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Marine Lumber Co. v. Precision Moving & Storage, Inc.

United States District Court, D. Hawaii

October 17, 2017

MARINE LUMBER CO., an Oregon corporation, Plaintiff,
v.
PRECISION MOVING & STORAGE INC., a Hawaii corporation; DOE DEFENDANTS 1-50, Defendants.

          ORDER DENYING APPEALS OF THE MAGISTRATE JUDGE'S ORDERS FILED ON JUNE 1, 2017, AUGUST 16, 2017, AND AUGUST 17, 2017

          Leslie E. Kobayashi, United States District Judge.

         Before the Court are the following appeals of orders issued by the magistrate judge:

-Defendant Precision Moving & Storage Inc.'s (“Defendant” or “Precision”) appeal, filed on June 9, 2017, of the June 1, 2017 Order Granting Plaintiff's Motion for Protective Order and Sanctions for Discovery Abuse (“6/1/17 Order” and “6/1/17 Order Appeal”); [dkt. nos. 74, 76;]
-Defendant's appeal, filed on August 25, 2017, of the August 16, 2017 Memorandum Opinion and Order on Discovery Issues (“8/16/17 Order” and “8/16/17 Order Appeal”); [dkt. nos. 105, 124;[1] and
-Plaintiff Marine Lumber Co.'s (“Plaintiff” or “Marine”) appeal, filed on August 31, 2017, of the August 17, 2017 Order Denying Plaintiff's Motion for Leave to Amend (“8/17/17 Order” and “8/17/17 Order Appeal”); [dkt. nos. 106, 130].

         Plaintiff filed its response to the 6/1/17 Order Appeal on June 23, 2017, and Defendant filed its reply on August 29, 2017. [Dkt. nos. 79, 128.] Plaintiff filed its response to the 8/16/17 Order Appeal on September 8, 2017, and Defendant filed its reply on September 22, 2017. [Dkt. nos. 140, 151.] Defendant filed its response to the 8/17/17 Order Appeal on September 14, 2017, and Plaintiff filed its reply on September 28, 2017. [Dkt. nos. 146, 156.] The Court has considered the appeals as non-hearing matters pursuant to Rule LR7.2(e) of the Local Rules of Practice of the United States District Court for the District of Hawai`i (“Local Rules”). The 6/1/17 Order Appeal, the 8/16/17 Order Appeal, and the 8/17/17 Order Appeal are hereby denied for the reasons set forth below.

         BACKGROUND

         I. 6/1/17 Order Appeal

         A settlement conference was originally scheduled for May 23, 2017, and the parties agreed to depose Edward McGrath, Plaintiff's party representative, in Hawai`i on May 24, 2017 because Plaintiff's lead counsel and Mr. McGrath - who both live in Oregon - would be in Hawai`i for the settlement conference. When the settlement conference was continued to June 6, 2017, [2]Defendant refused to continue Mr. McGrath's deposition to June 7, 2017. [6/1/17 Order at 1-2.] Defense counsel notified Plaintiff's counsel that Mr. McGrath's deposition would proceed on May 24, 2017. [Def.'s Mem. in Opp. to Motion for Protective Order, filed 5/25/17 (dkt. no. 71), Decl. of Sheri J. Tanaka, Exh. F (letter dated 5/6/17).] Plaintiff did not produce Mr. McGrath for deposition on May 24. See Reply in Supp. of 6/1/17 Order Appeal, Decl. of Sheri J. Tanaka (“Tanaka 6/1/17 Order Appeal Reply Decl.”) at ¶ 5 (stating that the 6/1/17 Order was filed “eight days after the no-show”).[3]

         Two days before the scheduled deposition date, Plaintiff filed a Motion for Protective Order and Sanctions for Discovery Abuse (“Motion for Protective Order”). [Dkt. no. 69.] The magistrate judge granted the Motion for Protective Order, finding that there was good cause to prevent undue burden and expense. [6/1/17 Order at 5.] The magistrate judge awarded Plaintiff $2, 500 in attorneys' fees and costs, finding that Defendant's objections to the proposed June 7, 2017 deposition date were not substantially justified. [Id. at 6-7.]

         In the 6/1/17 Order Appeal, Defendant argues that: the magistrate judge erred in allowing Plaintiff to dictate the date of the deposition based on Plaintiff's preference; making Mr. McGrath and Plaintiff's counsel travel to Hawai`i for the May 24, 2017 deposition would not have an undue burden or expense because Plaintiff chose to file the case in Hawai`i; Plaintiff did not try to resolve the dispute without court intervention; and the fee award was unrelated to Mr. McGrath's deposition.

         II. 8/16/17 Order Appeal

         On April 28, 2017, Plaintiff's counsel requested to conduct depositions of various Precision personnel on June 8 and 9, 2017, i.e. following the June 7, 2017 settlement conference. Defendant's counsel did not inform Plaintiff's counsel until June 5, 2017 that Defendant's counsel and witnesses were not available on those dates, and counsel did not provide any explanation. [8/16/17 Order at 4-5.] “Precision, its counsel, and its corporate representative did not appear for the depositions.” [Id. at 5.] Defendant did not move for a protective order regarding the June 8 and 9 depositions.

         On July 3, 2017, Plaintiff filed a Motion to Hold Defendant in Contempt for Failure to Appear and for Sanctions for Discovery Abuse regarding the depositions noticed for June 8 and 9 (“Depositions Motion”). [Dkt. no. 80.] On July 7, 2017, Plaintiff filed a Motion for Sanctions for Discovery Abuse, arguing that sanctions were warranted because the majority of Defendant's written discovery responses were deficient. (“Sanctions Motion”). [Dkt. no. 82.] The magistrate judge granted both motions in part and denied them in part. [8/16/17 Order at 1.] The magistrate judge granted the Deposition Motion insofar as he ordered Defendant to pay: the expenses for new deposition dates, up to $1, 500; and $1, 500 in attorneys' fees and costs that Plaintiff incurred because of the missed June 8 and 9 depositions and in bringing the Depositions Motion. [Id. at 6.] In response to the Sanctions Motion, the magistrate judge concluded that Defendant's responses to various discovery requests were inadequate, ordered Defendant to provide complete responses, and sanctioned Defendant's counsel $2, 500. [Id. at 7-13.]

         In the 8/16/17 Order Appeal, Defendant argues that: the order to provide additional discovery responses and the award of sanctions was not appropriate because the Sanctions Motion was not a motion to compel; the magistrate judge should not have ordered Defendant to supplement its responses to Plaintiff's requests for interrogatories and requests for admissions, and should not have awarded sanctions, because Defendant had already provided substantive responses in supplemental responses; and the magistrate judge's ruling regarding the June 8 and 9 depositions was inconsistent with his ruling in the 6/1/17 Order regarding the May 24, 2017 deposition of Mr. McGrath. Defendant argues that the inconsistency is evidence of favoritism toward Marine's mainland counsel.

         III. 8/17/17 Order Appeal

         On June 22, 2017, Plaintiff filed a Motion for Leave to Amend (“Motion to Amend”). [Dkt. no. 77.] Plaintiff sought leave to: add a claim for fraud in the inducement, with a prayer for punitive damages; add a claim for violation of the Uniform Commercial Code (“UCC”); and make various changes to “clean up” the Complaint, including adding a prayer for incidental damages, clarifying the existing prayer for interest, changing the terminology in the Complaint from “materials” to “goods”, and adjusting the relevant date ranges. The magistrate judge denied leave to amend because the deadline to amend pleadings had passed and Plaintiff did not show that it was diligent in pursuing the new claims. The magistrate judge found that Plaintiff knew about the basis for the proposed fraud and UCC claims by October 2016 from Precision's answer and from the materials Defendant submitted in opposition to Plaintiff's Motion for Summary Judgment.[4] [8/17/17 Order at 3-5.]

         In the 8/17/17 Order Appeal, Plaintiff asserts that it was diligent in seeking to bring its new claims because discovery was stayed until this Court filed the Order Denying Plaintiff's Motion for Summary Judgment (“Summary Judgment Order”) on March 28, 2017.[5]See dkt. no. 48 (Summary Judgment Order).[6]Plaintiff states that it did not have a factual basis to plead the fraud and UCC claims until after discovery. Plaintiff argues it was reasonable for it not to take action on this case during the stay because this Court's statements at the hearing on the Motion for Summary Judgment suggested that this Court was likely to grant at least partial summary ...


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