Opinion
C.A. No. 05C-08-042 WLW.
Submitted: May 19, 2006.
Decided: July 14, 2006.
Upon Plaintiffs' Motions to Quash Subpoenas. Denied.
Upon Defendant's Motion to Quash Discovery or, in the Alternative, Motion in Limine. Deferred.
Robert A. Penza, Esquire and Peter M. Sweeney, Esquire of Gordon Fournaris Mammarella, P.A., Wilmington, Delaware; attorneys for the Plaintiffs.
R. Brandon Jones, Esquire of Hudson Jones Jaywork Fisher, Dover, Delaware; attorneys for the Defendant.
ORDER
Pending before this Court are several discovery issues between the parties to this action. In the order of submission they are: (1) Plaintiffs', Carolyn Masten Humes ("Carolyn"), Daniel R. Masten ("Daniel") and Arthur Robert Masten ("Robert"), and Fourth Party Defendant Carolyn's Motion to Quash Subpoena Duces Tecum; (2) Plaintiff and Fourth Party Defendant Robert's Motion to Quash Three Subpoenas Duces Tecum; and (3) Defendant and Third Party Plaintiff Charles H. West Farms, Inc.'s ("West Farms") Motion to Quash Discovery/In the Alternative Motion in Limine.
After hearing a very spirited, yet informative, argument from all counsel in regard to these motions, the Court finds as follows:
1. With regard to Plaintiffs' and Fourth Party Defendant's Motion to Quash Subpoena Duces Tecum, Carolyn, Daniel and Robert (collectively "Plaintiffs") assert that Third Party Defendants and Fourth Party Plaintiffs, William Chasanov, Roy Shiels, and Brown Shiels and O'Brien (collectively "Third Party Defendants), are not entitled to receive information relating to the tax planning and valuation services for the Estate of Raymond Masten, RRDC Partnership, Masten Holding and Sun Ray Development sought from Siegfried Group. They argue that Third Party Defendants did not establish the relevance of such information, that it will not lead to the discovery of admissible evidence, and that the tax planning and evaluation services performed on the Estate of Raymond Masten have no relation to the sale of the Masten Farm.
Whether or not the information as to tax planning and evaluation services is relevant to the matters in issue may be addressed at a later date since this Court will allow a confidentiality order to be agreed to by the parties.
Conversely, Third Party Defendants contend that the proceeds from the sale of the Masten Farm were deposited into a trust account that became part of Raymond Masten's estate, which subsequently was inherited by Plaintiffs. Third Party Defendants also suggest that the Siegfried Group's documents can be protected by a confidentiality order.
West Farms also filed a Response in Opposition to Plaintiffs' Motion to Quash Subpoena Duces Tecum to Morgan Stanley and Wilmington Trust Company and a Response in Opposition to Plaintiffs' Motion to Quash Subpoena Duces Tecum to the Siegfried Group. However, both of these responses identically mirror Third Party Defendants' responses. Thus, only Third Party Defendants' responses will be addressed because it was Third Party Defendants who filed the subpoenas being challenged.
Discussion
Superior Court Civil Rule 45 says, in relevant part, "(3)(A) On a timely motion, the Court shall quash or modify the subpoena if it (i) fails to allow reasonable time for compliance, (ii) requires disclosure of privileged or other protected matter and no exception or waiver applies, or (iii) subjects a person to undue burden." Additionally, Superior Court Civil Rule 26(b)(1) states, in pertinent part, "[p]arties may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action. . . . It is not ground for objection that the information sought will be inadmissible at trial if the information sought appears reasonably calculated to lead to the discovery of admissible evidence." "The party seeking discovery must therefore clear the `initial hurdle . . . [of] demonstrat[ing] the relevance of the information sought to the issues involved in the case.'"
Snierson v. Chemical Bank, 108 F.R.D. 159 (D.C.Del 1985).
Plaintiffs allege that the information pertaining to Raymond Masten's companies have nothing to do with the sale of the Masten Farm and claim that the proceeds from the sale of the farm were not an asset of Raymond Masten's estate. However, the information sought is relevant to Third Party Defendant's defense of the matter because they contend that the trust account was part of Raymond Masten's estate and, therefore, was distributed to Plaintiffs. Consequently, the Third Party Defendants cleared the initial hurdle. Also, there is no direct assertion by Plaintiffs that the information is privileged, so the privilege issue is not decided by this decision. Thus, pursuant to Rule 26, the information sought does not even need to be admissible, it simply needs to appear as though it could reasonably lead to the discovery of admissible evidence. This threshold appears to be met.
Based on the foregoing, Plaintiffs' Motion to Quash Subpoena Duces Tecum is denied. However, application for a specifically limited confidentiality order may be sought and approved by the Court prior to compliance with the subpoena.
2. With regard to Plaintiff and Fourth Party Defendant Robert's Motion to Quash Three Subpoenas Duces Tecum, which were served on Morgan Stanley Credit Corporation and Wilmington Trust Company seeking financial statements filed by A. Robert Masten in connection with several mortgages he obtained, Robert argues that the subpoenas should be quashed because they seek irrelevant information. Specifically, Robert asserts that he has an ownership right in his personal financial information because it is not generally known to the public. Robert also suggests that if Third Party Defendants want to trace what happened to the sale proceeds, they can examine the documents they subpoenaed from Mellon Bank.
It is difficult at this point to determine how this injunction will be of consequence to this matter, whether it is material, and if it meets the definition of relevant evidence under D.R.E. 401.
Third Party Defendants contend that the subpoenas seek relevant and admissible evidence; namely, whether Plaintiffs' claim as a remainderperson interest is corroborated or impeached by whether or not Robert and/or Daniel R. disclosed their now asserted remainderman interest or their now asserted 7.5/36th possessing interest in the Masten Farm upon Mildred's death on June 6, 1988. Third Party Defendants also suggest that this Court can protect the financial statements by a confidentiality order if necessary.
Discussion
Superior Court Civil Rule 45 says, in relevant part, "(3)(A) On a timely motion, the Court shall quash or modify the subpoena if it (i) fails to allow reasonable time for compliance, (ii) requires disclosure of privileged or other protected matter and no exception or waiver applies, or (iii) subjects a person to undue burden." Additionally, Superior Court Civil Rule 26(b)(1) states, in pertinent part, "[p]arties may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action. . . . It is not ground for objection that the information sought will be inadmissible at trial if the information sought appears reasonably calculated to lead to the discovery of admissible evidence." "The party seeking discovery must therefore clear the `initial hurdle . . . [of] demonstrat[ing] the relevance of the information sought to the issues involved in the case.'"
Id.
In the case sub judice, the applicable subsection of Rule 45 would be (ii), pertaining to privileged or protected information. Plaintiff alleges that this information is protected because it is personal financial information. However, the information sought is claimed to be relevant to Third Party Defendants' defense of the matter because it will show whether Robert and/or Daniel claimed their now-asserted remainderman interest. This assertion is sufficient for Third Party Defendants to demonstrate the relevance of the information sought. There is no direct assertion by Plaintiff that the information is privileged, so the privilege issue is not decided by this decision. Thus, pursuant to Rule 26, the information sought does not even need to be admissible, it simply needs to appear as though it could reasonably lead to the discovery of admissible evidence. Again, this threshold appears to be met.
Based on the foregoing, Plaintiff's Motion to Quash Three Subpoenas Duces Tecum is denied. However, application for a specifically limited confidentiality order may be sought and approved by the Court prior to compliance with the three subpoenas.
3. With regard to Defendant and Third Party Plaintiff West Farms' Motion to Quash Discovery/In the Alternative Motion in Limine, seeking to exclude from discovery two letters sent from R. Brandon Jones, Esq. to H. Cubbage Brown, Esq, West Farms presents three arguments for excluding the letters: (1) they are protected as communication between lawyers in a matter of common interest; (2) they are protected by the work product privilege established in Superior Court Civil Rule 26(b)(3), which governs documents prepared in anticipation of litigation; and (3) they are protected as an attempt to compromise or settle a claim, pursuant to D.R.E. 408. West Farms also argues generally that the evidence would fail the D.R.E. 403 balancing test.
The letters in question are currently in the possession of Plaintiffs' attorney because Third Party Defendants' attorney produced them in response to Plaintiffs' First Request for the Production of Documents.
Plaintiffs, as well as the Fourth Party Defendants represented by Mr. Penza (collectively the "Beneficiaries"), objected to West Farms' motion. Plaintiffs and the Beneficiaries argue that there is no common interest between West Farms and the Third Party Defendants and, even if there is, the privilege can be waived by one of the parties to the common interest once they become adversaries. Second, they contend that D.R.E. 408 does not apply because there was no discussion of settlement negotiations or an offer to compromise. Plaintiffs' and the Beneficiaries' third assertion is that the attorney work privilege provided for in Rule 26(b)(3) is inapplicable because there was no expectation that the letters would be held in confidence.
Discussion
Delaware Uniform Rules of Evidence 502, which governs lawyer-client privilege, explains that a client may refuse to disclose communications made "(3) by the client or the client's representative or the client's lawyer or a representative of the lawyer to a lawyer or a representative of a lawyer representing another in a matter of common interest. . . ." In other words, "[Rule 502] also extends to the protection of confidential communications involving counsel for separate clients so long as the clients share a "common interest" sufficient to justify invocation of the privilege.'"
U.S. Bank Nat'l Ass'n v. U.S. Timberlands Klamath Falls, L.L.C., 2005 WL 2037353 (Del.Ch.).
Superior Court Civil Rule 26(b)(3) reads, in pertinent part, "a party may obtain discovery of documents and tangible things otherwise discoverable under subdivision (b)(1) of this Rule and prepared in anticipation of litigation or for trial by or for another party or by or for that other party's representative (including the other party's attorney, consultant, surety, indemnitor, insurer or agent) only upon a showing that the party seeking discovery has substantial need of the materials in the preparation of the party's case and that the party is unable without undue hardship to obtain the substantial equivalent of the materials by other means."
Delaware Uniform Rules of Evidence 408 states:
[e]vidence of (1) furnishing or offering or promising to furnish, or (2) accepting or offering or promising to accept, a valuable consideration in compromising or attempting to compromise a claim which was disputed as to either validity or amount is not admissible to prove liability for or invalidity of the claim or its amount. Evidence of conduct or statements made in compromise negotiations is likewise not admissible. . . .
While both sides make legitimate arguments, this Court will request copies of the letters so a more thorough inquiry can be made as to their contents and the validity of both parties' contentions. Thus the decision of this Court is deferred until these letters can be submitted to the Court for in camera review.
IT IS SO ORDERED.