SABRE INDUSTRIES, INC., Plaintiff, v. Travis WALLER and Accurate Probuild Solutions, LLC, Defendants. Travis Waller, Counter-Plaintiff, v. Sabre Industries, Inc., Counter-Defendant Case No. 18-2111 United States District Court, C.D. Illinois, Urbana Division Signed December 22, 2021 Counsel Kenneth M. Wentz, III, Jackson Lewis PC, Omaha, NE, Julia Pearce Argentieri, Jackson Lewis PC, Chicago, IL, for Plaintiff/Counter-Defendant. Ann Glavan, Randall B. Gold, Fox & Fox SC, Monona, WI, for Defendant/Counter-Plaintiff Travis Waller. Randall B. Gold, Fox & Fox SC, Monona, WI, for Defendant Accurate Probuild Solutions LLC. Long, Eric I., United States Magistrate Judge ORDER *1 This case is before the Court on two motions filed by Plaintiff, Sabre Industries, Inc. (“Sabre”). First, Sabre filed an Emergency Motion to Suspend the Transfer of Assets and Order Complete Disclosure and Document Production Surrounding All Assets Related to Defendant Travis Waller, Meredith Turner, and All Corporate Entities in Which Waller and/or Turner Have an Ownership Interest (#56). Defendants filed a Response (#62) in opposition. Second, Sabre filed an Expedited Motion to Order Defendants to Comply with Prior Court Orders and Supplement Discovery for Trial (#57). Defendants filed a Response (#63) in which they argue that some of Sabre's requests are moot and others should be denied. For the reasons provided below, Sabre's Emergency Motion (#56) is granted in part and denied in part, and Sabre's Expedited Motion to Order Defendants to Comply with Prior Court Orders and Supplement Discovery for Trial (#57) is granted in part and denied in part. I. Emergency Motion to Suspend the Transfer of Assets and Order Complete Disclosure and Document Production (#56) Sabre filed its Complaint in April 2018, alleging that Waller breached his fiduciary and contractual duties to Sabre by forming a competing business, Accurate Probuild Solutions, LLC (“APS”), while still employed by Sabre. Discovery closed October 30, 2021, and this case is set for trial on June 28, 2022. Sabre filed its Emergency Motion after it discovered that one of Sabre's customers, SNC, sent communications to Defendant Waller's fiancé, Meredith Turner, at her personal e-mail address. Sabre's Motion asks the Court to: 1. Suspend the transfer of assets of Defendant Travis Waller, Waller's fiancé Meredith Turner, and entities in which Waller and/or Turner have an ownership interest; 2. Require Travis Waller, Meredith Turner, APS, Skyline Industries, Inc. and any other entities in which Waller and/or Turner have an ownership interest to turn over complete financial records related to all such persons and entities for purposes of review by Plaintiff toward discovery of the full extent of dissipation of assets; 3. Require a third-party computer forensics recovery of email address lbcatcher1@aol.com for correspondence and documents related to APS, Waller, and any of the overlapping customers at issue in this case; and 4. Require Waller, Turner, APS, and Skyline to produce all invoices, purchase orders, and related communications from Skyline from September 1, 2019 through the present. a. Transfer of Assets First, Sabre asks the Court to suspend the transfer of assets of Defendant Waller, Turner, and entities in which Waller and/or Turner have an ownership interest. Sabre supports its request to freeze assets with a single paragraph in its Motion: In addition to requesting a full disclosure of all financials related to Waller, Turner, and any companies owned (in whole or in part) by Waller or Turner, Sabre further requests that the Court suspend the further transfer of any assets to avoid Waller and Turner continuing to play games with corporate entities to become judgment-proof. Specifically, Sabre requests that the Court bar Waller and Turner from moving assets between accounts, between companies, or into any new companies which would allow them to continue to evade providing accurate information to the Court and Sabre about the extent of APS's business and its ability to satisfy a judgment. *2 Sabre does not cite to any case or statute under which it is seeking control of Defendants’ assets prior to the entry of a judgment. Sabre is essentially seeking an injunction to freeze the assets associated with Waller and his related entities.[1] Sabre's only argument is that because it prevailed on several claims at summary judgment, the only question remaining for those claims is damages. To obtain a preliminary injunction, “the moving party must show that its case has some likelihood of success on the merits, that no adequate remedy at law exists, and that it will suffer irreparable harm if the injunction is not granted.” Personal PAC v. McGuffage, 858 F.Supp.2d 963, 966 (N.D. Ill. 2012), citing Ty, Inc. v. Jones Group, Inc., 237 F.3d 891, 895 (7th Cir. 2001). Sabre has made no attempt to show any of the required elements to justify a preliminary injunction, other than showing that its case has a likelihood of success on the claims for which Sabre was already awarded judgment at the summary judgement stage. Because Sabre has shown no legal justification for freezing Defendants’ assets, Sabre's initial request for the Court to suspend the transfer of assets of Defendant Waller, Turner, and entities in which Waller and/or Turner have an ownership interest is denied. b. Financial Records and Email Recovery Next, Sabre asks the Court to: 1. Require Waller, Turner, and all entities in which Waller and/or Turner have an ownership interest to turn over complete financial records; 2. Require a third-party computer forensic recovery of email address lbcatcher1@aol.com for correspondence and documents related to APS, Waller, and any of the overlapping customers between APS and Sabre; and 3. Require Waller, Turner, APS, and Skyline to produce all invoices, purchase orders, and related communications from Skyline from September 1, 2019 through the present. The Court's analysis on these three requests turns on Sabre's allegation that Waller has fraudulently dissipated assets or disguised business deals, at least in part, by utilizing Turner's newly formed company, Skyline Infrastructure LLC (“Skyline”).[2] As a result, the Court will consider these requests together. First, Sabre seeks to review the financial records to ascertain whether and how much asset dissipation occurred. Sabre's prior Motion to Compel sought complete financial statements, tax return documents, bank statements, and loan documents. The Court found that Sabre's request for tax return documents, bank statements, and loan documents was too broad and compelled Defendants “to produce APS's financial statements from June 2019 through June 2020.” (Order #32, p. 6-7.) The Court noted that “[i]f the case proceeds to trial, Defendants will be required to supplement this disclosure to show their current net worth at the time of trial.” (Order #32, p. 7.) In a footnote, the Court clarified that “[i]f there is any indication that Defendants have intentionally dissipated assets, this request might be subject to reconsideration.” (Order #32, p. 7, n.4.) *3 Sabre argues that sufficient evidence of dissipation exists now to justify requiring Defendants to produce more than just APS's financial statements. Sabre requests complete financial records for Waller and Turner and for all entities in which Waller, and/or Turner have a financial interest. Sabre's only justification for asking for this extensive record production is an email sent to Waller's fiancé and APS employee Meredith Turner's personal email address: lbcatcher1@aol.com.[3] Sabre alleges that SNC, a known customer of both Sabre and APS, sent communications to Turner's personal email address in November 2019 (two years after Waller left Sabre). Defendants argue that SNC's email to Turner's personal email included a proposal related to work for Skyline and was unrelated to APS. (Exhibit C to Plaintiff's Motion, #56-3). Sabre argues that the email was related to APS as APS was the one who signed purchase orders for the SNC work. Sabre further maintains that APS, not Skyline, invoiced SNC for some portion of the work. Sabre does not believe that SNC coincidentally contacted Skyline, Waller's fiancé’s newly established company, but instead argues that this interaction was related to Waller. Sabre also takes issue with Turner's failure to disclose this personal email address during her deposition when she was asked to identify all email addresses that she used for APS business. At this juncture, the Court does not have enough evidence to determine whether Turner and/or Waller used Skyline for business related to APS. Sabre has not provided proof that Defendants intentionally dissipated assets. At this time, the Court denies Sabre's request for complete financial records relating to Waller, Turner, and entities in which Turner and/or Waller have an interest. At the same time, the Court finds that the email exchanged between SNC and Turner's personal email address is sufficient to justify further inquiry into Turner's use of her email for any business related to APS and whether Waller disguised APS business through Skyline. However, Turner and Skyline are not parties to this case. Accordingly, the Court grants Sabre's request to conduct a forensic investigation into Turner's personal email address, only to the extent that this email address is within Waller or APS's possession, custody, or control. See Hagemeyer North America, Inc. v. Gateway Data Sciences Corp., 222 F.R.D. 594, 598 (E.D. Wis. 2004) (“Any party may request production of documents within the possession, custody, or control of another party, subject to the qualifications of Rule 26(b) of the Federal Rules of Civil Procedure.”). If this email address is within Waller or APS's possession, custody, or control, the parties should submit an agreed protocol for the search of the email account by January 5, 2022. The protocol should include a list of agreed search terms, parameters for an independent third-party to conduct the search, and protections for Turner's privacy. The agreed search terms should include, but are not limited to, any overlapping customers Sabre identified when the Court compelled APS to disclose its customer list to Sabre's counsel. See Order #32, p. 4-5. If the email address is not within a party's possession, custody, or control, the Court will consider a request for leave to issue a subpoena to conduct the search.[4] *4 Similarly, the Court partially grants Sabre's request to require Waller, Turner, APS, and Skyline to produce all invoices, purchase orders, and related communications from Skyline from September 1, 2019 through the present. First, Skyline, like Turner, is not a party to this case. Therefore, without a subpoena, the Court can only order Waller and APS to produce documents within their possession, custody, or control. Second, Sabre has not justified the relevance of all Skyline invoices, purchase orders, and related communications. The Court limits this request to only those documents relevant to the list of known overlapping customers between Sabre and APS. To the extent that these documents are within Waller or APS's possession, custody, or control, the Court compels the production of all invoices, purchase orders, and related communications exchanged between Skyline and any of the known overlapping customers. As detailed above, Sabre's Emergency Motion to Suspend the Transfer of Assets and Order Complete Disclosure and Document Production Surrounding All Assets Related to Defendant Travis Waller, Meredith Turner, and All Corporate Entities in Which Waller and/or Turner Have an Ownership Interest (#56) is granted in part and denied in part. II. Expedited Motion to Order Defendants to Comply with Prior Court Orders and Supplement Discovery for Trial (#57) Sabre's second Motion asks the Court to compel Defendants to produce four categories of information: 1. Updated invoices for overlapping customers; 2. Updated documents related to Defendants’ wealth; 3. Updated documents reflecting communications between Defendants and overlapping customers including CST and PI; and 4. Updated documentation regarding the recent change in APS ownership. For the first category of information: invoices for overlapping customers, Defendants’ Response represents that the parties’ have reached an agreement and that there is no longer a dispute. Sabre's motion to compel invoices for overlapping customers is denied as moot. As to Plaintiff's request for updated documents related to Defendants’ wealth, Defendant agrees to provide Sabre's counsel “with information sufficient to intelligently assess the net worth of both Waller and APS for purposes of its punitive damages claim” prior to the upcoming pretrial hearing. After Defendants filed their Response, the Court continued the Final Pretrial Hearing to June 10, 2022. The Court directs Defendants to supply Sabre with this information by May 20, 2022. Sabre's motion to compel updated documents related to Defendants’ wealth is granted. Third, the parties were unable to resolve their dispute regarding Sabre's request for updated documents reflecting communications between Defendants and overlapping costumers including CST and PI. Sabre alleges that Waller is continuing to violate his Employment Agreement and solicit overlapping customers. Sabre asks the Court to compel Defendants to produce communications Waller has had with overlapping customers to reveal any solicitation. Defendants argue that Sabre's request goes beyond the scope of the Court's prior order that required APS to produce any invoices involving Sabre customers. The Court's prior order stated: Second, Sabre seeks disclosure of the customer invoices. The invoices are relevant to Sabre's claim for damages because the invoice totals will allow Sabre to calculate its lost business. However, only the invoices of former Sabre customers are relevant. Therefore, after Sabre's attorneys create a list of overlapping customers, Sabre may request all customer invoices from the identified Sabre customers. Defendants must produce these select invoices within 14 days of receiving the document request. (Order, #32, p. 5.) Sabre's request for documents beyond invoices goes beyond the scope of the Court's prior order. Defendants represent that they have produced all invoices involving overlapping customers. The Court reminds Defendants that they are under a continuing obligation to provide all invoices relating to overlapping clients until the date of the trial. Sabre's motion for updated documents reflecting communications between Defendants and overlapping costumers is denied at this time. *5 Fourth, Defendants again represent that the parties have resolved their dispute as to Sabre's request for documentation regarding the recent change in APS ownership. Sabre's motion to compel documentation regarding APS's change in ownership is denied as moot. III. Conclusion For the reasons provided, Sabre's Emergency Motion to Suspend the Transfer of Assets and Order Complete Disclosure and Document Production Surrounding All Assets Related to Defendant Travis Waller, Meredith Turner, and All Corporate Entities in Which Waller and/or Turner Have an Ownership Interest (#56) is granted in part and denied in part. Sabre's Expedited Motion to Order Defendants to Comply with Prior Court Orders and Supplement Discovery for Trial (#57) is granted in part and denied in part. It is ordered: 1. The Court grants Sabre's request to conduct a forensic investigation into Turner's personal email address, to the extent that this email address is within Waller or APS's possession, custody, or control; 2. The Court compels the production of all invoices, purchase orders, and related communications exchanged between Skyline and any of the known overlapping customers, to the extent that the documents are within Waller or APS's possession, custody, or control; 3. If either Turner's personal email address or Skyline's business records are not within Waller or APS's possession, custody, or control, the Court will entertain a motion for leave to issue a third-party subpoena for documents; and 4. Defendants shall supplement their production of documents related to Waller and APS's wealth by May 20, 2022. Footnotes [1] Defendants suggest that Sabre is seeking a pre-judgment attachment under Illinois law. Illinois law allows a plaintiff to seize and hold the defendant's property prior to a judgment in very limited circumstances. See 735 ILCS 5/4-102. Sabre does not cite to this statute and does not seek to seize and hold Defendants’ assets. Instead, Sabre asks the Court to suspend the transfer of Defendants’ assets. For this reason, the Court finds that Sabre is not seeking a pre-judgment attachment under Illinois law. Even if the Court were to construe Sabre's Motion as seeking pre-judgment attachment, Sabre has not shown the presence of any of the ten grounds for seeking such attachment. See 735 ILCS 5/4-102. [2] Turner formed Skyline Infrastructure, LLC on September 19, 2019, during this litigation. [3] Turner is also a former Sabre employee. [4] Given Turner's close relationship to Defendants and apparent involvement in this case, the Court reminds Turner that she and Skyline likely have a duty to preserve documents that may be at issue in this litigation. See Crabtree v. National Steel Corp., 261 F.3d 715, 721 (7th Cir. 2002) (quoting Coates v. Johnson & Johnson, 756 F.2d 524, 551 (7th Cir. 1985)) (“The prevailing rule [in this circuit] is that bad faith destruction of a document relevant to proof of an issue at trial gives rise to a strong inference that production of the document would have been unfavorable to the party responsible for its destruction.”).