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Post-Confirmation Committee for Small Loans, Inc. v. Martin

United States District Court, M.D. Georgia, Albany Division

November 6, 2014

POST-CONFIRMATION COMMITTEE FOR SMALL LOANS, INC., Plaintiff,
v.
W. DEREK MARTIN, as Executor of the Estate of Vance R. Martin, et al., Defendants.

ORDER

W. LOUIS SANDS, District Judge.

Pending before the Court is a Motion to Compel Discovery filed by Defendants W. Derek Martin, as Executor of the Estate of Vance R. Martin, W. Derek Martin, Martin Family Group, LLLP, Martin Sublease, LLC, Martin Investments, Inc., W. Derek Martin, as Trustee for the Vance R. Martin GST Exempt Family Trust f/b/o W. Derek Martin, and Shana Shockley Martin ("the Martin Defendants"). (Doc. 86.) Therein, the Martin Defendants seek to compel Plaintiff Post-Confirmation Committee for Small Loans, Inc. ("the Committee") to do the following:

1. To produce all attorney billing records and similar documents supporting the Committee's claims for attorney's fees;
2. To produce the identity of, and discoverable information with respect to, any person or entity that is not a party to this suit but whose conduct the Committee contends contributed to the injury or damages associated with the various breach-of-fiduciary-duty claims alleged in the Committee's complaint;
3. To specify the documents the Committee has said will be provided to the Martin Defendants in lieu of furnishing written responses to Interrogatories 3, 8, 9, 15, 23, and 30 of Defendant Derek Martin's First Interrogatories to the Committee, and Interrogatory 1 of Defendant Martin Sublease, LLC's First Interrogatories to the Committee; and
4. To provide verifications under oath of the Committee's responses to the Martin Defendants' Interrogatories.

( See Doc. 86.) The Court addresses each of these requests in turn.

ANALYSIS

"Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense." Fed.R.Civ.P. 26(b)(1). "Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence." Id. Courts must "adhere to the liberal spirit of the Rules" governing discovery. Burns v. Thiokol Chem. Corp., 483 F.2d 300, 305 (5th Cir. 1973) (citing Wallin v. Fuller & Nationwide Mut. Ins. Co., 476 F.2d 1204 (5th Cir. 1973)). Though the party seeking the discovery materials bears the burden of demonstrating the relevance thereof, the party opposing disclosing the materials bears the "burden of establishing that a privilege or the work-product doctrine exempts these documents from discovery." See Fed.R.Civ.P. 26(b)(1); see also Republic of Ecuador v. Hinchee, 741 F.3d 1185, 1189 (11th Cir. 2013) (citing United States v. Schaltenbrand, 930 F.2d 1554, 1562 (11th Cir. 1991)).

I. Records Supporting the Committee's Claim for Attorney's Fees

The Martin Defendants seek production of "[a]ny documents which evidence or relate to any attorney's fees sought to be recovered by [the Committee], including, without limitation, billing statements." (Doc. 86-1 at 3.) Although the Committee initially refused to provide any documentation regarding billing statements, it later provided the Martin Defendants with redacted invoices showing dates of services rendered, initials of the persons who rendered the services, amounts of time spent on such services, and the hourly rate. ( See Docs. 86-2 & 95-2.)

The Court finds that the billing records are not relevant to any claim or defense in this matter. The Committee has asserted that, if it prevails in this suit, the Defendants will be required to pay its attorney's fees. Billing records evidence the amount of attorney's fees accumulated to date and, from such records, Parties will argue and the Court will determine whether the amount sought in attorney's fees is reasonable. However, whether the Committee will be able to collect attorney's fees if it prevails is a matter of law. Assuming the Committee prevails and the law allows it to collect attorney's fees, it will have the burden of establishing the appropriate amount of attorney's fees it is owed. See Norman v. Housing Auth. of City of Montgomery, 836 F.2d 1291, 1303 (11th Cir. 1988). If this case concludes in the Defendants' favor, the billing records will never be relevant. As such, the Court finds that the Martin Defendants have failed to meet their burden of establishing that the billing records they seek are relevant to any claim or defense in this case. According, the Martin Defendants' Motion to Compel billing records is DENIED.

II. Identity of Culpable Non-Parties

Next, the Martin Defendants seek to compel the Committee to disclose the identities of "certain professionals" involved in the Debtors' loss, as requested by Interrogatory No. 11. ( See Docs. 86-6 at 7-8 & 95 at 5-6.) In the Complaint, the Committee alleged that the Defendants' looting of the Debtors' assets, "as well as a confluence of other factors (including, among other things, the malpractice of certain professionals not the subject of this complaint), led to the downfall of the debtors and the loss of tens of millions of dollars of capital extended by Investors." (Doc. 1 ΒΆ 18 (emphasis supplied).) The Martin Defendants argue that the professionals' malfeasant acts are relevant to their apportionment defense under Georgia law. (Doc. 86-6 at 7.) The Committee asserts that the losses caused by the referenced professional malpractice are independent of the losses caused by the ...


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