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Dangerfield v. Merrill Lynhc

February 15, 2006

PATRICIA DANGERFIELD, PLAINTIFF,
v.
MERRILL LYNCH, PIERCE, FENNER & SMITH, INC., DEFENDANT.



The opinion of the court was delivered by: Gabriel W. Gorenstein, United States Magistrate Judge

REPORT AND RECOMMENDATION

Plaintiff Patricia M. Dangerfield ("Dangerfield"), proceeding pro se, brought this lawsuit against Merrill Lynch, Pierce, Fenner & Smith, Inc. ("Merrill Lynch"), and her former husband, J William Dangerfield ("Mr. Dangerfield"), alleging violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), securities fraud, common law fraud, conversion, and aiding and abetting conversion. In September 2003, this Court dismissed all of Dangerfield's claims against Merrill Lynch except the claim of aiding and abetting conversion. In January 2004, Dangerfield stipulated to the dismissal of her claims against Mr. Dangerfield following his death. Merrill Lynch has now moved for summary judgment on the remaining claim against it. For the reasons below, Merrill Lynch's motion should be granted.

I. BACKGROUND

A. Dangerfield's Claim of Aiding and Abetting Conversion

While the allegations in Dangerfield's Amended Complaint are not admissible in this motion for summary judgment, we briefly summarize the relevant portions to provide some context for her claim. Dangerfield obtained a final decree of divorce from Mr. Dangerfield in the District Court of Harris County, Texas, on March 11, 1991, under which she was awarded property belonging to Mr. Dangerfield. See First Amended Complaint (corrected version), filed Nov. 20, 2002 (Docket #33) ("Am. Compl."), ¶ 13; Decree of Divorce, dated Mar. 11, 1991 (reproduced as Ex. 2 to Plaintiff's First Amended Complaint (first version), filed Nov. 15, 2002 (Docket #31)), at 20. Dangerfield attempted to obtain information regarding Mr. Dangerfield's accounts at Merrill Lynch by means of subpoenas issued by the Texas court in 1990, see Am. Compl. ¶¶ 10-11, and in 1998, see id. ¶¶ 20-22; Subpoena Duces Tecum, dated Apr. 9, 1998 (reproduced as Exs. 4 and 5 to Docket # 31). She claims that, despite these requests, Merrill Lynch withheld relevant information about Mr. Dangerfield's accounts and that this course of conduct continued through June 2000. See Am. Compl. ¶¶ 27-28, 34. Dangerfield alleges that Merrill Lynch knew that its failure to respond to the subpoenas properly would "facilitate the conversion" by Mr. Dangerfield of accounts at Merrill Lynch rightfully belonging to Dangerfield. Id. ¶ 58.

B. Relevant Procedural History

Dangerfield filed the original complaint in this case on April 3, 2002. See Complaint, filed Apr. 3, 2002 (Docket #1). The Amended Complaint, filed several months later, included claims of RICO violations, securities fraud, common law fraud, conversion, and aiding and abetting conversion. See Am. Compl. ¶¶ 30-49, 50-54, 55-58, 59-61. On April 11, 2003, this Court issued a Report and Recommendation recommending the dismissal of all claims except for the aiding and abetting conversion claim. See Report and Recommendation, dated Apr. 11, 2003 (Docket #50). That Report was adopted by the district judge, who granted Dangerfield leave to move to amend her complaint on certain grounds. See Order, dated Sept. 22, 2003 (Docket #103), at 19-23, 28-29. Dangerfield thereafter filed a "Second Amended Complaint," which the Court construed as a motion to amend her complaint. See Report and Recommendation, dated Feb. 2, 2004 (Docket #76); Order, dated Mar. 17, 2004 (Docket #80). That motion was denied. Id.

On April 8, 2004, the Court issued an order directing that discovery proceed on the issues of Merrill Lynch's statute of limitations defense and proceedings brought by Dangerfield against Mr. Dangerfield in Norway. See Order, dated Apr. 8, 2004 (Docket #82). This Order was issued in light of the Merrill Lynch's contention that it had a complete defense to Dangerfield's claims based on the applicable statute of limitations and the res judicata effect of a judgment unfavorable to Dangerfield in Norway. The original deadline for completion of discovery was June 11, 2004. Id.

Following certain discovery disputes, the Court extended the deadline for the completion of discovery to August 6, 2005. See Order, dated July 28, 2004 (Docket #86). Ultimately, the Court granted the parties leave to make cross-motions to compel with respect to their outstanding discovery disputes. See Order, dated Oct. 5, 2004 (Docket #90).

On October 22, 2004, Dangerfield filed a motion to compel. See Motion for Order Compelling Production of Documents Requested in Plaintiff's First Discovery Request to Defendants, dated Oct. 21, 2004 (Docket #93) ("Pl. Motion to Compel"). On the same day, Merrill Lynch filed its own motion to compel. See Notice of Motion, dated Oct. 22, 2004 (Docket #91); Merrill Lynch's Motion to Compel Production of Documents, dated Oct. 22, 2004 (Docket #92). The gravamen of Dangerfield's motion was similar to the basis for the underlying claim itself: that Merrill Lynch was not fully disclosing information on accounts in the name of Mr. Dangerfield or related accounts. See Pl. Motion to Compel at 1-3.

At oral argument on the motions, the Court reversed its April 8, 2004 Order, and directed that discovery should proceed not merely as to the statute of limitations and res judicata defenses but as to the entire aiding and abetting conversion claim. See Transcript of Conference held on January 20, 2005, filed Feb. 16, 2005 (Docket #106) ("Tr."), at 6-7, 50-51. This expansion of discovery was also reflected in a written order issued on the same date of the conference. See Order, dated Jan. 20, 2005, at 1 (Docket #104) ("January 20 Order"). The Court ordered Merrill Lynch to respond to the vast majority of plaintiff's discovery requests. See Tr. 26-48. The Court also required Merrill Lynch to provide Dangerfield with any documents it possessed relating to account numbers listed in the motion to compel, or to state that it did not possess such documents. See Tr. 20-21; 39:12-13. The Court ordered Merrill Lynch to produce any documents in its possession for a 12-year period: starting from January 1, 1991, until the date of Mr. Dangerfield's death, May 27, 2003. See Tr. 37:2-7; January 20 Order ¶ 1. The Court set a deadline of March 21, 2005, for the completion of all discovery. January 20 Order ¶ 2.

In February 2005, Merrill Lynch sought a 30-day extension for the discovery deadlines. This request was granted. See Order, dated Feb. 22, 2005 (Docket #107) ("February 22 Order"). Merrill Lynch sent a letter to the Court describing its responses to Dangerfield's requests, and indicating the efforts it had made to locate the documents requested. See Letter from James M. Bergen to Magistrate Judge Gabriel W. Gorenstein, dated Mar. 24, 2005 ("Bergen Letter") (Docket # 130); see also Declaration of Daniel R. Spector, dated July 25, 2005 (attached to Notice of Motion for Summary Judgment, dated July 25, 2005 (Docket #114)) ("Spector Decl."), ¶ 24 (showing list of each account number referenced in the Amended Complaint and how Merrill Lynch responded). In April 2005, Dangerfield sought a 60-day extension of the discovery period. This request was granted, see Memorandum Endorsement, dated Apr. 13, 2005 (Docket #109), making the deadline for all discovery June 21, 2005, and the deadline for summary judgment motions July 25, 2005. See January 20 Order; February 22 Order. Dangerfield then sought an order requiring that "an independent forensic computer expert" be given access to Merrill Lynch's electronic records, and that she be provided with Mr. Dangerfield's "portfolio" and "microfiche" copies of documents. See Motion for Additional Order to Compel Discovery of Electronic Documents, dated Apr. 18, 2005 (Docket #111), ¶¶ 1-3. This request was denied because no factual or legal basis was provided for the issuance of such an order. See Memorandum Endorsement, dated Apr. 19, 2005 (Docket #110).*fn1 A few days before discovery was to end, Dangerfield requested yet another 60 days for the completion of discovery. That request was denied because, as described in the Court's Order, Dangerfield had already been allotted ample time to conduct her discovery, and the Court had extended the discovery deadline several times, including the recent 60-day extension at Dangerfield's request. See Order, dated June 28, 2005 (Docket #113).

C. The Motions filed by the Parties

1. Merrill Lynch's Motion for Summary Judgment

On July 25, 2005, Merrill Lynch moved for summary judgment against Dangerfield. See Notice of Motion, filed July 25, 2005 (Docket #114); Memorandum of Law in Support of Motion for Summary Judgment, dated July 25, 2005 (Docket #116) ("Sum. Judg. Memo"); Statement of Material Facts Pursuant to Local Rule 56.1, dated July 25, 2005 (Docket #119) ("56.1 Statement"). Included in its motion was the statement required by Local Civil Rule 56.2 informing Dangerfield of the materials she would have to submit in order to oppose the summary judgment motion. See Notice to Pro Se Litigant Opposing Motion for Summary Judgment, dated July 25, 2005 (Docket #117).

Dangerfield filed a response to this motion. See "Notice of Motion," dated Aug. 24, 2005 (Docket #122) (annexing Plaintiff's Answer to Defendants #1-52 Statement of Material Facts Pursuant to Local Rules 56.1) ("56.1 Reply"); Amended Memorandum of Law, Response to Summary Judgment by Defendants, dated Aug. 25, 2005 (Docket #125) ("Sum. Judg. ...


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