First Fin. Bank, N.A. v. Bauknecht

Decision Date24 October 2014
Docket NumberCase No. 12–cv–1509
Citation71 F.Supp.3d 819
CourtU.S. District Court — Central District of Illinois
PartiesFirst Financial Bank, N.A.,Plaintiff, v. Scott Bauknecht and State Bank of Graymont, Defendants.

Robert A. Kearney, Law Office of Robert Kearney, Bloomington, IL, for Plaintiff.

Nile J. Williamson, Attorney at Law, Tracy C. Litzinger, Jeffrey G. Sorenson, Michael D. Gifford, Timothy D. Gronewold, Howard & Howard Attorneys PC, Peoria, IL, for Defendants.

JOE BILLY McDADE, United States Senior District Judge

This matter is before the Court on cross-motions for summary judgment. Each of the three parties has filed a Motion for Summary Judgment, and each Motion is fully briefed. A discovery motion (Doc. 98) relating to evidentiary issues is also before the Court. For the reasons explained below, Plaintiff First Financial's Motion for Summary Judgment is granted in part with respect to Counts I, III, and IV and otherwise denied, Defendant Bauknecht's Motion for Summary Judgment is granted with respect to Counts V and VIII, granted in part with respect to Count IV, and otherwise denied, and Defendant State Bank of Graymont's (Graymont) Motion for Summary Judgment is granted with respect to Counts VI, VII, and VIII, granted in part with respect to Count IV, and otherwise denied. Graymont's discovery motion is granted in part and denied in part.

Procedural History

Plaintiff filed the present case on December 13, 2012, bringing numerous claims relating to Defendant Scott Bauknecht's transition from employment with Plaintiff to his subsequent employment with Defendant Graymont. Plaintiff brings eight claims: breach of contract against Defendant Bauknecht (Count I), breach of fiduciary duty against Defendant Bauknecht (Count II), misappropriation of trade secrets against both Defendants (Count III), conversion against both Defendants (Count IV), violation of the Federal Computer Fraud and Abuse Act against Defendant Bauknecht (Count V), tortious interference with contract against Defendant Graymont (Count VI), tortious interference with prospective economic advantage against both Defendants (Count VII), and civil conspiracy against both Defendants (Count VIII).

Defendants previously moved to dismiss, in part, Plaintiff's Complaint. These motions were granted in part and denied in part, pursuant to the Report and Recommendation by Magistrate Judge Cudmore, to which no objections were filed and which was thus adopted by the Court. (Doc. 25). As a result, Plaintiff's Count IV was limited to conversion of property that does not constitute trade secrets. (Doc. 25 at 2). No other claims were dismissed. After the discovery period, which included several discovery disputes, this matter now proceeds to summary judgment.

Discovery Motion

After the close of discovery, Defendant Graymont filed a Motion to Overrule Objections and Allow Use of Answers and Admissions (Doc. 98). This Motion was filed under seal, because it contains extensive quotations from a deposition that contain some potentially confidential information. Because the ruling on this Motion can be given without describing any confidential information, it is contained herein and not under seal.

A deposition of Plaintiff's General Auditor Barry Stuck, pursuant to Federal Rule of Civil Procedure 30(b)(6), was taken on April 3, 2014. In response to several questions about Plaintiff's investigation and proof in this case, Plaintiff's counsel objected, primarily on the basis of work product. The answers in dispute are all subject to this objection, and many of the answers are accordingly specified by Plaintiff's counsel to be only based on Mr. Stuck's personal knowledge, not as a representative of Plaintiff.

At various times in the deposition, Defendant Graymont questioned Mr. Stuck about the proof Plaintiff had to prove its case and on what evidence Plaintiff was basing its claims. For example, Graymont asked what information and materials are being referenced in paragraph nineteen of the Complaint, which alleges the use of confidential information taken from Plaintiff under Count III. Mr. Stuck responded that he was only aware of one particular list of names. Graymont seeks to use this information as an admission that no other evidence supports Count III.

Under Rule 30(b)(6), a party may depose a corporation or other organization through a designated representative. This representative testifies on behalf of the organization about the identified topics. The work product doctrine protects from discovery documents and items prepared in anticipation of litigation by a party or its representative. Fed.R.Civ.P. 26(b)(3). The “mental impressions, conclusions, opinions, or legal theories of a party's attorney or other representative concerning the litigation” are specifically protected. Fed.R.Civ.P. 26(b)(3)(B). However, it does not protect the discovery of facts, only the legal theories drawn from the facts. S.E.C. v. Buntrock, 217 F.R.D. 441, 446 (N.D.Ill.2003) (“Such discovery clearly seeks not the facts, but the manner in which the SEC intends to marshal them.”).

Defendant Graymont was not seeking to obtain any documents or items prepared in anticipation of litigation. Accordingly, the work product doctrine does not apply. But there is a somewhat related, unarticulated problem with the questions. The problem with Defendant Graymont's questions is not necessarily the information they were attempting to obtain, but Graymont's intended use of the answers. Graymont was trying to pin Plaintiff down to make admissions about its claims by questioning its representative about the facts in support.

Questions about legal theories or requiring the application of law are better answered through interrogatories. See United States v. Taylor, 166 F.R.D. 356, 362 n. 7aff'd, 166 F.R.D. 367 (M.D.N.C.1996). “Whether a Rule 30(b)(6) deposition or a Rule 33(c) contention interrogatory is more appropriate will be a case by case factual determination.” Id.

Here, the topics of Defendant Graymont's questions are more appropriate for contention interrogatories. They ask what evidence or facts were or will be used to support each of Plaintiff's claims. This is more appropriately done in the form of written interrogatories, as they are filtered through an attorney that is familiar with the case, the discovery, and the law. See Beloit Liquidating Trust v. Century Indem. Co., 02 C 50037, 2003 WL 355743, at, *5–6 (N.D.Ill. Feb. 13, 2003) (concluding 30(b)(6) deposition topic of factual basis for claim more appropriate for written interrogatories). Mr. Stuck could not be expected to review the entirety of discovery productions and apply the law behind the various claims and reach a complete and conclusive answer about what evidence supports which claims. Plaintiff's objection was geared toward preventing Graymont from doing what it correctly anticipated Graymont would do: try to limit Plaintiff's claims to the evidence known to Mr. Stuck. Defendant Graymont could have filed a contention interrogatory to obtain such information, but did not, and discovery has now closed. The Court finds that although Plaintiff's stated grounds for the objection were not entirely accurate, the end result is adequate. Mr. Stuck's testimony about the facts in support of the claims was limited to his personal knowledge, to avoid Defendant Graymont using them as evidentiary admissions. This is a happy medium, and requires no further relief from the Court.1

However, there is one line of questioning which is removed enough from an attempt to limit Plaintiff's proof, and based more on factual information, for which Plaintiff's objection is overruled. Defendant Graymont asked about the inspection or forensic examination that was conducted of Bauknecht's computer after he left his employment with Plaintiff. This is a reasonable line of questioning, not asked with respect to specific complaints or seeking to limit evidence Plaintiff could use to support its claims, but merely seeking facts. Defendant Graymont was entitled to answers from Plaintiff, as a corporate entity, as to the inspection of Bauknecht's computer after he left, and this is not work product or otherwise more appropriate to obtain through interrogatories. Accordingly, this objection is overruled. However, it is not clear that any further remedy is necessary at this stage, as Mr. Stuck provided answers to the questions presented, and apparently even answered them as a corporate representative. Thus, Defendant Graymont's discovery-related motion is granted in part, and denied in part.

Summary Judgment Standard

Summary judgment shall be granted where “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). In ruling on a motion for summary judgment, the Court must view the evidence in the light most favorable to the non–moving party. SMS Demag Aktiengesellschaft v. Material Scis. Corp ., 565 F.3d 365, 368 (7th Cir.2009). All inferences drawn from the facts must be construed in favor of the non-movant. Moore v. Vital Prods., Inc., 641 F.3d 253, 256 (7th Cir.2011).

To survive summary judgment, the “nonmovant must show through specific evidence that a triable issue of fact remains on issues on which he bears the burden of proof at trial.” Warsco v. Preferred Technical Grp., 258 F.3d 557, 563 (7th Cir.2001) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ). If the evidence on record could not lead a reasonable jury to find for the non-movant, then no genuine issue of material fact exists and the movant is entitled to judgment as a matter of law. See McClendon v. Ind. Sugars, Inc ., 108 F.3d 789, 796 (7th Cir.1997). At the summary judgment stage, the court may not resolve issues of fact; disputed material facts must be left for resolution at trial. Anderson v. Liberty Lobby, Inc ., 477 U.S. 242, 249–50, ...

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