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U.S. Bancorp Equipment Finance, Inc. v. Babylon Transit

August 4, 2010

U.S. BANCORP EQUIPMENT FINANCE, INC., PLAINTIFF,
v.
BABYLON TRANSIT, INC., JAMES K. SMITH, JONI SMITH, AND JOHN BOSCH, INC., DEFENDANTS.



The opinion of the court was delivered by: E. Thomas Boyle United States Magistrate Judge

MEMORANDUM OPINION AND ORDER

Before the court is the plaintiff's motion to compel certain post-judgment discovery from defendant Joni Smith and non-party John Bosch Bus, Inc. The Court has not received any opposition to the within motion. For the following reasons, plaintiff's motion to compel is granted in part and denied in part.

FACTS

On or around September 7, 1995, Babylon Transit, Inc. ("Babylon Transit") entered into a master equipment lease ("Lease No. 1") with Cargill Leasing Corporation ("Cargill"). (Settlement Agreement 1.) James K. Smith and Joni Smith ("Guaranty No. 1"), and John Bosch, Inc. ("Guaranty No. 2") each executed and delivered a guaranty to Cargill, whereby they each unconditionally and absolutely guaranteed to Cargill all of Babylon Transit's payment and performance obligations under Lease No. 1. (Settlement Agreement 1-2.) On or around June 29, 1998, Babylon Transit supplemented Lease No. 1, such that Cargill agreed to lease five motorcoaches to Babylon Transit for eighty-four months, in exchange for monthly payments. (Settlement Agreement 1.)

On or around September 3, 1999, Babylon Transit entered into a master equipment lease ("Lease No. 2") with Firstar Equipment Finance Corporation ("Firstar"), whereby Firstar would lease one motorcoach to Babylon Transit for eighty-four months and Babylon Transit would make monthly payments to Firstar. (Settlement Agreement 2.) James K. Smith and Joni Smith ("Guaranty No. 3"), and John Bosch, Inc. ("Guaranty No. 4") each executed and delivered a guaranty to Firstar, whereby they each unconditionally and absolutely guaranteed to Firstar all of Babylon Transit's payment and performance obligations under the master lease. (Settlement Agreement 2.)

U.S. Bancorp is the successor-in-interest to both Cargill and Firstar. (Settlement Agreement 2.) Thus, U.S. Bancorp succeeded to Cargill's interest in Lease No. 1, its supplements, Guaranty No. 1, and Guaranty No. 2; U.S. Bancorp also succeeded to Firstar's interest in Lease No. 2, Guaranty No. 3, and Guaranty No. 4.

Babylon Transit defaulted under Lease No. 1 on or around June 1, 2002 and had previously defaulted under Lease No. 2 on or around May 1, 2002. (Settlement Agreement 2.) U.S. Bancorp thereafter brought suit against Babylon Transit, James K. Smith, Joni Smith, and John Bosch, Inc. (Settlement Agreement 2-3.) On June 29, 2006, the parties settled the action and the defendants agreed to make a lump sum payment of $100,000, monthly payments of $2,500, and a balloon payment of $275,000. (Settlement Agreement 4, 10.) As part of the settlement agreement, the parties executed a stipulation which, in the event of a subsequent default by the defendants, would entitle U.S. Bancorp to the entry of a judgment against each of the defendants jointly and severally in the amount of $1,073,309.58, plus interest at a rate of fifteen percent (15%) per annum from June 1, 2002 through July 11, 2006, as well as attorney's fees, expenses, costs, and post-judgment interest in accordance with 28 U.S.C. § 1961, less any payments made by Babylon pursuant to the settlement agreement. (Mem. and Order of Block, J., dated Feb. 2, 2010, 1.)

On December 3, 2009, U.S. Bancorp moved to reopen the case, alleging that the defendants had failed to make payments since November 1, 2009, thereby defaulting under the terms of the settlement agreement. (Id. at 2.) On December 4, 2009, Judge Block ordered the defendants to respond by December 15, 2009, but they failed to do so. (Id. at 2.) On January 4, 2010, Judge Block again ordered the defendants to respond - this time by January 15, 2009 - but again they failed to do so. (Id. at 2.) As a result, the court considered U.S. Bancorp's motion to be unopposed, and granted the motion and reopened the case to alter the judgment. (Id at 2.) Judgment was entered against the defendants jointly and severally on February 16, 2010 in the amount of $2,067,550.79, plus interest at a rate of $441.09 per day from December 2, 2009 through the date of entry of judgment. (Id. at 2-3; Judgment, 2.)

On March 22, 2010, pursuant to Federal Rule of Civil Procedure 69, U.S. Bancorp issued a subpoena to Joni Smith ("Smith"), requiring him to appear for a deposition and to produce certain documents on April 16, 2010 in Manhattan, New York. (Pl. Mot. to Compel, Ex. 1.) Smith was served with the subpoena on March 22, 2010. (Pl. Mot. to Compel, Ex. 2.) That same day, U.S. Bancorp also served upon Smith a set of interrogatories and a request for the production of documents. (Pl. Mot. to Compel, Exs. 3, 4.) Smith failed to appear for the deposition, to produce the requested documents, or to provide answers to the interrogatories. (Pl. Mot. to Compel 1-2.)

On April 22, 2010, U.S. Bancorp issued a subpoena to non-party John Bosch Bus, Inc. ("JBBI"), requiring JBBI to appear for a deposition and to produce certain documents on May 10, 2010 in Manhattan, New York. (Pl. Mot. to Compel, Ex. 5.) JBBI was served with the subpoena on April 30, 2010. (Pl. Mot. to Compel, Ex. 6.) JBBI failed to appear for the deposition or to produce the requested documents.

From March 23, 2010 through May 19, 2010, counsel for U.S. Bancorp attempted to contact the attorney representing Smith and JBBI, Darrell J. Conway, Esq. ("Conway"), to resolve the discovery disputes without resorting to judicial intervention. (Pl. Mot. to Compel 2-3.) On April 7, 2010, Conway advised U.S. Bancorp's counsel that he would likely be able to produce the documents responsive to the subpoena and document requests served on Smith by April 16, 2010. (Pl. Mot. to Compel 2.) He failed to do so. (Pl. Mot. to Compel 2.) On April 22, 2010, U.S. Bancorp sent a letter to Conway via facsimile demanding that Smith respond as required by April 26, 2010. (Pl. Mot. to Compel, Ex. 7.) Conway failed to respond and on April 27, 2010, U.S. Bancorp sent another letter requesting the proper response by April 30, 2010. (Pl. Mot. to Compel, Ex. 8.) Conway (and Smith) failed to respond to that request as well.

On May 11, 2010, counsel for U.S. Bancorp telephoned Conway and left a message asking to discuss the obligations of Smith and JBBI and to resolve the within discovery disputes. (Pl. Mot. to Compel 2.) On May 11, 2010, Conway responded via email, stating that he had received documents from Smith, but had yet to review them and would "provide a preliminary response . . . by Friday [May 14, 2010]." (Pl. Mot. to Compel, Ex. 9.) On May 12, 2010, counsel for U.S. Bancorp responded via e-mail, stating that a "mere promise of a 'preliminary response' at this juncture is simply unacceptable." (Pl. Mot. to Compel, Ex. 9.) Conway failed to respond to that email or to any of the outstanding discovery requests. (Pl. Mot. to Compel 3.)

On May 20, 2010, U.S. Bancorp filed the within motion to compel, requesting an order (a) compelling Smith to (1) produce the documents subject to the subpoena and document requests, (2) answer the interrogatories, and (3) appear for a deposition on a mutually agreeable date; and (b) compelling JBBI to (1) produce the documents subject to the subpoena, and (2) appear for a deposition on a mutually agreeable ...


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