United States District Court, N.D. Illinois
February 26, 2004.
CIRCLE GROUP INTERNET, INC., Plaintiff,
ATLAS, PEARLMAN, TROP & BORKSON, P.A., ROXANNE K. BEILLY, CHARLES B. PEARLMAN and ELLA CHUSTNUTT, Defendants
The opinion of the court was delivered by: JOAN H. LEFKOW, District Judge
AMENDED MEMORANDUM OPINION AND ORDER
Defendants, Atlas, Pearlman, Trop & Borkson, P.A., and others, in
Case No. 02-61082 (S.D. Fla.), filed a petition in this court to enforce
a subpoena served on U.S. Bank ("bank"), located in Mundelein, Illinois,
for a deposition of a witness designated under Fed.R.Civ.P. 30(b)(6).
At the hearing on the motion, the dispute was resolved in part when
defendants agreed to serve a subpoena on the 30(b)(6) witness, Mario
Valente, in his individual capacity. Remaining before the court is
whether defendants are entitled to recover their attorney's fee and
expenses based on bank's counsel's improper coaching of the witness and
improper instructions to the witness not to answer certain questions
propounded during the 30(b)(6) deposition. Bank contends that the
questions were improper because they were not within the scope of the
30(b)(6) notice and, therefore, answers were properly refused.
The 30(b)(6) deposition subpoena identified three areas to be covered
in the deposition: (1) the accounts at [bank] held in the name of
plaintiff; (2) the receipt by the bank of a certain
draft; and (3) the policies, procedures, rules and regulations
governing the receipt of checks and drafts for deposit and/or collection
during a particular period. The questions and remarks at issue (Exh. B to
petition) are the following:
(1) Private conferences during deposition
After answering "No" to a question whether
"[i]n 1999 was Circle Group one of [bank's]
larger accounts," the witness begins to
speak again before another question is
asked. Bank's counsel interrupts and
suggests they confer outside the presence
of defendants' counsel. After the
conference, the witness changes his answer,
stating, "I would like to change that to,
really, I don't know because, you know, I
don't know the other accounts, all the
accounts at the bank." (Exh. B, pp. 20-22.
Later, a dispute arises over whether
counsel is allowed to take the witness out
of the room for a second conference after
the witness is asked whether he has any
personal or business relationship with an
individual "Halpern" (principal of
plaintiff) or Circle Group (p.28); after
such conference, the witness answered the
pending question (p. 30).
(2) Instructions to witness
Counsel directs witness not to guess after
witness stated he didn't remember hether
Halpern asked him to send a letter "but he
must have." (pp. 25-26);
counsel objects to follow up questions
about sending the letter to Halpern,
stating the question assumes facts not in
evidence (pp. 26-27);
After 14 additional questions about the
witness's personal dealings with Circle
Group, bank's counsel objects on the
grounds of relevance within the 30(b)(6)
notice and advises counsel to serve an
individual notice of deposition on the
witness (pp. 33-34);
Counsel directs the witness not to answer a
question as to whom the witness might have
enlisted to purchase shares of Circle Group
other than himself (possibly referring to
other bank customers) on basis that it is
beyond scope of deposition notice (pp.
37-38); bank counsel states, "If you feel
that I am wrong, then we can adjourn the
deposition and you can file whatever motion
you deem proper;" thereafter, all such
questions were not answered (pp. 39-43).
Rule 30(b)(6) requires a designated deponent to "testify as to matters
known or reasonably available to the organization." Rule 30(d)(1)
requires objections to be "stated concisely and in a non-argumentative
and non-suggestive manner and permits refusals to answer "only when
necessary to preserve a privilege, to enforce a limitation directed by
the court, or to present a motion under Rule 30(d)(4)." Rule 30(d)(3)
permits the court to impose "an appropriate sanction" on a person who
"has frustrated the fair examination of [a] deponent." Rule 30(d)(4)
permits a deponent to move the court for a protective order "upon a
showing that the examination is being conducted in bad faith or in such
manner as unreasonably to annoy, embarrass, or oppress the deponent or
party. . . . Upon demand by the objecting party or deponent, the
taking of the deposition must be suspended for the time necessary to make
a motion for an order." Defendants have cited and the court knows of no
rule that prohibits a witness from consulting with counsel before the
witness answers a question.
Applying these rules, the court finds as follows:
(a) Defendants have failed to demonstrate that bank's counsel acted
improperly in having two private conversations with the witness. The
transcript demonstrates that the first conference arose when no question
was pending; thus, a motive to influence an answer is unlikely. The
second conference occurred once the questions turned to matters outside
the knowledge of the bank, i.e., the witness's personal affairs.
As to this, counsel in response to the petition states that he believed
the witness and the bank may have had a conflict of interest and he could
not represent the witness individually. This is a reasonable basis for an
immediate attorney-deponent conference.
(b) Had counsel followed Rule 37(d)(4), there would be no question that
the deposition could have been properly suspended pending a ruling on the
motion. The parties were at an impasse and the only available resolution
was such a motion. Bank counsel in directing the witness not to answer
did not state his intention to seek a protective order from the court.
Although the response to the motion professes that intention, it is
belied by the record in that counsel at the critical time merely stood on
his relevance objection and offered defendants' counsel the opportunity
to make a motion. The rules put the burden of making a motion on the
objecting party and thus bank counsel should bear defendants' expense of
presenting the motion.
(c) Had a motion for protective order been brought to this court, in
other words, as to the issue presented in defendants' petition, the court
concludes that the questions exceeded the bounds of Rule 30(b)(6) and
defendants' counsel persistence in asking personal capacity questions
became oppressive after bank counsel attempted to accommodate the
deposing party by answering approximately 15 questions outside the
notice. (Although defendants' counsel professes to an oral notice
expanding the notice of deposition, bank counsel denies it. In light of a
dispute of fact which cannot practicably be resolved, the court will rely
as to scope solely on the notice of deposition.)
(d) The remaining objections interposed by bank counsel were
sufficiently concise, non-argumentative and non-suggestive to comply with
In summary, because bank counsel failed to follow Rule 37(d) to obtain
relief, defendants' motion for sanctions under Rule 30(d)(3) is granted.
Defendants are allowed a reasonable attorney's fee for bringing the
petition to enforce subpoena. Because the objections to the questions
were well grounded, however, defendants have suffered no damage because
bank's failure to seek a protective order. Therefore, no fees or
expenses are awarded relating to the resumption of the deposition.
The petition to enforce subpoena is denied. Defendants' motion for
attorney's fee sanction is granted. Defendants' counsel and bank's
counsel are directed to attempt to resolve the amount of the fee without
further order of court. If they are unable to resolve the matter,
defendants are given until March 15, 2004 to submit a declaration of fee.
Objections may be filed by March 29, 2004. U.S. Bank's motion to strike
affidavit of H. Steven Vogel is denied; the alternative motion for leave
to file counter-affidavit is granted.
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