United States District Court, S.D. Ohio, Eastern Division
SCOTT W. SCHIFF, et al., Plaintiffs,
EXCLUSIVE LEGAL MARKETING, INC., et. al. Defendants.
MICHAEL H. WATSON, JUDGE
OPINION AND ORDER
KIMBERLY A. JOLSON, UNITED STATES MAGISTRATE JUDGE
matter is before the Court on Plaintiffs' Motion for
Sanctions pursuant to Rule 37(b)(2)(A) of the Federal Rules
of Civil Procedure. (Doc. 33). For the reasons that follow,
Plaintiffs' Motion for Sanctions is
GRANTED, but the Court refrains from
awarding any costs and fees until Defendants have had the
opportunity to file any documentation demonstrating an
inability to pay. Thus, Defendant is
DIRECTED to file any such documentation
within seven (7) days from the date of this Order. In
addition, the parties are DIRECTED to meet
and confer in an effort to resolve this issue.
14, 2017, Judge Watson and Magistrate Judge Jolson jointly
conducted the Preliminary Pretrial Conference in this matter.
(See Doc. 13). In an Order memorializing the
conference, Defendants were directed, inter alia, to
“produce promptly any documents regarding the damages
alleged by Plaintiffs in their Complaint.” (Doc. 15).
The next day, Plaintiffs' counsel sent an informal
document request to defense counsel. (See Doc. 33 at
2). As of July 12, 2017, no documents had been produced.
Consequently, the Undersigned held a status conference.
Defendants were once again ordered to produce these documents
within the next fourteen days. (Doc. 16). At that time,
Defendants were warned that if they failed to comply, they
risked being held in contempt of Court. (Id.).
August 2, 2017, Plaintiffs filed a Notice of Noncompliance,
informing the Court that Defendants had still not produced
any documents. (Doc. 17). Although Defendants had turned over
some documents to Plaintiffs on August 8, 2017, the
production was woefully deficient. (See Doc. 18).
Indeed, the responses were neither complete nor responsive
enough to Plaintiffs' requests to even begin to
understand the potential damages in this case. (See
Docs. 18, 19). On August 17, 2017, the Undersigned held
another status conference. (Doc. 19). The message was the
same. The Court made clear that Defendants were risking
contempt of Court and consequently scheduled a Show Cause
Hearing for September 25, 2017. (Id.). Defendants
thus had an additional 39 days to produce the discovery prior
to having to explain to this Court why discovery had not been
September 21, 2017 (four days before the Show Cause Hearing),
Defendants filed a Notice of Compliance stating “that
they [had] complied to the best of the ability to
Plaintiffs' Informal Discovery Requests.” (Doc. 22
at 1). In support, Defendants attached the sworn affidavit of
Defendant Coety Bryant, in which he averred that the reason
Defendant Exclusive Legal Marketing, Inc. (“ELM”)
did not have the requested documents was because
“Exclusive's previous accountant, Stephanie Miller,
improperly maintained records, and likely defrauded, or
embezzled funds from Exclusive.” (Doc. 22-1, PAGEID #:
76). Plaintiffs filed a Response to the “Notice of
Compliance, ” once again highlighting the deficiencies
of the limited documents Defendants had produced and casting
doubt on the veracity of the embezzlement allegations. (Doc.
September 25, 2017, two hours prior to the scheduled Show
Cause Hearing, Defendants filed a Motion to Continue the
hearing, stating that Mr. Bryant was unable to attend due to
a family emergency. (Doc. 25). The Motion was denied, and the
Undersigned held the hearing with only counsel present. (Doc.
26). During the hearing, defense counsel made numerous
representations, including that his client had “turned
over everything they have” (Doc. 29 at 3); that
“[a]s unbelievable as it is, that is what our clients
tell us, that they did not have accounting records and they
did not have agreements for anybody other than what has been
provided” (id. at 4); and that Defendants'
hard drive was “completely erased” and
“they believe that it has to do with Ms. Miller”
(id. at 12).
Show Cause Hearing was subsequently continued until October
10, 2017. (Doc. 28). Plaintiffs' counsel, in the
decided to conduct its own investigation, and obtained via
subpoena the depositions transcripts of Mr. Bryant and his
brother taken on August 17-18, 2017 in the lawsuit Morgan
& Morgan, Fort Myers, PLLC v. Farah & Fara, P.S. and
Exclusive Legal Marketing, Inc., Case No 2017-CA-001782,
currently pending in Florida state court. Counsel for
Plaintiffs reviewed the transcripts, which totaled nearly
five hundred pages, and determined that the representations
regarding Stephanie Miller made by Defendants' Counsel at
the Show Cause hearing were not supported by Mr. Bryant and
his brother's prior testimony. [See Declaration
of Mary R. True, Doc. # 30] Counsel for Plaintiffs also
retained a private investigator to locate Stephanie Miller,
and spoke with her at length on October 6, 2010. Ms. Miller
agreed to provide a sworn declaration, which was filed with
the Court prior to the Show Cause Hearing on October 10, 2017
(Doc. 33 at 3).
the continued Show Cause Hearing, the Court again ordered
Defendants to produce the remaining discovery. (Doc. 31). The
documents at issue were produced to Plaintiffs on October 18,
2017, four months after the Court first ordered the
November 2, 2017, Plaintiffs filed the instant Motion for
Sanctions, explaining that they had spent significant time
and expenses litigating Defendants' discovery
deficiencies. (Doc. 33 at 3). In total, Plaintiffs'
counsel spent over 43 hours litigating discovery issues, and
thus request $13, 897.75 in attorney's fees. (Doc. 33-1).
Specifically, they request fees for their time beginning on
August 2, 2017, through the drafting of the instant motion.
Roger Soroka and Joshua Bedtelyon subsequently withdrew as
counsel for Defendants and filed a Response in opposition to
sanctions on their behalf. (Doc. 40 at 2 (“This
Memorandum addresses only the allegation that sanctions
should be imposed upon Defendants' prior Counsel, and
makes no statement as to whether sanctions may be appropriate
as to Defendants.”)). Defendants Bryant and ELM failed
to file a timely Response. However, on February 16, 2018,
Defendant Bryant filed a Response, purportedly on behalf of
himself and ELM. In addition to being untimely, Defendant
Bryant may not represent ELM, as was previously explained by
the Undersigned. (See Doc. 39). However, in the