In re Gorsoan Ltd.
| Decision Date | 15 June 2020 |
| Docket Number | No. 17-cv-5912 (RJS),17-cv-5912 (RJS) |
| Parties | In re Application of GORSOAN LIMITED and GAZPROMBANK OJSC for an Order Pursuant to 28 U.S.C. § 1782 to Conduct Discovery for Use in a Foreign Proceeding. |
| Court | U.S. District Court — Southern District of New York |
Since November 2013, Petitioners Gazprombank OJSC, a Russian bank, and its assignee Gorsoan Limited, a Cyprus limited liability company (together, "Gorsoan"), have sought discovery from Janna Bullock and others under 28 U.S.C. § 1782 in connection with a foreign proceeding in Cyprus. (See Doc. No. 1, 13-mc-397.) To say the least, Gorsoan's efforts have met with limited success. Now before the Court are Gorsoan's requests that the Court: (1) issue findings and draw adverse inferences that, in lieu of further discovery, can be used in the Cyprus proceeding; (2) order Bullock to produce responsive documents; (3) impose spoliation sanctions; and (4) impose other sanctions. (Doc. No. 55.) For the reasons set forth below, Gorsoan's requests are GRANTED in part and DENIED in part.
The present dispute can be traced back to August 2012, when Gorsoan sued Bullock and twenty-nine other defendants in the District Court of Limassol, Cyprus, claiming approximately $22 million in damages for fraud stemming from the defendants' diversion of bond proceeds allegedly owed to Gorsoan (the "Cyprus proceeding"). See In re Application of Gorsoan Ltd. & Gazprombank OJSC, No. 13-mc-397 (PGG), 2014 WL 7232262, at *1-3 (S.D.N.Y. Dec. 10, 2014), aff'd sub nom., Gorsoan Ltd. v. Bullock, 652 F. App'x 7 (2d Cir. 2016). In March 2013, the Cyprus court froze Bullock's assets worldwide and directed her to disclose all her assets exceeding 10,000 euros in value. (Doc. Nos. 4, 4-5, 13-mc-397.) As of April 2020, the Cyprus proceeding is still ongoing. (Doc. Nos. 61-63.)
On November 27, 2013, Gorsoan filed an application pursuant to 28 U.S.C. § 1782 in this district seeking discovery from Bullock, her daughter Zoe Bullock Remmel (together with Bullock, the "Bullocks"), RIGroup LLC (a limited liability company of which Bullock is the only member), and the Bullocks' former counsel, Stuart A. Smith. (Doc. Nos. 1, 2, 13-mc-397.) Judge Gardephe granted Gorsoan's § 1782 application on December 4, 2013. (Doc. No. 6, 13-mc-397.) One year later, Judge Gardephe denied the Bullocks' motions for reconsideration and to quash subpoenas to produce documents and appear for depositions, which the Second Circuit affirmed in June 2016. See Gorsoan, 652 F. App'x at 10; In re Application of Gorsoan, 2014 WL 7232262, at *12. Nevertheless, even after the Second Circuit's affirmance, the Bullocks refused to comply with certain aspects of the subpoenas and Judge Gardephe's orders. (Doc. Nos. 86, 87, 13-mc-397.) The parties' dispute over the Bullocks' non-compliance came before this Court as a miscellaneous matter pursuant to Part I in October 2016. (See Doc. No. 3 at 1.) Only after this Court held the Bullocks in contempt under Federal Rule of Civil Procedure 45(g) did they begin to comply with the subpoenas at issue. (Doc. Nos. 86, 87, 96, 13-mc-397.) Accordingly, on January 13, 2017, the Court closed Case No. 13-mc-397 and restored the matter to Part I. (Doc. No. 96, 13-mc-397.)
In August 2017, the parties submitted a joint letter apprising the Court of yet another subpoena-compliance dispute, which became the subject of the instant civil matter, Case No. 17-cv-5912. (Doc. No. 3.) Specifically, Gorsoan asserted that the Bullocks had wrongfully withheld whole categories of relevant documents and that Bullock refused to appear for her deposition. (Doc. No. 4 at 1-3.) With respect to the withheld documents, Gorsoan claimed, for example, thatBullock failed to produce any bank statements or real property records for any assets valued in excess of 10,000 euros, despite evidence indicating that Bullock clearly held such assets. (Id. at 3; Doc. No. 10 ("Sept. 2017 Conf. Tr.") at 3:3-4:15.) At a September 11, 2017 conference, Bullock and her counsel represented to the Court that she had fully complied with all Gorsoan's document requests. (Sept. 2017 Conf. Tr. at 9:16-20, 14:18-20.) With her production obligations purportedly fulfilled, Bullock also agreed to sit for a deposition, consistent with the subpoenas and prior orders issued by Judge Gardephe and the Second Circuit. (Id. at 7:9-10.)
Nevertheless, Bullock did not appear for her scheduled deposition on November 21, 2017, and initially did not agree to a later deposition date or accept service of a subpoena for a rescheduled deposition. (Doc. No. 13.) Shortly thereafter, the Court held a show-cause hearing, at which Bullock's counsel informed the Court that Bullock did not appear for her scheduled deposition because, remarkably, her counsel in related French legal proceedings advised her not to show up - ostensibly because the parties in that proceeding were apparently nearing a settlement and stay of all litigation matters. (Doc. No. 42 ("Dec. 2017 Conf. Tr.") at 8:13-18:24.) Faced again with the prospect of contempt - and with no global settlement or stay in fact reached in France - Bullock agreed to sit for a deposition on January 18, 2018 (Doc. No. 15), a date that was subsequently moved back to February 6, 2018 (Doc. No. 18).
Bullock ultimately "sat for a deposition" - literally, but as discussed below, not in any meaningful sense - on February 6, 2018. (Doc. No. 32 ("Feb. Dep. Tr.").) Her testimony was almost comical in its implausibility and flagrant obfuscation. (See Doc. No. 25 at 1-4.) Bullock answered "I don't know" approximately 180 times, disclaiming knowledge on basic questions such as who paid property taxes on the penthouse apartment where she lived (Feb. Dep. Tr. at 124:16-125:2), who paid for her daughter's private school tuition (id. at 171:13-18), who paidfor her daughter's Porsche (id. at 170:5-14), whether she had received any tax bills in the last year, and whether she was working with a tax professional or tax attorney (id. at 124:21-125:21), whether anyone owed her money (id. at 173:17-19), and roughly how much her monthly expenses were, including whether they were more than $5,000 (id. at 172:18-173:6; see also id. at 148:10-12 ). Bullock also testified that she did not "have any assets" or "control any assets or entities" (id. at 66:10, 81:6-8), including any bank accounts, debit cards, or credit cards, and that she did not keep cash on hand (id. at 113:20-114:11, 116:2-4; see also id. at 103:13-20 ()). To the extent Bullock admitted to knowing anything at all about how she paid for her lifestyle (or even her ordinary costs of living), she attributed her wealth to trusts that she in turn mostly knew nothing about (e.g., id. at 104:9-106:20, 123:4-124:15, 181:4-12), or cash that she received from her mother or daughter (id. at 114:4-115:25, 176:16-179:13).
Bullock's testimony relating to a multimillion-dollar property in Southampton, New York - a property which, unbeknownst to Gorsoan at the time of the deposition, Bullock had sold just two months earlier - was especially outrageous. Bullock testified that she had no ownership interest in the property, and that she merely performed groundskeeping functions. (Id. at 133:12-134:5.) When asked to further explain her basic duties as property manager, the following exchange, which was characteristic of the deposition as a whole, ensued:
(Id. at 159:25-162:14.)
Contrary to her testimony, however, Bullock was not merely an uninformed groundskeeper. When presented with documentary evidence - an email sent from Bullock's email address to a real estate agent, Tony Cerio, indicating that Bullock had been seeking to sell or rent the Southampton property - Bullock claimed initially that the email address was not hers and then suggested that her email address might have been compromised. (Id. at 130:8-136:2.) She also testified that she did not engage Cerio's real estate firm, Brown Harris Stevens, to list the property in question, and that she did not remember if she even knew who Cerio was. (Id. at 129:22-132:7.) Indeed, she repeatedly testified that she "cannot do anything" with respect to the property otherthan maintain the grounds. (Id. at 138:17-139:3; see also id. at 139:17-140:5 ().) Yet, in December 2017, less than two months before her February 2018 deposition, Bullock had actually sold the property with Cerio serving as the agent. (See Doc. No. 25 at 2.) After Gorsoan suspended the deposition due to concerns over the veracity of Bullock's answers (Feb. Dep. Tr. at 224:6-15), Bullock's counsel produced - for the first time - three documents relating to the sale of the Southampton property, including a Bargain and Sale Deed that Bullock herself had signed on behalf of the seller, Mid-Summer Dream...
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