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Stephenson v. McCoy

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

February 2, 2018

Allen D. Stephenson, Plaintiff,
v.
Mark McCoy and Carolina Arms Group, LLC, Defendants.

          OPINION AND ORDER

          Donald C. Coggins, Jr. United States District Judge

         This matter is before the Court on a Motion to Compel filed by Plaintiff on November 13, 2017. ECF No. 28. On January 29, 2018, Defendants filed their Response in Opposition to Plaintiff's Motion to Compel.[1] ECF No. 45. The following day, Plaintiff filed a Reply. ECF No. 46.

         I. Background

         This lawsuit involves claims of fraud, breach of contract, breach of fiduciary duty, breach of contract accompanied by fraudulent acts, conversion, violation of securities acts, and unjust enrichment. ECF No. 1. The Complaint alleges that Plaintiff provided Defendant McCoy with $132, 500 based upon Defendant McCoy's promise to build 54 handguns incorporating Plaintiff's unique sighting mechanism. ECF No. 1 at 3. The Complaint further alleges that Plaintiff sent Defendant McCoy an additional $175, 000 to purchase one half of Defendant Carolina Arms Group, LLC, for the development and production of a polymer handgun. ECF No. 1 at 4. Plaintiff contends that Defendants have failed to satisfy these terms.

         On August 23, 2017, Plaintiff served discovery on Defendants. ECF No. 28 at 1. Plaintiff alleges that Defendants have not fully responded to many of his discovery requests, particularly in regards to requests seeking information and documents about how Defendants used Plaintiff's funds. Thereafter, Plaintiff filed a Motion to Compel on November 13, 2017. ECF No. 28.

         II. Analysis

         “Discovery is not supposed to be a shell game, where the hidden ball is moved round and round and only revealed after so many false guesses are made and so much money is squandered.” Lee v. Max Int'l, LLC, 638 F.3d 1318, 1322 (10th Cir. 2011). When a party feels at liberty to disobey discovery requests, “weeks or months (as in this case) pass without progress in the litigation.” Id. at 1321. Here, the Court has been asked to address a number of deficient discovery responses to rather straightforward discovery requests. As an initial matter, Defendants claim that Plaintiff's motion is premature because it does not contain a meet and confer certification. ECF No. 45 at 3. After reviewing the filings, the Court finds that Plaintiff's motion was properly filed. See ECF No. 28 at 2 (“Accordingly, prior to filing this Motion, the Undersigned has attempted to resolve the issues raised herein to no avail.”). Defendants also argue that Plaintiff should not be awarded attorneys' fees and costs for any discovery violations. Plaintiff's filings are clear that he is not seeking sanctions of any kind and, instead, is seeking only a court order requiring Defendants to identify and produce responsive information. Each of Plaintiff's claims will be addressed in turn.

         A. Interrogatory 5

         Plaintiff's Interrogatory 5 states: “Identify by institution name, address, account holder name, and account number each account into which Defendants, or anyone acting for them, deposited or had funds wired with respect to: a. the $132, 500 received from Plaintiff; and b. the $175, 000 received from Plaintiff.” ECF Nos. 28-1 at 4-5; 28-3 at 4-5. Defendants responded that the $132, 500 was deposited into Defendant Carolina Arms Group, LLC's business checking account at the Bank of the Ozarks and that the $175, 000 was deposited in a separate money market account at the Bank of the Ozarks. ECF Nos. 28-1 at 5; 28-3 at 5. Defendants now contend that this information is fully responsive to Plaintiff's interrogatory as Plaintiff has much of the requested information already and is able to subpoena the bank records. However, even if this assertion is true, Defendants have an obligation to fully respond to Plaintiff's request. Therefore, the Court directs Defendants to respond to Plaintiff's Interrogatory 5 within ten (10) days of this Order.

         B. Interrogatory 6

         Plaintiff's Interrogatory 6 states: “Identify each transaction in which Defendants, or anyone acting on their behalf, transferred or disbursed any part of the $132, 500 or the $175, 000 received from Plaintiff, including the name address, and account number of any account to which any part of the funds were transferred or, if transferred or disbursed by check, identify each check and cancelled check.” ECF Nos. 28-1 at 5; 28-3 at 5. Defendants generally responded that the funds were used to develop and design the handguns. Id. Despite clearly indicating that Defendants incurred costs and expenses related to this development and design, Defendants provide no meaningful information to Plaintiff about how the money was spent or to whom it was paid. Defendants' responses are plainly deficient, and the Court directs Defendants to fully respond to Plaintiff's Interrogatory 6 within ten (10) days of this Order.

         C. Interrogatory 7

         Plaintiff's Interrogatory 7 states: “If Defendants contend they spent any money to fulfill the order for guns placed by Plaintiff/1911, LLC, either as reflected in Invoice 179 dated February 9, 2017, or any changes you contend were agreed to with respect to that order, specify: a. Each expenditure; b. the amount of the expenditure; c. the person(s) or entities to whom the expenditure was made; d. the identity of all documents, including purchase orders, invoices, and cancelled checks, that reflect the expenditure. ECF Nos. 28-1 at 5-6; 28-3 at 6. While Defendants contend that they spent more than $132, 500 to fulfill Plaintiff's order, they provide no information about the actual expenditures. See ECF Nos. 28-1 at 6; 28-3 at 6. Plaintiff is entitled to this information, and the Court directs Defendants to fully respond to Plaintiff's Interrogatory 7 within ten (10) days of this Order.

         D. ...


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