United States District Court, N.D. Ohio, Eastern Division
MEMORANDUM OF OPINION AND ORDER
PATRICIA A. GAUGHAN United States District Court Chief Judge
matter is before the Court upon Defendant's Motion to
Compel Compliance with Subpoena (Doc. 39) and NonParty Magnus
International Group, Inc.'s Renewed Motion to Quash
Subpoena (Doc. 40). For the reasons discussed below,
Defendant's motion to compel is granted, and Magnus's
renewed motion to quash is denied.
January 6, 2017, this Court confirmed the June 23, 2016
arbitration award in favor of Defendant Agri Trading, which
awarded Agri Trading a total of $1, 280, 064 in damages and
$146, 568 in attorney's fees. Since then, Agri Trading
has unsuccessfully sought to recover on the award from
Plaintiff Hardy Industrial Technologies, LLC.
Trading engaged in discovery in an effort to obtain
information about Hardy's assets on which execution can
issue. During discovery, Hardy produced a credit agreement
with KeyBank National Association entered into jointly with
Magnus International Group, Inc., Hardy's parent
corporation. Hardy also produced its corporate banking
statements from KeyBank, checks drawn on a Magnus account at
KeyBank, and commercial loan statements from KeyBank issued
to Magnus. (Doc. 39, at 3). Hardy's bank statements show
that, over the past three and a half years, Hardy has
transferred millions of dollars to the account number shown
on Magnus's checks. Because of these transfers,
Hardy's account has a zero balance by the end of every
month. According to Agri Trading, Hardy has transferred more
than $4 million to Magnus so far this year, but Hardy refuses
to produce any other KeyBank documentation explaining the
transfers. It also refuses to produce any other documents
regarding the joint credit agreement with Magnus and KeyBank,
although Hardy has claimed that the agreement prohibits it
from satisfying Agri Trading's judgment.
Hardy refused to produce this information, Agri Trading
issued a subpoena to KeyBank on August 16, 2017. According to
Agri Trading, its requests of KeyBank “seek documents
related to the transfer of assets that [Hardy] may have made
to its parent corporation Magnus... and Hardy's
indebtedness to KeyBank.” (Doc. 39, at
KeyBank produced copies of Hardy's corporate account
statements. It refuses to produce other responsive documents
without a court order, however, because “they evidence
or relate to both parties' (and others') intertwined
credit relationships with KeyBank.” (Doc. 37-2, at 2).
for Agri Trading, Hardy, and KeyBank met and conferred but
were unable to resolve their dispute. Agri Trading now moves
to compel KeyBank to comply with the subpoena. Magnus opposes
Agri Trading's motion and moves to quash the subpoena.
KeyBank has not responded to Agri Trading's motion to
compel or joined in Magnus's motion to quash.
Rule of Civil Procedure 69(a)(2) permits a judgment creditor
to obtain discovery in aid of the judgment or execution from
“any person” as provided in the Federal Rules,
including through a subpoena issued under Rule 45. The scope
of post-judgment discovery is 4. All documents that refer to,
relate to, mention and/or involve [certain identified] loans.
documents that refer to, relate to, mention, and /or involve
the signatories or guarantors on any bank account, checking
account, certificate of deposit, mutual fund or letter of
credit, held in the name of or on behalf of Hardy or Magnus
from January 1, 2011 to the present or pursuant to the terms
of the Credit and Security Agreement.
documents concerning the Credit and Security Agreement,
including all supporting documentation, guarantees, financial
statements, notices, and communications between, by or on
behalf of KeyBank and Hardy or Magnus, and/or any guarantors.
documents that relate to, refer to, mention and/or involve
any loans or letters of credit, including any revolving
loans, term loans, or CapEx loans, obtained or sought by
Hardy orMagnus, under the terms of the Credit and Security
Agreement, including all supporting documentation, notices,
notes, payments, and communications between, by or on behalf
of KeyBank and Hardy or Magnus, and/or any guarantors.
documents concerning any liens asserted against or attached
to Hardy and/or Magnus by KeyBank, including all supporting
documentation, and communications between, by or on behalf ...