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Alison Helms, As Executrix of the Estate of Thomas H. Grant v. the Vanguard Group

July 27, 2011

ALISON HELMS, AS EXECUTRIX OF THE ESTATE OF THOMAS H. GRANT, PLAINTIFF,
v.
THE VANGUARD GROUP, INC., DEFENDANT.



The opinion of the court was delivered by: H. Kenneth Schroeder, Jr. United States Magistrate Judge

DECISION AND ORDER

This case was referred to the undersigned by the Hon. Richard J. Arcara, pursuant to 28 U.S.C. § 636(b)(1), for all pretrial matters and to hear and report upon dispositive motions. Dkt. #4.

Currently before the Court is plaintiff's letter request to compel defendant to provide more complete responses to Request No. 3 and Request No. 5 of Plaintiff's First Set of Interrogatories and to respond to Plaintiff's First Set of Interrogatories and Plaintiff's Request to Admit, as well as plaintiff's request for an extension of time to notify the Court of any disputes relating to plaintiff's Second Set of Interrogatories.

This action was commenced by verified complaint filed September 9, 2009, alleging that The Vanguard Group, Inc. ("Vanguard"), improperly reversed transfers of $123,671.63 from a joint account in the names of Thomas H. Grant and his spouse, Dorothy Grant, to an individual account in the name of Thomas H. Grant. Dkt. #1. Plaintiff Alison B. Helms, niece of Thomas H. Grant and executrix of his estate, alleges that she executed the transfer of funds from the joint account into the individual account at Mr. Grant's request during April and May of 2007 pursuant to a valid and enforceable power of attorney. Dkt. #1. Mr. Grant died on May 30, 2007. Dkt. #1. The transferred funds were returned to the joint account on or about October 17, 2007, at which time his surviving spouse transferred the funds into an individual account in her name. Dkt. #1.

Plaintiff alleges that Vanguard: (1) breached its agreement with Mr. Grant by denying his authority to transfer shares online; (2) breached its fiduciary duty to Mr. Grant and his estate when it reversed the online transactions; (3) misappropriated funds from Mr. Grant and his estate when it reversed the online transactions; (4) wrongfully converted assets of the estate to Mr. Grant's spouse; and (5) breached its duty of reasonable care in its investigation of the online transfers. Dkt. #1. Vanguard alleges that Ms. Helms effectuated the transactions by impersonating Mr. Grant, without Mrs. Grant's knowledge, contrary to the established procedures which Vanguard had informed Ms. Helms were required to permit her to act on Mr. Grant's behalf. Dkt. #2. Vanguard asserts numerous affirmative defenses to the action, including fraud and illegality. Dkt. #2.

Plaintiff's First Request for Production of Documents

Request No. 3 of Plaintiff's First Request for Production of Documents seeks documents exchanged between Mrs. Grant and defendant. Request No. 5 of Plaintiff's First Request for Production of Documents seeks documents concerning the accounts. Vanguard produced documents relating to Mr. Grant's accounts, including the joint account up to October 17, 2007, when Vanguard cancelled the transfers and returned the assets to the surviving account owner, Mrs. Grant, but declines to disclose documents relating to Mrs. Grant's accounts subsequent to October 17, 2007 because of confidentiality owed to non-parties and lack of relevance to the issues in this action.

Plaintiff argues that documents exchanged between Mrs. Grant and Vanguard subsequent to October 17, 2007 will shed light on Vanguard's adherence to the policies it relied upon in determining to reverse the transfers by Ms. Helms into Mr. Grant's individual account, which would undermine Vanguard's justification for the reversal of those transactions. More specifically, plaintiff argues that evidence that Vanguard has not followed its policies and the situations in which it has deviated from its policies are relevant to determining the validity of Vanguard's defenses in this action.

The Court declines to direct Vanguard to disclose documents relating to Mrs. Grant's individual accounts. If it is determined that Ms. Helms' transfers to Mr. Grant's individual account were proper and/or that the reversal of those transfers was improper, Vanguard will be responsible for plaintiff's damages. Conversely, if it is determined that Ms. Helms' transfers to Mr. Grant's individual account were improper and/or that the reversal of those transfers was proper, plaintiff would have no interest in the subsequent disposal of those funds. Because any funds contained in or returned to the joint account subsequent to Mr. Grant's death belonged to Mrs. Grant, a non-party, by virtue of the rules regarding joint tenancy and rights of survivorship, Vanguard need not disclose such documents. Contrary to plaintiff's argument, the Court finds it irrelevant to the issues in this action whether Vanguard accepted a facsimile of Mrs. Grant's power of attorney to allow Mrs. Grant's daughter to conduct transactions regarding the account subsequent to the return of the disputed funds. Vanguard's alleged reliance upon a facsimile versus an original power of attorney with respect to Mrs. Grant is not remotely equivalent to the factual circumstances alleged in the instant case, to wit, that instead of obtaining an agent authorization form or submitting a power of attorney to Vanguard, plaintiff used Mr. Grant's personal information to register his Vanguard accounts for electronic access and then used this access to transfer funds out of the joint account and into Mr. Grant's individual account.

Plaintiff's First Set of Interrogatories

Vanguard objects to the First Set of Interrogatories, which were served August 6, 2010, as untimely, however, the Case Management Order clearly states that the deadline for completion of all discovery was November 12, 2010. Dkt. #18. Vanguard also objects that the interrogatories exceed the 25 interrogatory limit set by Rule 33(a)(1) of the Federal Rules of Civil Procedure, however, a review of the interrogatories by the Court supports plaintiff's argument that the subparts are directly related to the numbered interrogatory and comport with Rule 33(a)(1).

Interrogatory No. 1 seeks information regarding the disposition of funds returned to the account on October 17, 2007;Interrogatory No. 2 seeks information regarding every account opened at Vanguard by Mrs. Grant; and Interrogatory No. 3 seeks information regarding every sale, transfer, exchange or redemption of funds from every account opened at Vanguard by Mrs. Grant. For the reasons previously set forth by the Court, Vanguard is not required to respond to these interrogatories.

Interrogatory No. 4

Interrogatory No. 4 seeks the following ...


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