Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Jon Domanus, et al v. Derek Lewicki

December 14, 2012

JON DOMANUS, ET AL., PLAINTIFFS,
v.
DEREK LEWICKI, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Magistrate Judge Mary M. Rowland

MEMORANDUM OPINION AND ORDER

Plaintiffs have moved to compel the production of documents withheld pursuant to the attorney-client privilege by Defendants. For the reasons stated below, the Motion is granted in part and denied in part. Defendants shall produce all of the communications and documents described on the privilege log by December 21, 2012.

I. BACKGROUND

This action arises out of Plaintiffs' allegations of a complex, bicontinental racketeering and fraud scheme spanning over ten years. On August 28, 2008, Plaintiffs, who are shareholders in Krakow Business Park Sp.z o.o. ("KBP"), brought an action alleging a pattern of fraud and deceit, corporate looting and misappropriation of corporate funds, and money laundering by various individual and corporate defendants. Plaintiffs have named KBP and its wholly owned subsidiaries (the "KBP Entities") as derivative defendants in this action, but seek no relief from these entities.

Plaintiffs assert direct and derivative claims under 18 U.S.C. § 1962 ("RICO"), as well as liability under several common law theories including fraud, conversion, breach of fiduciary duty, tortious interference with prospective business advantage and civil conspiracy.

The gravamen of the Third Amended Complaint is that the direct Defendants, led by Derek Lewicki, Richard Swiech, and his brother, Adam Swiech, working with each other and with and through a host of foreign and domestic corporations that they control, engaged in a pattern of misconduct designed to rob the KBP Entities of their assets, in order to finance real estate developments in suburban Chicago. The KBP Entities are controlled by Defendants Richard Swiech and Bozena SaneckaSwiech, along with Defendant Adam Swiech's wife, Alicja Gostek-Swiech. The Complaint describes four types of misconduct: (1) sham contracts and payments for inadequate consideration; (2) self-dealing leases; (3) land misappropriation; and (4) construction kickbacks. Defendants reported proceeds generated by their misconduct as capital contributions by Adam Swiech, who then claimed to be the majority shareholder of KBP. These sham contributions diluted the shareholdings of Plaintiffs, who contend that they are the rightful majority shareholders of KBP, although they currently appear on the books as minority shareholders.

The direct Defendants are represented solely by Fuksa Khorshid, LLC. In October 2011, Locke Lord LLP appeared on behalf of the KBP Entities, the derivative defendants. In February 2012, Plaintiffs sought to disqualify Locke Lord, arguing that it was violating the Rule of Corporate Neutrality by siding with the direct De- fendants in this litigation. On May 29, 2012, the District Court granted Plaintiff's motion, finding that Locke Lord and the KBP entities had violated the Neutrality Rule. (Dkt. 520 at 12--16). The Court stated that because the KBP Entities are the real party in interest, they may not participate in this action on the merits unless the lawsuit threatens rather than advances the KPB Entities' interest. (Id. 5). Judge Bucklo also found that the direct Defendants improperly influenced the KBP Entities' handling of this matter, and that the KBP Entities were violating their obligation to remain neutral. (Id. 9--12). Accordingly, she disqualified Locke Lord as the KBP Entities' counsel. (Id. 2, 16--17).

On July 23, 2012, Plaintiffs served Defendants with document requests seeking:

1) All communications (whether direct or indirect) between any Defendant and any person employed by or associated with the law firm Locke Lord LLP.

2) All documents that any Defendant (directly or indirectly) provided to or showed to any person employed by or associated with the law firm Locke Lord LLP.

3) All documents that any person employed by or associated with the law firm Locke Lord LLP, . . . provided to or showed to any Defendant (whether directly or indirectly). (Dkt. 604-1, Ex. B). Defendants responded to each request with the same objections: "Defendants object to this request because it seeks documents that are not relevant and not reasonably calculated to lead to the discovery of admissible evidence. Defendants further object on the basis that the request seeks privileged information." (Id. Ex. C). Defendants did not produce any documents, and despite the claim of privilege, failed to provide a privilege log. (Id. ¶ 4).

On October 16, 2012, Plaintiffs filed a Motion to Compel, arguing that the requested discovery is both relevant and not subject to any claims of privilege. (Dkt. 602 at 6--8). Plaintiffs also request an award of fees and costs for bringing their motion. (Id. 8--9). On October 26, 2012, Defendants filed a response, and on October 29, 2012, Plaintiffs filed their reply.

At a hearing on October 30, 2012, the Court found the requested information relevant and ordered Defendants to produce a privilege log. On November 9, 2012, Defendants produced a privilege log and filed a supplemental response to the ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.