The opinion of the court was delivered by: Monte C. Richardson United States Magistrate Judge
THIS CAUSE is before the Court on Plaintiffs' Motions to Compel (Docs. 97 and 98) directed to Defendants, Peter Sleiman Development Group ("PSDG") and Peter Sleiman ("Sleiman"). Defendants filed a response in opposition to these motions (Doc. 103) on November 22, 2011. Accordingly, the matter is now ripe for judicial review.
The instant litigation stems from contracts entered into between Plaintiffs and a Florida corporation, J.Ward. When J.Ward breached the contracts by failing to pay monies owed, Plaintiffs sued J.Ward in Ohio state court and obtained a judgment against it. Plaintiffs were unable to collect on the judgment and subsequently brought the instant litigation initially alleging claims for corporate alter ego liability for breach of contract and breach of contract implied-in-fact against PSDG related to the purchase and lease of fractional ownership interests in jet aircrafts by J Ward, Inc. (Doc. 32).
Plaintiffs also alleged claims of quasi-contract and unjust enrichment against PSDG, Sleiman, and Jennifer Ward ("Ward") for private jet travel and related services provided to and received by Defendants. Id. Plaintiffs subsequently amended the complaint to include claims for alter ego liability against Sleiman and Ward related to J.Ward's purchase and lease of the fractional ownership interests in the aircraft. (Doc. 63).
On December 22, 2010, Plaintiffs served Defendants, PSDG and Sleiman, with its First Set of Interrogatories and Requests for Production. Defendants responded on February 11, 2011 by filing a Motion for Protective Order (Doc. 41) seeking an order preventing Plaintiffs from obtaining prejudgment financial worth discovery. Prior to the Court ruling on the Motion for Protective Order, Plaintiffs filed the Second Amended Complaint (Doc. 63) in which they added claims for alter ego liability against Sleiman and Ward for breach of contract. Defendants, PSDG and Sleiman, filed a Motion to Dismiss the alter ego claims against them. (Doc. 67). Judge Corrigan referred the Motion to Dismiss to the undersigned and on June 13, 2011, the undersigned issued a Report and Recommendation (Doc. 75) that the Motion be granted without prejudice. In light of that ruling, the undersigned also granted the Motion for Protective Order. (Doc. 76). However, upon the objections of both sides, Judge Corrigan denied the Motion to Dismiss in an Order dated September 27, 2011. (Doc. 88). In that Order, Judge Corrigan determined that at the pleadings stage, Plaintiffs' alter ego allegations regarding whether J.Ward was used fraudulently or for an improper purpose were sufficient and "further discovery [would] provide the proper record upon which to determine whether NetJets [could] ultimately make the required showing necessary to sustain [its] claims." Id.
After the Court's ruling denying the Motion to Dismiss, Plaintiffs attempted to have PSDG and Sleiman respond to the discovery requests. Defendants refused and objected to each discovery request on the basis of relevancy and that the documents or information sought was protected by the trade secret privilege under Florida Statute §90.506. Despite Plaintiffs' offer to enter into a confidentiality agreement, Defendants refused to produce any information. Accordingly, Plaintiffs filed the instant Motions to Compel.
Motions to compel discovery under Rule 37(a) are committed to the sound discretion of the trial court. See Commercial Union Ins. Co. v. Westrope, 730 F.2d 729, 731 (11th Cir. 1984). The trial court's exercise of discretion regarding discovery orders will be sustained absent a finding of abuse of that discretion to the prejudice of a party. SeeWestrope, 730 F.2d at 731.
The overall purpose of discovery under the Federal Rules is to require the disclosure of all relevant information so that the ultimate resolution of disputed issues in any civil action may be based on a full and accurate understanding of the true facts, and therefore, embody a fair and just result. See United States v. Proctor & Gamble Co., 356 U.S. 677, 682, 78 S.Ct. 983 (1958). Discovery is intended to operate with minimal judicial supervision unless a dispute arises and one of the parties files a motion requiring judicial intervention. Furthermore, "[d]iscovery in this district should be practiced with a spirit of cooperation and civility." Middle District Discovery (2001) at 1.
In the instant case, Plaintiffs contend both PSDG and Sleiman have failed to properly respond to numerous discovery requests. The Court will first address Plaintiffs' Motion to Compel directed to PSDG and will then turn to the motion directed to Sleiman.
A. Plaintiffs' Motion to Compel Discovery from PSDG (Doc. 97)
In this Motion, Plaintiffs claim PSDG failed to properly respond to twenty-four different requests. The Court will address each of these requests.
This request seeks information regarding the commissions paid to J.Ward, as well as the agreement under which the commissions were paid. PSDG objects to the interrogatory as being overbroad (because it does not have a specified time period) and as seeking information not relevant to the instant dispute. The information sought in this request certainly appears to be relevant to the Court. While PSDG does not address this particular request in its response, it makes general claims that Plaintiffs are "attempting to conduct discovery related to the business activities of PSDG which are wholly unrelated to the allegations of the Complaint." (Doc. 103, p.8). PSDG also makes arguments about the merits of Plaintiffs' claims such that "Plaintiffs now seek to rewrite their contracts years later and have the Court create an 'implied contract' inserting PSDG in place of J.Ward, Inc." (Doc. 103, p.7). PSDG appears to have forgotten that the Second Amended Complaint also alleges it is liable on an alter ego theory and that the Court denied its motion to dismiss such claim.
In the Second Amended Complaint, Plaintiffs are alleging PSDG was the corporate alter ego for J.Ward. To show alter ego liability, Plaintiffs must establish three elements:
(1) the shareholder dominated and controlled the corporation to such an extent that the corporation's independent existence, was in fact non-existent and the shareholders were in fact alter egos of the corporation;
(2) the corporate form must have been used fraudulently or for an improper purpose; and
(3) the fraudulent or improper use of the corporate form caused injury to the claimant.
Molinos Valle Del Cibao v. Lama, 633 F.3d 1330, 1349 (11th Cir. 2011) (quoting Gasparini v. Pordomingo, 972 So.2d 1053, 1055 (Fla. 3rd DCA 2008) (citations omitted)). As such, information regarding commissions paid to J.Ward may shed light on whether or not J.Ward was controlled by PSDG and/or whether J.Ward was used fraudulently or for an improper purpose.
As for PSDG's objection regarding the time period, it appears from PSDG's response to Interrogatory No. 3, that PSDG and J.Ward entered into an agreement regarding payment of a consulting free in late 2005 or early 2006. Therefore, PSDG shall provide information regarding the commissions paid to J.Ward, as well as the agreement under ...