United States District Court, M.D. Florida, Tampa Division
HONORABLE CHRISTOPHER P. TUTTE UNITED STATES MAGISTRATE
cause is before the Court on Plaintiff Dragon Jade's
Motion for Sanctions Pursuant to Fed.R.Civ.P. 37 (Doc.
148) and the response in opposition filed by Defendants
Ultroid, LLC, Ultroid Marketing Development Corp., and
Ultroid Technologies, Inc. (collectively, Ultroid) (Doc.
154). For the reasons discussed below, Dragon Jade's
motion is granted in part and denied in part.
Jade initiated this action in October 2017, asserting that
Ultroid breached two agreements between the parties. (Doc.
1). As described in Dragon Jade's complaint, one of these
agreements (the Option Agreement) granted Dragon Jade the
option to purchase particular assets of Ultroid provided
Dragon Jade satisfied certain conditions (Doc. 1-1), while
the other agreement (the Security Agreement) set forth the
terms of security and collateral for the Option Agreement.
(Doc. 1-2). Michael Knox, an executive at one or more of the
Ultroid entities at the time, executed both agreements on the
companies' behalf. (Docs. 1-1, 1-2).
answered Dragon Jade's complaint in February 2018 and
asserted various affirmative defenses and counterclaims, the
latter of which it amended a year later. (Docs. 40, 126). Of
relevance here, Ultroid's amended counterclaims were
predicated on, among other allegations, that Knox lacked the
legal authority to bind Ultroid to the Option and Security
Agreements, and that the Agreements were entered into under
fraudulent and coercive circumstances. (Doc. 126). In support
of these allegations, Ultroid asserted, inter alia,
that Dragon Jade's representatives bribed and extorted
Knox into signing the Agreements, including by paying him
more than $15, 000 and threatening to release embarrassing
photographs of him in compromising positions taken during his
visits to Hong Kong. Id. at 6, 11-14.
the course of discovery, Dragon Jade propounded numerous
requests on Ultroid, including document requests served in
April 2018. (Doc. 160-1). By way of those document requests,
Dragon Jade sought the disclosure of, among other items, all
materials evidencing and/or supporting Ultroid's
allegation that “Dragon Jade threatened to release
embarrassing and inappropriate photographs that its
representatives had taken of Mr. Knox during his visits to
Hong Kong . . .” (Request No. 49); and all documents
evidencing and/or supporting Ultroid's statement that
“Dragon Jade used threat(s), intimidation,
manipulation, coercion, blackmailed, and/or fraud to get Mr.
Knox to execute the Agreements on behalf of Ultroid”
(Request No. 54).
responded to Dragon Jade's production requests in May
2018 (Doc. 160-2) and, contemporaneously with that
production, provided a privilege log identifying only one
item-an April 23, 2018, valuation of Ultroid (Doc. 148-1).
six months later, in late November 2018, Dragon Jade
commenced Knox's deposition. (Docs. 159-2, 159-3). Knox
was represented by counsel at that deposition and was
questioned for approximately four hours by Dragon Jade's
attorney. Id. At the beginning of the deposition,
Dragon Jade asked Knox, “before today, have you spoken
to anyone other than your attorney about any of the facts or
issues in this lawsuit?” (Doc. 159-2 at 9). Knox
answered, somewhat non-responsively, that he had not
“spoken to anybody about [his] testimony.”
Id. During the remainder of the deposition, Knox
asserted his Fifth Amendment rights multiple times on advice
of counsel and refused to answer certain questions related to
his involvement with the Dragon Jade/Ultroid interactions and
Agreements. Id. Due to scheduling issues, Knox's
deposition was suspended with the understanding that it would
continue at a future date. (Doc. 159-3 at 34-35).
two weeks later, on December 2, 2018, Ultroid served Dragon
Jade with an amended privilege log, disclosing for the first
time the existence of a “Transcript of sworn statement
of Michael Knox” (the Sworn Statement), which had been
taken on January 30, 2018, and which Ultroid claimed to be
protected under both the work product doctrine and the
attorney-client privilege. (Doc. 148-2). The amended
privilege log stated that Knox gave this statement while
still employed by Ultroid and that it described “the
circumstances of negotiation and execution of the Option and
Security Agreements and the relationship between Dragon Jade
and the Ultroid Companies.” Id.
discovery period closed on December 6, 2018, four days after
Ultroid's service of its amended privilege log. (Doc.
74). The Court, however, allowed certain limited discovery
after this deadline, including the continuation of Knox's
deposition. (Doc. 106).
deposition resumed on January 15, 2019. (Doc. 159-4). During
that proceeding, Knox-who was again represented by
counsel-asserted his Fifth Amendment rights and refused to
answer any substantive questions. Id.
mid-June 2019, both Dragon Jade and Ultroid moved for partial
summary judgment. (Docs. 133, 134). Ultroid responded to
Dragon Jade's motion two weeks later and included with
its response excerpts from Knox's Sworn Statement (Doc.
138-3), which Ultroid claims demonstrate disputed issues of
fact (Doc. 138 at 3-8). At Dragon Jade's request, Ultroid
emailed Dragon Jade's counsel a complete copy of the
Sworn Statement on July 9, 2019. (Doc. 148-4).
Jade now requests that the Court sanction Ultroid pursuant to
Federal Rule of Civil Procedure 37(c)(1) by precluding it
from using Knox's Sworn Statement. (Doc. 148). In support
of this request, Dragon Jade argues that Ultroid failed to
timely disclose the Sworn Statement's existence during
discovery and instead improperly withheld it as
attorney-client and work-product protected only to
subsequently “ambush” Dragon Jade in an effort to
defeat Dragon Jade's partial summary judgment motion.
Id. In addition, Dragon Jade asks that Ultroid be
ordered to produce all withheld documents pertaining to the
Sworn Statement and to pay Dragon Jade's reasonable
expenses caused by Ultroid's belated disclosure.
response, Ultroid argues that, “out of an abundance of
caution, ” it timely and adequately disclosed the
existence of the Sworn Statement in its amended privilege
log, but later decided to waive the attorney-client and
work-product protections so that it could use the ...