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CresCom Bank v. Terry

United States District Court, D. South Carolina, Charleston Division

August 31, 2017

CresCom Bank, successor by merger to Community FirstBank, Plaintiff,
Edward L. Terry; Harris Street, LLC, n/k/a CCT Reserve, LLC; Sugarloaf Marketplace, LLC; and CCT Reserve, LLC, Defendants.


          PATRICK MICHAEL DUFFY United States District Judge.

         This matter is before the Court on three motions. First, Plaintiff CresCom Bank asks the Court to hold Defendant Edward L. Terry and his wife, Elaine C. Terry in contempt for refusing to comply with an order the Court issued in this case on July 6, 2017 (ECF No. 123). Second, the Terrys asks the Court for permission to file a sur-reply in the briefing on CresCom's contempt motion (ECF No. 131). Finally, the Terrys ask the Court to alter, amend, or clarify its July 6 order (ECF No. 124). For the following reasons, the Court grants the motion for leave to file a sur-reply, denies the motion to alter, amend, or clarify, and defers a decision on the contempt motion.


         I. Motion to Alter, Amend, or Clarify

         A. Timeliness of Motion

         The Terrys state they seek relief under Rules 54(b) and 59(e) of the Federal Rules of Civil Procedure. The Court is not persuaded that either rule applies. Rule 59(e) motions must be made twenty-eight days after entry of a final judgment. The Court's July 6 order was not a final judgment; rather, the latest final judgment was entered over a year ago. Thus, a Rule 59(e) motion would be untimely. So too with a motion under Rule 54(b). That rule allows courts to modify interlocutory orders before entry of final judgment. Although the July 6 order was interlocutory, it was entered long after final judgment. Cf. Moore v. Lightstorm Entm't, No. CV RWT-11-3644, 2017 WL 219368, at *1 (D. Md. Jan. 19, 2017) (stating Rule 54(b) does not apply to orders compelling post-judgment discovery because it expressly allows modification of interlocutory orders before entry of final judgment).

         There appears to be an absence of authority on the deadline for seeking reconsideration of a post-judgment discovery order. See Moore, 2017 WL 219368, at *1 (noting the “absence of a rule on point” in this circuit). Nonetheless, the Court views the Terrys' motion as untimely. The July 6 order required that the Terrys produce documents by July 21 and that Mr. Terry appear for a deposition by July 28. The Terrys, however, did not file their motion until August 3, well after those deadlines had expired. Under Local Civil Rule 7.03-a rule the Court cited in its July 6 order- motions should be filed “immediately after the issues raised thereby are ripe for adjudication.” Local Civ. Rule 7.03 (D.S.C.). The issues the Terrys raise in their motion became ripe when the Court entered the July 6 order. Filing their motion nearly a month later-and after the order's deadlines expired-was in no way consistent with Rule 7.03.

         The untimeliness of the Terrys' motion is a sufficient basis for denying it. Out of an abundance of caution, however, the Court will address the motion on its merits.[1]

         B. Mrs. Terry

         The Court's July 6 order, as it relates to Mrs. Terry, concerns her refusal to respond to a document subpoena that CresCom issued last December. Although Mrs. Terry raised several arguments in defense of her refusal, the Court found them to be untimely because she failed to properly assert them within the deadline set forth in Federal Rule of Civil Procedure 45(d)(2)(B). Consequently, the Court concluded, the arguments were waived.

         Mrs. Terry claims the Court's waiver decision was clearly erroneous. First, she argues she could not have waived her argument because the subpoena was never properly served on her and thus she never had an enforceable deadline for objecting to the subpoena.[2] Subpoenas are served by “delivering” a copy to the person named therein. Fed.R.Civ.P. 45(b)(1). In this case, a process server went to a house that Mrs. Terry's company owns and that the Terrys use as a vacation home, and handed the subpoena to Mr. Terry. Mrs. Terry argues that did not constitute delivery because Rule 45(b)(1) requires personal service. The Court disagrees. The process server's method of delivery was reasonably calculated to ensure Mrs. Terry received the subpoena. Indeed, despite numerous opportunities to do so, Mrs. Terry has never asserted that she did not actually get the subpoena in a timely fashion. The circumstances present in this case constituted delivery. See, e.g., Phillips v. Ottey, No. CV DKC 14-0980, 2016 WL 6582647, at *2 n.5 (D. Md. Nov. 7, 2016) (“The United States Court of Appeals for the Fourth Circuit has not addressed whether a non-party subpoena must be personally served, but courts in this district have focused on whether the recipient has received ‘actual notice' of the subpoena.” (citation omitted)); Bland v. Fairfax Cty., 275 F.R.D. 466, 471-72 (E.D. Va. 2011) (holding Rule 45(b) does not require “personal service to the exclusion of other manners of service” so long as “the non-personal service was effected by means reasonably sure to complete delivery”); In re Falcon Air Exp., Inc., No. 06-11877, 2008 WL 2038799, at *2-3 (Bankr. S. D. Fla. May 8, 2008) (rejecting “as antiquated the so-called majority position interpreting Rule 45 as requiring personal service, ” and instead adopting “the better-reasoned, modern, emerging minority position, which holds that substitute service of a subpoena is effective on a nonparty witness under Rule 45” and finding permissible a subpoena served on a party's wife at a residence owned by him); Hall v. Sullivan, 229 F.R.D. 501, 505 (D. Md. 2005) (holding that Rule 45(b) does not require personal service).

         Mrs. Terry next asserts CresCom's lawyers withdrew the subpoena in January 2017 and then improperly tried to enforce it by moving for supplementary proceedings several weeks later. Accordingly, she contends, she could not have waived her arguments because there was no active subpoena to which she could object. She further argues that even if CresCom's lawyers did not actually withdraw the subpoena, her arguments should not be deemed waived because they led her to believe they would do so.

         CresCom vigorously disputes Mrs. Terry's arguments. It denies that it ever withdrew the subpoena or that its lawyers said or did anything that would have led her to believe the subpoena was withdrawn.

         The record contains conflicting evidence about what counsel in this case discussed in regards to the subpoena. However, the Court need not resolve that conflict. Its existence defeats Mrs. Terry's argument that the Court made a clear error. Moreover, even if the Court did clearly err on this issue, the remedy for such an error would be to address ...

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