeco's II, LLC, Zydeco's Corp., Dusten [sic] Gainey, and/or Rosemarie Gainey,
c) by and between any third-party or other entity and any or every of the business entities owned and/or managed by Zydeco's II, LLC, Zydeco's Corp., Dusten [sic] Gainey, and/or Rosemarie Gainey, and/or
d) by and between any third-party or other entity and Dusten [sic] and/or Rosemarie Gainey.
Please produce all such documents received, produced, drafted, filed, used for, reviewed, or relied upon in any way in the computation of quarterly statements for each such entity and for the drafting, preparation, and/or filing of any tax documents for each such entity and person referenced above. Please produce all documents for the years 2006 through 2018, inclusive, to the extent that such documents have not already been produced.
By letter of October 17, 2018, Ms. Borne informed Underwriters that she would not be able to produce the requested documents by October 24, 2018 and that she would need more time; that she may not have any of the requested documents because she returns all documents to clients once she is finished with them; and that she only retains documents for 10 years and thus she would not have any documents from 2006. In its Motion for Contempt and to Compel, Underwriters provides that it gave Ms. Borne an extension of time to respond to the subpoena by November 2, 2018. According to Underwriters' motion, Ms. Borne had not yet responded to, objected to, or filed a motion to quash the subpoena.
At the hearing on this matter, Ms. Borne testified that she received the subpoena "in reference to Zydeco" and produced all the records she had "with Zydeco." Following the October 4, 2018 subpoena, she notified Underwriters that the ten-day period for producing the requested documents was not enough time, that she did not have any records from 2006 and 2007 because she only retains records for 10 years, and that she needed more time to respond. She testified that she never heard back from Underwriters until she received the Motion for Contempt. She also noted that she had not yet been paid the $3,800.00 owed to her by Underwriters' counsel for her initial records production. When asked specifically if she had searched for all records related to any entity owned by the Gaineys or the Zydeco's entities that are in her possession, she responded "Since 2008 or 6, no." She further expounded that she did not search for a company unless specifically asked about it, but also testified that "[she] never said [she] wasn't going to provide them." She finally testified that she produced everything that she was "originally asked for," does not have documents before 2008, and in response to the October 2018 subpoena, she "responded with that letter."
Following the parties' arguments, the trial court orally denied the Motion for Contempt and to Compel. In its written judgment, the court also awarded Ms. Borne a witness fee of $300.00 to be taxed as costs of court. In its written reasons for judgment, the court found that Ms. Borne was not in contempt and was in good faith throughout the proceedings. Since she was a professional who was inconvenienced by having to spend time to travel to and from court, along with time spent in court, the court awarded her a witness fee of $300.00.
The trial court has broad discretion in regulating pretrial discovery, and its decision will not be disturbed absent a clear abuse of that discretion. H. D. Graphics, LLC v. It's Permanent, LLC, 49,405 (La. App. 2 Cir. 10/01/14), 150 So.3d 936, 941, citing Bell v. Treasure Chest Casino, L.L.C., 06-1538 (La. 2/22/07), 950 So.2d 654. During the hearing on this motion, Ms. Borne admitted that she had not searched for all records related to any entity owned by the Gaineys or the Zydeco's entities that are in her possession. Accordingly, we find that the trial court abused its discretion in denying the Motion to Compel. Considering this, we also find the trial court erred in awarding Ms. Borne a witness fee of $300.00. However, because Ms. Borne did contact Underwriters by letter to address the subpoena of October 4, 2018, we do not find the trial court erred in denying the Motion for Contempt.
CONCLUSION
For the foregoing reasons, the portion of relator's writ application seeking reversal of the trial court's denial of relator's Motion to Strike Plaintiffs' Fourth Supplemental Witness List and Third Supplemental Exhibit List is denied; the portion of relator's writ application seeking reversal of the trial court's denial of relator's Motion for Contempt is denied; relator's writ application is granted in part, in that the ruling of the trial court denying relator's Motion to Compel is reversed, the Motion to Compel is granted, and the matter is remanded with instructions for the trial court to order Ms. Borne to produce the requested information within a reasonable amount of time; and finally, the ruling of the court awarding Ms. Borne a $300.00 witness fee is vacated.
Gretna, Louisiana, this 25th day of February, 2019.
JGG
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