Insulation Unlimited, Inc. v. Two J's Properties, Ltd.

• Decision Date: 26 November 1997
• Docket Number: No. 97-324,97-324
• Citation: 95 Ohio Misc.2d 18,705 N.E.2d 754
• Parties: INSULATION UNLIMITED, INC. v. TWO J'S PROPERTIES, LTD. et al. *
• Court: Ohio Court of Common Pleas

Page 18

95 Ohio Misc.2d 18

705 N.E.2d 754

INSULATION UNLIMITED, INC. v.TWO J'S PROPERTIES, LTD. et al.^*

No. 97-324.

Ohio Court of Common Pleas Miami County.

Decided Nov. 26, 1997.

Gerald L. Turner, Vandalia, for plaintiff.

Jeffrey D. Swick, Columbus, for defendants.

JEFFREY M. WELBAUM, Judge.

This matter came on for the court's consideration upon the motion of defendants for a protective order filed October 22, 1997.On October 24, plaintiff filed its memorandum in response.Plaintiff filed a supplemental memorandum on November 14, to which defendants responded on November 17.

Plaintiff, Insulation Unlimited, Inc., brings an action for money damages premised on various claims stemming from an account for services.It states that it repaired a roof at a building located at 125 Clark Avenue, Piqua, Ohio, from October 29, 1995 until the spring of 1996.In its memorandum and supplemental memorandum, plaintiff outlines and displays by a chart an elaborate series of transactions involving various corporations.According to the information stated in the pleadings and alleged in the memoranda, these transactions allegedly involve entities in which the individually named Scarbrough defendants were, in various respects, controlling shareholders, officers, directors, or members.These transactions, subsequent to the contract and roof repair, are alleged to consist of corporate dissolutions, total asset transfers to new corporations or entities, recorded and unrecorded mergers, spinoffs, name changes, and possible assumptions of liability.Plaintiff first contends that the depositions are necessary to ascertain who has the obligation to pay the underlying obligation in the event that it is proven.Second, plaintiff states that it needs to know whether the responsible parties have taken intentional steps through corporate manipulations to render themselves judgment-proof.

Plaintiff claims that it needs to depose James Scarbrough, John D. Scarbrough, Jr., and John D. Scarbrough, Sr. as individual defendants and in their capacity as corporate officers and directors of several of these corporations to ascertain this information.Plaintiff states that it has offered to enter into a stipulation as to which defendant would be responsible for paying and escrowing the funds for payment of the judgment in the event plaintiff is successful on the merits, but the defendants have refused.

Defendant MVWE, f.k.a. Piqua Waste Equipment, Inc., admits that it entered into the contract with plaintiff and filed a counterclaim alleging breach of contract and defective and negligent workmanship.However, plaintiff has expressed its need to know information regarding whether MVWE is the proper party responsible for the obligation for purposes of collection of the judgment.

The defendants give several bases to support their contention that they should be granted a protective order as to oral depositions.In essence, the defendants claim that since John D. Scarbrough Sr. and James Scarbrough have never had any contact with plaintiff, attempts to gather information from them is frivolous and the lawsuit is frivolous.They state through their foregoing filings and by their answer and counterclaim that the information concerning this transaction is known only by John D. Scarbrough, Jr., who entered into the contract with plaintiff as an officer of defendant MVWE, f.k.a. defendantPiqua Waste Equipment, Inc.Therefore, they contend that plaintiff is interested not so much in discovering information regarding the corporate defendants as in subjecting the Scarbrough defendants to annoyance, embarrassment, oppression, and undue burden.Grafted onto this argument is that the information sought is irrelevant.

DefendantsJohn D. Scarbrough Jr. and Sr. give additional grounds in support of their motion.John D. Scarbrough, Jr. states that he resides in Jensen Beach, Florida, and should not be required to appear here to attend his deposition.He informed plaintiff that he would be here for six days in November and agreed to attend his deposition on the condition that the other Scarbrough defendants were not required to do so.He states that this offer was refused because plaintiffs wanted to depose all three of the Scarbrough defendants.He was not served with a notice to take his deposition concerning the time he was in this county.Presumably, he has left the county and is presently in Mexico on business as he indicated he would be in the defendants' memoranda.DefendantJohn D. Scarbrough, Sr. states through the representations of his attorney that he is eighty-five years old and a deposition would be highly upsetting for him.

Plaintiff does not contend that John D. Scarbrough, Sr. and James Scarbrough know about the details of the contract.Plaintiff wants to know about the obligations owed by virtue of the contract by their various entities which possibly owned the property during the repair period or thereafter assumed the liability of the alleged obligation.It is too early to tell whether the discovery sought is frivolous or whether the entire lawsuit is frivolous.We will not know the answers to these issues until the information is gathered and a prevailing side is determined.In the meantime, the court will attempt to protect the rights of all parties during the discovery process in accordance with legal precedent.

The first issue presented is whether these parties have met their individual burdens to demonstrate good cause justifying issuance of a protective order under Civ.R. 26(C), to prohibit plaintiffs from taking their depositions in Miami County, Ohio, as required by the notice.

Matters are exempt from discovery only if the matter is privileged or is totally irrelevant to the subject matter of the inquiry.The burden is on the objecting party to clearly show that the information sought is privileged or not relevant.Mut. of Omaha Ins. Co. v. Garrigan(1971), 31 Ohio Misc. 1, 60 O.O.2d 29, 285 N.E.2d 395.The relevancy test for purposes of discovery has been given a very liberal construction.Stokes v. Lorain Journal Co.(1970), 26 Ohio Misc. 219, 55 O.O.2d 363, 266 N.E.2d 857.The party opposing a discovery request has the burden to establish that the requested information would not reasonably lead to the discovery of admissible evidence.State ex rel. Fisher v. Rose Chevrolet, Inc.(1992), 82 Ohio App.3d 520, 612 N.E.2d 782.Plaintiff has established relevance of the information sought herein when liberally construed for purposes of discovery.

It is the burden of the defendants as the objecting parties to clearly show that the information sought is privileged or not relevant.They have not satisfied this burden.Rather, the defendants have argued that plaintiff may attempt to obtain the same information in a less intrusive way by way of deposition of an organizational representative under Civ.R. 30(B)(5).The language of that rule provides that it "does not preclude taking a deposition by any other procedure authorized by these rules."The rule gives the proponent of the deposition the choice of whom it will depose.It does not mandate that the organization should be given the choice of designating a representative.

A party may obtain discovery regarding any unprivileged matter that is relevant to the subject matter of the litigation.The rule comports with the policy of affording parties ample opportunity to conduct discovery.SeeStegawski v. Cleveland Anesthesia Group, Inc.(1987), 37 Ohio App.3d 78, 85, 523 N.E.2d 902, 910.At the same time, a court may limit discovery to prohibit "fishing expeditions" in which a party gives an overly broad discovery request in hopes of stumbling across unforeseen information that aids his case.SeeBland v. Graves(1993), 85 Ohio App.3d 644, 659, 620 N.E.2d 920, 929-930.To satisfy these concerns, a trial court must balance the relevance of the discovery request, the party's need for discovery, and the hardship upon the party from whom the discovery is requested.Huebner v. Miles(1993), 92 Ohio App.3d 493, 501, 636 N.E.2d 348, 353-354.The trial court is expected to exercise broad discretion in the regulation of discovery.Bland, 85 Ohio App.3d at 659, 620 N.E.2d at 929-930;Kalaitsides v. Greene (June 12, 1996), Summit App.No. 17196, unreported, 1996 WL 325300.

The objecting defendants have not clearly shown that the information sought is irrelevant.Therefore the court will proceed to balance the relevance of the discovery request, the parties' need for discovery, and the hardship upon the party from whom the discovery is requested.Huebner v. Miles, supra.

Although the rules regarding party and witness deponents are different, there are common elements.The Civil Rules permit a party to be compelled to testify in a deposition only by way of a notice of examination under Civ.R. 30(A). Civ.R. 45(A)(1)(C).Witness deponents may be compelled to submit to deposition only under Civ.R. 45. Civ. R. 30(A).Civ.R. 45(A)(b)(i) and (ii) provide that subpoenas may be used to compel attendance or production of documents or tangible things from witness deponents.Civ.R. 45(C) provides protection to persons by requiring the party compelling attendance to avoid imposing undue burden or expense on the person subpoenaed.Subsection (C)(3)(d) authorizes the court to quash or modify the subpoena or impose conditions if compliance would subject the person to "undue burden."Likewise, a deponent may move for a protective order to prevent "annoyance, embarrassment, oppression, or undue burden or expense" under Civ. R. 26(C).Midwest Sportservice, Inc. v. Andreoli(1981), 3 Ohio App.3d 242, 3 OBR 273, 444 N.E.2d 1050,

Courts, legislatures, and commentators have struggled with resolving where parties may be required to submit to depositions.This is reflected by the number of motions for protective orders filed with the court on the subject.Trial courts have been expected to exercise broad...