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Hall v. Sargeant

United States District Court, S.D. Florida

August 7, 2019

DANIEL HALL, et al., Plaintiffs,
v.
HARRY SARGEANT, III, Defendant.

          DISCOVERY ORDER

          BRUCE REINHART UNITED STATES MAGISTRATE JUDGE.

         This matter is before the Court on remand from the District Court's Order granting Plaintiff's appeal from my Order Regarding Discovery Disputes. DE 289. The parties have raised additional discovery issues, which are summarized in their Joint Discovery Memorandum. DE 307. On August 1, 2019, a discovery hearing was held. Defendant requested leave to submit supplemental briefing, which was granted. I have now received and reviewed the supplemental briefing. These matters are ripe for decision.

         The Federal Rules of Civil Procedure require the Court to secure the “just, speedy, and inexpensive determination of every action and proceeding.” Fed.R.Civ.P. 1. For that reason, Federal Rule of Civil Procedure 26(b)(1) limits discovery to “nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.” Fed.R.Civ.P. 26(b)(1). “Evidence is relevant if: (a) it has any tendency to make a fact more or less probable than it would be without the evidence; and (b) the fact is of consequence in determining the action.” Fed.R.Evid. 401. A party to federal civil litigation does not get discovery of every piece of relevant information. To effectuate the commands of Rule 1 and Rule 26(b)(1), there comes a point when enough is enough.

         The Joint Discovery Memorandum identifies the following four issues for decision: (1) “whether [Defendant Harry Sargeant III] must produce to Plaintiffs all documents reflecting facts of which [Harry Sargeant's] counsel was aware at the time of the filing of the Second Amended Complaint (‘SAC') in Harry Sargeant III v. Maroil Trading, Inc., No. 17-81070-Bloom/Reinhart (S.D. Fla. Sept. 25, 2017) (the ‘Related Federal Action') related to the factual allegations and legal claims set forth in the SAC, ” (2) the permissible scope of the trial testimony of Gregory Coleman, Esq., (3) whether certain documents are properly designated as confidential under the Court's confidentiality order, DE 111, and (4) whether Defendant should have discovery of “certain communications related to an agreement between Burford Capital (UK) Limited and Novoship entities.” See generally DE 307.

         I have entered multiple orders detailing the procedural history of this matter and the evidentiary issues it presents. E.g., DE 198 (Order Regarding Discovery Disputes); DE 145 (Order Memorializing Discovery Rulings); DE 155 (Order granting Motion to Dismiss Counterclaims); DE 41 (Report and Recommendation on Motion to Dismiss Complaint). I will not recount them, here. In short, Harry Sargeant settled a long-standing dispute with Mohammed Al-Saleh (the “Al-Saleh Settlement”). Later, Harry Sargeant sued Daniel Hall and others in the Related Federal Action. In that case, Harry Sargeant alleged that Hall and the others hacked into a protected computer to obtain certain sensitive material belonging to Harry Sargeant (the “HS3 Material”), then disseminated the HS3 Material, including traded the HS3 Material for other materials that were of value to a different client of Hall's (the “Ruperti Material”). I recommended dismissal of the SAC without prejudice. Rather than refile the case in federal court, Harry Sargeant filed a revised version of the SAC in state court. Before he could do so, however, Plaintiffs filed the instant case, which asserts two causes of action: breach of the Al-Saleh Settlement and malicious prosecution.

         1. Production of Defense Counsel's Work Product

         The first issue before the Court is Plaintiffs' request for discovery of certain documents that Defendant asserts are protected by the work-product doctrine (“the Requested Documents”). Plaintiffs argue that they are entitled to the Requested Documents in support of their malicious prosecution claim.

         The elements of a cause of action for malicious prosecution are:

(1) an original criminal or civil judicial proceeding against the present plaintiff was commenced or continued; (2) the present defendant was the legal cause of the original proceeding against the present plaintiff as the defendant in the original proceeding; (3) the termination of the original proceeding constituted a bona fide termination of that proceeding in favor of the present plaintiff; (4) there was an absence of probable cause for the original proceeding; (5) there was malice on the part of the present defendant; and (6) the plaintiff suffered damage as a result of the original proceeding.

Debrincat v. Fischer, 217 So.3d 68, 70 (Fla. 2017) (citation omitted). For malicious prosecution purposes, probable cause exists if there is “‘[a] reasonable ground of suspicion, supported by circumstances sufficiently strong in themselves to warrant a cautious man in the belief that the person accused is guilty of the offense with which he is charged.'” Mee Indus. v. Dow Chem. Co., 608 F.3d 1202, 1211 (11th Cir. 2010) (citation omitted). “Lack of probable cause can be shown ‘[w]here it would appear to a ‘cautious man' that further investigation is justified before instituting a proceeding,' and such investigation is not undertaken.” Nodal v. Infinity Auto Ins. Co., 2011 WL 3297277, at *2 (M.D. Fla. Aug. 2, 2011) (quoting Harris v. Lewis State Bank, 482 So.2d 1378, 1382 (Fla. Dist. Ct. App. 1986)). Which “‘facts and circumstances amount to probable cause is a pure question of law,' while the existence of those facts or circumstances ‘in any particular case is a pure question of fact.'” Mee Indus., 608 F.3d at 1211-12 (citing and quoting City of Pensacola v. Owens 369 So.2d 328, 330 (Fla. 1979)) (internal quotation marks omitted).

         “In an action for malicious prosecution it is not necessary for a plaintiff to prove actual malice; legal malice is sufficient and may be inferred from, among other things, a lack of probable cause, gross negligence, or great indifference to persons, property, or the rights of others.” Alamo Rent-A-Car, Inc. v. Mancusi, 632 So.2d 1352, 1357 (Fla. 1994). “Legal malice, which is also referred to as technical malice or malice in law, ‘requires proof of an intentional act performed without justification or excuse.' ‘Legal malice may be inferred from one's acts,' and -unlike actual malice - ‘does not require proof of evil intent or motive.'” Olson v. Johnson, 961 So.2d 356, 359 (Fla. Dist. Ct. App. 2007) (citations omitted).

         In or about November 2018, Plaintiffs served their First Set of Requests for Production. Request 17 sought “All Documents upon which you relied in support of the allegations in the SAC in the Related Federal Action.” Request 18 sought, “All Documents concerning your motive, purpose, or intent in bringing the SAC, in the Related Federal Action.” Request 19 sought, “All documents concerning your investigation of the factual and/or legal basis for the claims asserted in the SAC in the Related Federal Action. Request 20 sought, “All documents concerning your motive, purpose, or intent in voluntarily dismissing the SAC in the Related Federal Action.” And Request 21 sought, “All Documents concerning your decision not to assert a claim for violation of the Computer Fraud and Abuse Act in the State Court Action.”

         On or about December 21, 2018, Defendant served his response. DE 181-1. As to each of these requests, Defendant stated that he would produce responsive documents.[1] He further stated that he had “identified privileged responsive documents to this Request, which [Defendant] will list on his privilege log pursuant to Local Rule 26(e)(2)(C).” DE 181-1 at 10-11. On January 28, 2019, Defendant served a privilege log which identified 484 documents that were being withheld based on claims of either attorney-client or work-product privilege. DE 181-2. Documents numbered 1-275 were communications among members of Defendant's legal team (collectively “Defense Counsel”) during January and February 2018. DE 181-2 at 2-18. Plaintiffs now seek to compel production of these documents as relevant to their malicious prosecution cause of action, primarily on the issue of whether probable cause existed for the SAC and (derivatively) whether legal malice existed.

         Plaintiffs have been afforded a robust opportunity to develop their theory that Defendant lacked probable cause to file the SAC and therefore also had legal malice. Defendant produced documents responsive to Plaintiffs' Requests for Production concerning the factual basis for the SAC. Plaintiffs propounded an interrogatory to Defendant asking for “the factual basis you had at the time of the filing of the SAC that ‘[o]n or about October 6, 2016, and again on or about October 28, 2016, DSargent and LAIL unlawfully accessed the Sargeant Server and the HS3 Email Account in Florida, and obtained the HS3 Material from the HS3 Email Account.” (quoting paragraph 36 of the SAC). In response, the Defendant identified three sources of information that were the factual basis for these allegations in the SAC: (1) Andrew Preston's affidavit, (2) conversations with Patrick Mooney, and (3) conversations with Fahad Al Tamimi and Wilmer Ruperti. 8/1/2019 Hrg. Exs. 1, 2.

         Plaintiff has been able to investigate each of the bases identified in the interrogatory response. Plaintiff deposed Harry Sargeant about the facts known to him when the SAC was filed and his knowledge of the investigation that led to those facts. At the discovery hearing, it was proffered that Harry Sargeant did not identify any additional sources of information for the SAC, and that he had testified that he, attorney Christopher Kise, and perhaps other counsel met with Al Tamimi in late 2017. Harry Sargeant further testified that Al Tamimi told them Daniel Sargeant had HS3's “sex tapes” and had given them to an investigator. Harry Sargeant testified that Al Tamimi did not say anything about how Daniel Sargeant obtained the “sex tapes.” The Preston affidavit speaks for itself. Mr. Mooney has been deposed; counsel proffered that Mr. Mooney testified that in 2018 he told Harry Sargeant's counsel that in 2015 Daniel Sargeant told Mr. Mooney he could access the HS3 Material. ...


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