MUELLER BRASS CO., Plaintiff, v. David CROMPTON, Defendant No. 2:20-cv-02496-SHL-atc United States District Court, W.D. Tennessee, Western Division Signed May 19, 2022 Christoff, Annie T., United States Magistrate Judge ORDER GRANTING MOTIONS TO COMPEL *1 Before the Court are three motions to compel. Plaintiff Mueller Brass Co. (“MBC”) filed its first on September 3, 2021 (ECF No. 68), and its second on December 13, 2021 (ECF No. 98). Defendant David Crompton filed his motion on December 7, 2021. (ECF No. 96.) Crompton responded to MBC's motions (ECF Nos. 73, 101), and MBC to Crompton's (ECF No. 100). District Court Judge Sheryl H. Lipman initially referred MBC's first motion to Magistrate Judge Charmiane G. Claxton. (ECF No. 69.) On October 6, 2021, the motion was reassigned to the undersigned after Magistrate Judge Claxton was recused from the case. (ECF Nos. 76, 77.) On February 10, 2022, Judge Lipman entered an order (the “Order”) that resolved three dispositive motions in this matter. (ECF No. 104.) After a March 17, 2022 status conference, Judge Lipman directed the parties to provide an update as to the status of the outstanding motions. (ECF No. 115.) In the parties’ subsequent filing, they explained that the motions addressed herein (ECF Nos. 68, 96, 98) remained unresolved. (ECF No. 117.) Judge Lipman then entered an order referring ECF Nos. 96 and 98 to the undersigned and ordered the parties to file supplemental briefs as to the three unresolved motions. (ECF Nos. 118, 120.)[1] The parties filed those briefs and responses thereto (ECF Nos. 122, 123, 124, 125), and the Court heard argument on them on May 10, 2022 (ECF No. 127). Because the Court finds that the documents and materials subject to the requests in each of the outstanding motions are relevant, and for the additional reasons stated herein, the motions are granted. BACKGROUND Crompton was the president, CEO, and majority shareholder of Quick Fitting, which designed and supplied metal fittings, including to MBC. (ECF No. 104, at 4.) The case involves three loans taken out by Quick Fitting, a personal guaranty Crompton made as to one of the loans, the purchase of all the loans by MBC, and Quick Fitting's eventual default on the loans. A detailed background on the history of the loans and Quick Fitting's path through a receivership proceeding in the Rhode Island Superior Court can be found in the Order. (See id. at 3–10.) Though Judge Lipman's Order dispatched almost all of the issues before her, she explained: [T]he alleged damages caused by both parties prevents complete resolution of the Motions and keeps counts of Crompton's Amended Counterclaims, as well as MBC's original Complaint, alive. The issues that remain are: (1) the amount of remaining damages due to MBC, if any, as a result of Crompton's alleged breach of guaranty, and (2) the amount of remaining damages due to Crompton under counts I and II, if any, both as an offset of any damages that Crompton owes under the Guaranty, and any independent damages that MBC owes Crompton for bringing this lawsuit. These questions are factual, not legal. *2 (Id. at 48–49.) It follows then, that the disposition of the motions to compel depends upon whether the underlying discovery requests seek information that impacts any of those remaining issues. Because Judge Lipman's Order makes clear that each party remains potentially liable to the other for attorneys’ fees, and the motions to compel seek information that weigh directly on that issue, both motions are granted, as explained in more detail below. LEGAL STANDARD The Federal Rules of Civil Procedure provide that “[p]arties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case.” Fed. R. Civ. P. 26(b)(1). In gauging whether discovery is proportional to the needs of a case, courts consider the following: “the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.” Kitchen v. Heyns, No. 18-2230, 2019 WL 5491569, at *1 (6th Cir. Apr. 30, 2019) (quoting Fed. R. Civ. P. 26(b)(1)). In the Sixth Circuit, “the scope of discovery is extremely broad under the Federal Rules of Civil Procedure and is ... within the broad discretion of the trial court.” Clark Const. Grp., Inc. v. City of Memphis, 229 F.R.D. 131, 137 (W.D. Tenn. 2005) (citations and quotations omitted); see also United States v. Tennessee, No. 92-cv-2062-JPM-tmp, 2012 WL 13089423, at *2 (W.D. Tenn. Apr. 18, 2012) (“Relevance is defined broadly.”). “[T]he party resisting discovery bears the burden of establishing the request is of such marginal relevance that the potential harm occasioned by discovery would outweigh the ordinary presumption in favor of broad disclosure.” Anderson v. Dillard's, Inc., 251 F.R.D. 307, 311 (W.D. Tenn. 2008) (citation and alterations omitted). At the same time, “the court cannot compel a party to produce what does not exist.” Dancy v. Lanxess Corp., No. 19-cv-02690-SHL-tmp, 2020 WL 5262311, at *2 (W.D. Tenn. Sept. 3, 2020) (citations and alterations omitted). Federal Rule of Civil Procedure 37(a)(3)(B) provides that “[a] party seeking discovery may move for an order compelling an answer, designation, production, or inspection ... if ... (iv) a party fails to produce documents or fails to respond that inspection will be permitted—or fails to permit inspection—as requested under Rule 34.” Evasive or incomplete answers or responses are the equivalent of a failure to answer or respond. Fed. R. Civ. P. 37(a)(4). Upon granting or denying a motion to compel, the Court must require the unsuccessful party to pay the reasonable expenses incurred in making the motion, including attorneys’ fees, unless, for example, the unsuccessful party's actions were substantially justified. Fed. R. Civ. P. 37(a)(5)(A), (B). ANALYSIS I. MBC'S Motions to Compel Upon the referral of MBC's first motion to compel, this Court ordered the parties to confer to attempt to resolve the underlying issues and to report to the Court the outcome of those discussions. (ECF No. 78.) On October 21, 2021, the parties informed the Court that they had arrived at an agreement by which Crompton would produce the documents sought in the motion, albeit from a narrower time frame than originally requested, contingent upon the entry of a protective order. (ECF No. 82.) Consistent with that agreement, Crompton eventually provided bank statements from January 1, 2019, to November 2021, as well as tax documents from 2019 and 2020. (ECF No. 123, at 5.) Crompton's initial production did not include bank statements from 2021, which prompted MBC to file its second motion to compel, i.e. ECF No. 98. (Id. at 5 n.1.) MBC acknowledges that Crompton ultimately produced the bank statements from up until December 2021. (Id.) *3 So, at least at that point, Crompton had remedied the discovery deficiencies identified in MBC's motions to compel. The litigation did not end there, of course, and, according to MBC, neither did Crompton's obligations to provide updated financial documents that prompted the motions to compel in the first place. MBC maintains that resolving the issues left open by the Order requires the supplementation it now seeks. To that end, MBC asserts that its “only request now is that Crompton supplement his prior production and provide any responsive financial documents for the period December 2021 through the present – April 21, 2022. This additional production embodies nothing more than supplementing his prior discovery responses, as required by the Rules in any event.”[2] (ECF No. 123, at 5.) MBC asserts that Crompton's obligations under the Personal Guaranty—which include that he maintain his financial position[3]—continue even though the Order resolved the repayment of the principal balance owed on the loans. Crompton responds that the Personal Guaranty ceased to be effective as of May 2021 when his obligation was fully satisfied. (ECF No. 124, at 2.) He asserts that “MBC's discovery demands here for Crompton's personal financial information after that date are an attempt to enforce a right MBC no longer possesses and to seek information from 2022 that has no relevance to MBC's claimed legal costs incurred prior to the satisfaction of the Antipodes Loan and Guaranty in May 2021.” (Id. at 2.) He claims that “[a]ll that remains of MBC's breach-of-guaranty claim is a narrow question of potential recoupment of legal fees incurred in this action to enforce the Guaranty, if any.” (Id. at 5.) Crompton's argument overly narrows the issues still before the Court and the information that may be necessary to resolve those issues. The Order clearly contemplates that Crompton may be liable to MBC for attorneys’ fees as a part of this litigation. In denying in part Crompton's motion for judgment on the pleadings, the Court rejected his argument that MBC's complaint was moot based on MBC having previously been made whole and therefore having suffered no injury. The Court did so because it found “the remaining amount of damages and injury caused by Crompton to MBC under the alleged breach of guaranty uncertain.” (ECF No. 104, at 21.) Specifically, “MBC appears to seek other damages caused by Crompton's alleged breach, including MBC's assertion of reasonable attorneys’ fees and expenses incurred in this action.” (Id. at 23.) To the extent Crompton might be liable for MBC's attorneys’ fees, that liability is pursuant to the Personal Guaranty, which contains the following provision, in bold: GUARANTOR ... AGREES THAT IN THE EVENT THIS GUARANTY SHALL BE ENFORCED BY SUIT OR OTHERWISE, OR IF THE HOLDER OF THE NOTES SHALL EXERCISE OR ENDEAVOR TO EXERCISE ANY OF ITS REMEDIES UNDER THE NOTES, THE LOAN AGREEMENT, THE SECURITY DOCUMENTS OR ANY INSTRUMENT OR AGREEMENT SECURING THE NOTES OR THIS GUARANTY, GUARANTOR WILL REIMBURSE THE HOLDER OF THE NOTES, UPON DEMAND, FOR ALL EXPENSES INCURRED IN CONNECTION THEREWITH, INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS’ FEES. (ECF No. 1-2 ¶ 20.) Because the Court determined that Crompton's liability for attorneys’ fees remains an open question, the other provisions of the Personal Guaranty, including paragraph 10's requirement that he remain solvent, remain in effect. MBC's requests at issue speak directly to the question of whether Crompton remains solvent, and whether he remains solvent is relevant to MBC's claimed entitlement to its legal costs. Therefore, MBC's motions are granted. Crompton shall produce, within fourteen days of the entry of this order, the documents MBC seeks in its motions, i.e., the same categories of responsive financial documents he previously produced, but updated for December 2021 through April 21, 2022.[4] To the extent Crompton withholds any documents based on any claim of privilege, he shall provide a privilege log. II. Crompton's Motion to Compel *4 Crompton's motion to compel, as reiterated in his supplemental brief, pertains to his Requests for Production No. 19, 23, 24, and 28. At the center of these requests is Crompton's contention that MBC “knowingly filed a baseless complaint and pursued a meritless case against him” because, he asserts, there was never any question that MBC would be made whole, which rendered any litigation unwarranted and simply an attempt to coerce Crompton into paying MBC what it was not owed. (ECF No. 122, at 3.) Crompton further asserts that these discovery requests “are unquestionably relevant to the remaining issues because they are properly tailored at MBC's awareness of the fully secured status of the Antipodes Loan at the time it filed this suit and at multiple points throughout the Receivership.” (Id.) The four Requests for Production at issue are: • Request No. 19: Please produce all documents and communications related to the Personal Guaranty at issue in this Action. • Request No. 23: All documents and communications related to the Intercreditor & Subordination Agreement described in paragraphs 49–52 of Crompton's Counterclaims. • Request No. 24: Please produce all documents and communications related to the [sic] MBC's efforts to participate in the Quick Fitting sale process in the Receivership, including MBC's request to credit bid its claims in connection with the sale of Quick Fitting's assets. • Request No. 28: Please produce all non-privileged documents and communications related to the Receivership Settlement. (ECF No. 125, at 3, 8, 9, 10.) As the Court noted above, the documents Crompton seeks in each of these requests is relevant to the claims that remain at issue in this litigation. Each category of documents relates in some way to MBC's valuation of Quick Fitting, as well as its understanding as to whether it would be secured absent successful prosecution of its claims against Crompton in this litigation. Documents and communications that speak to that valuation and MBC's understanding are relevant because they have the potential to address MBC's alleged breach of the Antipodes Loan, as well as “MBC's efforts to enforce Crompton's Guaranty,” which, the Court explained in denying MBC's Motion to Dismiss Crompton's claim for breach of the Guaranty, “constitutes a valid, independent cause of action for breach of the Guaranty” (ECF No. 104, at 46–48), which may include “damages, including legal expenses incurred in defending MBC's meritless claim” (id. at 48). In its briefing and at the hearing, MBC asserted that, at least as to requests No. 19 and 23, it has produced all of the responsive documents that are in its custody or control. (See ECF No. 125, at 4, 9.) To the extent MBC identifies any additional documents responsive to those requests, it shall produce them. To the extent that it has documents responsive to requests No. 24 and 28, those shall also be produced. Responsive documents shall be produced within fourteen days of the entry of this order. To the extent MBC withholds any documents based on any claim of privilege, it shall provide a privilege log. III. Request for Attorneys’ Fees Both parties seek to be reimbursed for their attorneys’ fees and costs in their motions. (See ECF No. 68, at 2; ECF No. 96, at 2; ECF No. 98, at 3.) The Court finds that the non-disclosures, responses, and objections to the underlying requests were substantially justified under the circumstances, and, given the legitimate nature of the disputes, an award of attorneys’ fees to either party would be inappropriate under Rule 37(a)(5)(A)(ii). CONCLUSION For the foregoing reasons, MBC's motions to compel, ECF Nos. 68 and 98, and Crompton's motion to compel, ECF No. 96, are granted. As described herein, within fourteen days of the entry of this order, the parties shall produce any documents and materials responsive to the discovery requests as well as privilege logs describing any documents being withheld. *5 IT IS SO ORDERED this 19th day of May, 2022. Footnotes [1] Judge Lipman's Order explained that the parties resolved the portion of MBC's second motion, ECF No. 98, that dealt with Crompton's privilege log. (ECF No. 118, at 1.) MBC confirmed at the hearing that what remains from MBC's second motion seeks the same relief as its first. [2] Though MBC fleetingly asserts in its supplemental briefing that Crompton waived any objection to producing the updated documents it now seeks based on his previous production of similar documents from an earlier time period (ECF No. 123, at 4–6), MBC withdrew that argument at the hearing. [3] The Personal Guaranty provides: Guarantor hereby covenants and agrees not to dispose of all or any substantial part of Guarantor's assets for less than fair market value nor intentionally cause any substantial diminution of Guarantor's net worth as the same exists on the date hereof, and that any of the foregoing shall, at the option of the holder of the Notes, its successors and assigns, be void and of no effect. (ECF No. 1-2 ¶ 10.) [4] MBC requested that Crompton's supplementation run through April 21, 2022, the day the parties filed their supplemental briefs. (ECF No. 123, at 5.) Federal Rule of Civil Procedure 26(e)’s obligations regarding supplementation continue to apply.