In re Haynes, Case No. 3:16–bk–30352–SHB

Decision Date11 August 2017
Docket Number Case No. 3:16–bk–30917–SHB,Case No. 3:16–bk–30352–SHB, Case No. 3:16–bk–31214–SHB
Parties IN RE Annette Harris HAYNES aka Annette Harris, Debtor In re Clara Imogene Wright, Debtor In re Pamela Jo Hagstrom fka Pamela Jo Yount fka Pamela Jo Mendoza, Debtor
CourtUnited States Bankruptcy Courts. Sixth Circuit. U.S. Bankruptcy Court — Eastern District of Tennessee

WINCHESTER, SELLERS, FOSTER & STEELE, PC, J. Michael Winchester, Esq., E. Brian Sellers, Esq., 800 South Gay Street, Post Office Box 2428, Knoxville, Tennessee 37901–2428, Attorneys for Gwendolyn M. Kerney, Chapter 13 Trustee

SAMUEL K. CROCKER, ESQ., UNITED STATES TRUSTEE, Nicholas B. Foster, Esq., Historic United States Courthouse, 31 East 11th Street, 4th Floor, Chattanooga, Tennessee 37402, Attorney for United States Trustee

GENTRY, TIPTON & MCLEMORE, P.C., Maurice K. Guinn, Esq., Post Office Box 1900, Knoxville, Tennessee 37901, Attorneys for UpRight Law, LLC

MEMORANDUM OPINION ON CHAPTER 13 TRUSTEE'S AMENDED MOTION TO COMPEL UPRIGHT LAW TO RESPOND TO DISCOVERY REQUESTS

SUZANNE H. BAUKNIGHT, UNITED STATES BANKRUPTCY JUDGE

Several contested matters are pending before the Court concerning Law Solutions Chicago LLC dba UpRight Law LLC ("UpRight Law") (see Mem. & Order entered Jan. 5, 2017 [Wright Doc. 158]1 ). On September 15, 2016, the Court ordered that all rules in Part VII of the Federal Rules of Bankruptcy Procedure, incorporating the Federal Rules of Civil Procedures, including all sections of Rule 26 except (a)(1) and (f), shall apply in this contest matter. [Wright Doc. 119.] As a result, the parties engaged in discovery, and the Chapter 13 Trustee filed a Motion to Compel UpRight Law to Respond to Discovery Requests and Motion for Expenses ("Motion to Compel") [Wright Doc. 199], amended on June 19, 2017, by the Chapter 13 Trustee's Amended Motion to Compel UpRight Law to Respond to Discovery Requests ("Amended Motion") [Wright Doc. 226].

I. PROCEDURAL POSTURE

The Motion to Compel focused on the validity of the "self-critical analysis privilege" raised by UpRight Law in response to numerous of the Chapter 13 Trustee's initial interrogatories ("Initial Interrogatories") and initial requests for production ("Initial RFP"). UpRight Law responded to the Motion to Compel by abandoning the assertion of the privilege [Wright Doc. 207] and standing, instead, on its assertions that the discovery requests are not relevant to the matters set forth in the Court's January 5, 2017 Memorandum and Order ("Issues Order"), not proportional to the needs of the case, and unduly burdensome. UpRight Law also objected to production of confidential material before entry of a protective order.2 Although UpRight Law included in its response to the Motion to Compel the text of its initial responses to the discovery requests that were the subject of the Motion to Compel, which included general objections to some of the requests based on attorney-client privilege and/or the work product doctrine, UpRight Law did not argue the issue of attorney-client privilege or work product protections in its response to the Motion to Compel. [See Wright Doc. 207.]

At the May 24 hearing on the Motion to Compel, because of UpRight Law's abandonment of the self-critical analysis privilege and because UpRight Law was preparing to amend or supplement its discovery responses after entry of the Protective Order, it became clear that to the extent a discovery dispute might still exist after the Chapter 13 Trustee received and reviewed UpRight Law's amended and supplemental discovery responses, it would be necessary for the Chapter 13 Trustee to amend the Motion to Compel. To aid the parties, however, the Court walked through each of the discovery requests raised by the Chapter 13 Trustee in the Motion to Compel to discuss the Court's initial views of UpRight Law's objections to each request. The parties agreed at the May 24 hearing that UpRight Law would supplement its discovery responses on or before June 2, when it also would answer the Chapter 13 Trustee's second set of interrogatories ("Second Interrogatories")3 and requests for production of documents ("Second RFP"). The Court directed the Chapter 13 Trustee to file a status report on or before June 7 to inform the Court of the status of the Motion to Compel in light of the amended and supplemental discovery responses by UpRight Law.

On June 7, the Chapter 13 Trustee filed her status report to advise the Court that UpRight Law had not provided its Amended Answers, Responses, and Objections to Chapter 13 Trustee's First Set of Interrogatories and Requests for Production of Documents ("Amended Responses") [Wright Doc. 219–1] until the end of the business day on June 5. Further, the only additional document produced by UpRight Law after entry of the Protective Order was its operating agreement, notwithstanding that UpRight Law had raised numerous objections to production of confidential material, which objections were expected to be resolved after entry of the Protection Order. UpRight Law neither sought nor obtained an agreement from the Chapter 13 Trustee to extend the deadline from June 2 to June 5. In addition, UpRight Law missed the June 2 extended deadline for responding to the Second Interrogatories and Second RFP, such responses not being received by the Chapter 13 Trustee until the afternoon of June 7.4 UpRight Law's delay resulted in the Chapter 13 Trustee being unable to analyze the responses to inform the Court of any issues concerning those responses in the Court–ordered status report.

At a June 8 hearing on the United States Trustee's motion to continue the trial date because of discovery delays, the Court directed the Chapter 13 Trustee to file any amended motion to compel on or before June 19 and UpRight Law to file its response on or before June 26, with such amended motion to be heard on June 29.

The Chapter 13 Trustee filed her Amended Motion on June 19, seeking to compel responses by UpRight Law to Initial Interrogatories numbered 12, 17, and 23; to Initial RFP numbered 3, 4, 5, 6, 7, 8, 9, 10, 11, 14, 15, 16, 17, 18, 20, 21, 23, and 24; to Second Interrogatories numbered 16; and to Second RFP numbered 1. UpRight Law responded to the Amended Motion on June 26, and the Court held a hearing on the Amended Motion on June 29.

At the June 29 hearing, the parties reached agreement about some of the issues, and the Court took the matter under advisement as to the remaining issues but directed UpRight Law to file amended privilege and redaction logs by July 14. After reviewing the amended logs that were timely filed by UpRight Law, the Court issued an order on July 26 to reset the Amended Motion for August 2 because of the failure of UpRight Law to follow the Court's directives at the June 29 hearing about the content of the amended logs.

UpRight Law filed further amended privilege and redaction logs on the afternoon of August 1, leaving insufficient time for the Court or the Chapter 13 Trustee to review the logs for a determination of their sufficiency under Federal Rule of Civil Procedure 26(b)(5)(A). At the hearing on August 2, the Court continued the hearing on the Amended Motion to August 9 and directed the parties to be prepared to argue the sanctions issue on that date as well as any remaining privilege issues. The Court directed the Chapter 13 Trustee to file a status report by noon on August 8, setting forth the trustee's position regarding the sufficiency of the amended logs, and the Court also allowed UpRight Law one final opportunity to amend the logs on or before August 4. UpRight Law again amended the logs on August 4, making minor changes. [Wright Docs. 261, 262, 263.]

On August 8, the Chapter 13 Trustee filed her Status Report of Chapter 13 Trustee on Amended Motion to Compel UpRight Law to Respond to Discovery Requests [Wright Doc. 264] ("Final Reply").

The Final Reply summarized the previous arguments concerning privilege and addressed the request for discovery sanctions by providing an affidavit of counsel setting out the attorneys' fees incurred by the Chapter 13 Trustee for "seeking relief, reviewing discovery and multiple privilege logs, enforcement of disclosures, and participating in discovery motions after good faith conferences and attempts to confer with attorneys representing UpRight Law ..., excluding any discovery matters or disputes relating to the Layne Gillespie deposition and disputes related thereto." [Wright Doc. 264–1 at ¶ 4.] The Final Reply makes the following arguments concerning the attorney-client privilege and work product doctrine:

1. The Chapter 13 Trustee has been trying to obtain sufficient discovery production from UpRight Law since its May 9 letter requesting a pre-motion discovery conference, and the Court has held four hearings on the issue, in addition to the pre-motion conference. [Id. at ¶ 2.]
2. UpRight Law's initial responses were inadequate and the Wright/Haynes/ Hagstrom Redaction Log was insufficient to adequately invoke attorney-client privilege and/or work product protection. [Id. at ¶ 3.]
3. UpRight Law's assertion of the "self-critical analysis privilege" was withdrawn only after the Chapter 13 Trustee expended time and expense to research and brief the issue. UpRight Law's insistence on the assertions of privilege did not begin until after abandonment of the "self-critical analysis privilege." [Id. at ¶ 4.]
4. Although UpRight Law has produced voluminous documents, most of the documents produced are not responsive to the discovery requests, and the documents identified by UpRight Law that are responsive are either redacted or withheld on claims of privilege. None of the documents produced have been marked to aid in their review, and until July 31, the logs produced in support of the privilege assertions did not identify the discovery request to which the withheld or redacted document is responsive. [Id. at ¶ 5.]
5. UpRight Law failed to comply with the Court's express directives at the June 29 hearing
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