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American Home Assurance Co. v. Weaver Aggregate Transport, Inc.

United States District Court, M.D. Florida, Ocala Division

June 23, 2017

AMERICAN HOME ASSURANCE COMPANY, a New York corporation Plaintiff,
v.
WEAVER AGGREGATE TRANSPORT, INC., BEACON INDUSTRIAL STAFFING, INC., THE FARMERS AND MECHANICS BANK and BIS GROUP HOLDINGS, INC. Defendants/Third Party Plaintiff SALVATORE MANZO and SALCOR PROPERTIES, INC. Third Party Defendants

          ORDER

          PHILIP R. LAMMENS United States Magistrate Judge

         Before the Court is a motion to compel filed by Judgment Creditor Weaver Aggregate Transport Inc. (Weaver) in this proceedings supplementary action, (Doc. 363) to which third-party BIS Group Holdings, Inc./Beacon Tristate Solutions (BIS) has responded (Doc. 365). After taking the motion under advisement (Docs. 366, 369), the motion is now ripe. I submit that the motion is due to be granted to the extent set forth herein.

         I. Background

         A. The Proceedings Supplementary Background

         This case has a rather protracted underlying history. For purposes of the instant motion, however, it suffices to say that cross-plaintiff Weaver was awarded judgment and attorney's fees against cross-defendant Beacon Industrial Staffing, Inc. (Beacon) for a total of over four-hundred-thousand dollars. (Docs. 237, 329).

         After obtaining a writ of execution against Beacon (Doc. 340), which remains unexecuted (Doc. 342), Weaver filed a Motion to Institute Proceedings Supplementary alleging that Beacon was unable to fulfill the outstanding payments as it had fraudulently transferred its assets to BIS, which is allegedly Beacon's alter ego. (Doc. 343). Weaver asserts that BIS was incorporated in 2010 and that Beacon transferred its assets to BIS sometime after that. (Doc. 343 at ¶17).

         Also according to Weaver, Beacon and BIS share the same physical address and each have one-thousand shares of stock. (Doc. 343 at ¶19). Weaver further asserts that “BIS” is an acronym for “Beacon Industrial Staffing;” that BIS does business under the name “Beacon” (e.g., BIS's website provides this email address: info@beaconstaff.net); that Beacon's former chief operating officer, Salvonte Manzo, was listed (at the time BIS was incorporated) as the president of BIS; and that BIS has attempted to capitalize upon the goodwill associated with Beacon's name. (Doc. 343 at ¶¶19-20). The Court granted Weaver's motion and impleaded BIS, beginning proceedings supplementary pursuant to Florida Statute § 56.29 and Federal Rule of Civil Procedure 69. (Doc. 348 at 3).

         BIS then moved to dismiss the supplementary proceedings. (Doc. 360). BIS argued, in part, that Weaver had failed to meet the requirements of Florida's recently amended statute, Fla. Stat. § 56.29, which governs supplementary proceedings in aid of execution of judgment. (Doc. 360 at 3).

         The Court rejected BIS's arguments, found that Weaver had complied (or at least substantially complied) with § 56.29 (or that section's previous version), denied the motion to dismiss, and allowed BIS thirty days to show why the judgments at issue should not be levied and executed against it. (Doc. 360 at 7-8). BIS then responded to the order to show cause and asked the Court to reconsider the above-mentioned order arguing that Weaver has presented no evidence that BIS has committed any wrongdoing-i.e., BIS asserted that Weaver has not produced evidence that it fraudulently received assets from Beacon or that it is Beacon's alter ego. (Doc. 361 at 2-3). BIS also argued that it has been denied due process here. (Doc. 361 at 3-6).

         The Court, again, rejected BIS's effort to dismiss this action. (Doc. 364). In denying the motion for reconsideration, the Court noted that the time for presentation of evidence had not yet come and that, to date, there had been no infringement on BIS's due process rights. Also in that order, the Court designated this proceeding as a “Track Two” case under the Local Rules and directed the parties to meet and confer and then file a Case Management Report. (Doc. 364 at 4).

         B. The Motion to Compel

         A few days before the Court designated this case under Track Two, Weaver filed the instant motion. (Doc. 363). In dispute are twelve document requests.

         According to Weaver, the discovery sought relates to its claims that Beacon fraudulently transferred its assets to BIS and that BIS is Beacon's alter ego. The disputed requests seek BIS's client, employee, and officer lists; financial and tax documents; asset lists; and other documentation.[1]

         Attached to the motion was evidence that BIS had declined to produce any documents and, instead, objected to eleven of the twelve requests and responded to one request (Request 7) stating that it held no responsive documents. (Doc. 363-2 at 1-2). The objections to each request are the same: the requests, according to BIS, are “overbroad, unduly burdensome, and not reasonably calculated to lead to admissible evidence, ” with the exception that one of the requests (Request 8) is also vague. (Doc. 363-2). BIS then responded to the motion, argued that Weaver lacked grounds to propound such discovery as Weaver could not recover its judgment from BIS (who is impleaded as a third party here), and noted several purported reasons why Weaver's motion fails to set forth a sufficient basis for relief. (Doc. 365 at 2-5).

         The Court then, given the case's procedural posture, took the motion under advisement. (Doc. 366). Indeed, based on the Track Two designation (and noting that the parties had not yet, at that time, filed their case management report), the Court afforded the parties an opportunity to discuss the disputed discovery during their case management conference and commanded Weaver to notify the Court of what discovery issues, if any, remained. (Doc. 366).

         Weaver has now filed a response to that order. (Doc. 369).[2] Weaver's response, which includes apparent emails between counsel (Docs. 369-1-5), shows that the parties made some headway in narrowing the focus of the discovery dispute before me.

         First, Weaver agreed to narrow all of its requests to 2009 onward, which is one year before BIS's incorporation, as opposed to 2005. (Compare Doc. 363 at ¶4 with Doc. 369 at ¶13). Second, Weaver also agreed to remove subsections “a” and “b” from the eleventh and twelfth requests.[3] (Doc. 369 at ¶13).

         And third, but no less importantly, the email correspondence attached to Weaver's response indicates that Requests 3, 10, 11, and 12 are now moot. For Request 3, the email correspondence shows that, according to BIS's counsel, “BIS does not have employees beyond its officers.” (Doc. 369-5 at 1). As to Request 10, BIS's counsel states that BIS owns no real property. (Doc. 369-5 at 2). And as to Requests 11 and 12, BIS's counsel states that “BIS does not possess documents or communications related to Beacon Enterprises, Inc., Beacon Industrial Staffing, Inc., or Better Integrated Systems, Inc.”[4] (Doc. 369-5 at 2). Thus, the remaining requests at issue-for purposes of the motion before the Court-are Requests 1, 2, 4-6, 8, and 9.

         II. ...


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