Free Motion for Protective Order - District Court of Colorado - Colorado

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 03-CV-02504-REB-CBS PETER HORNICK, an individual, Plaintiff, vs. GARY BOYCE, and JOANNE BOYCE, individuals Defendants/Counterclaimants _____________________________________________________________________ DEFENDANTS' FED R. CIV. P. 26 (c) MOTION FOR PROTECTIVE ORDER STRIKING DEBTOR INTERROGATORIES ______________________________________________________________________ Defendants Gary and Joanne Boyce (the "Boyces") hereby move the Court for a Protective Order pursuant to Fed. R. Civ. P 26(a) striking the Rule 69 interrogatories served by Plaintiff Peter Hornick ("Hornick"). In support of this Motion, the Boyces advise the Court as follows: CERTIFICATION OF CONFERENCE In accordance with Fed. R. Civ. P. 26(c), and D.C. COLO.LCivR 7.1 (A), the undersigned hereby certifies that his partners, Scott Hyman and John Lubitz, have conferred with counsel for Plaintiff, Peter Hornick in good faith and that the parties were unable to resolve the instant discovery dispute. The undersigned further advises the Court that Mr. Hornick opposes the relief requested herein.

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PROCEDURAL BACKGROUND 1. On September 6, 2006, this Court entered a judgment (the "Judgment") in

this matter in favor of Hornick in the amount of $3.5 million, plus pre- and post-judgment interest. 2. On September 8, 2006, Hornick filed the Judgment in the District Court for

Saguache County, Colorado, pursuant to Colorado's Uniform Enforcement of Foreign Judgments Act, C.R.S. § 13-53-101, et seq, and commenced a miscellaneous action (the "Miscellaneous Action") for the purpose of pursuing execution proceedings under state law. On September 11, 2006, Hornick recorded the judgment with the Saguache County Recorder, thereby perfecting a judgment lien in all real property then owned (or subsequently acquired) by the Boyces in Saguache County. See C.R.S. § 13-52-102 (West 2006). 3. On September 18, 2006, the Boyces filed with this Court a timely Motion

to Alter or Amend Findings (the "Motion to Amend") seeking to modify the Judgment pursuant to Fed. R. Civ. P. 52(b) and a Forthwith Motion to Stay Judgment Pending Determination of Post Trial Motions (the "Motion to Stay"). briefed and are awaiting decision. 4. On September 22, 2006, the Boyces filed an Emergency Motion To Stay
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These motions are fully

Enforcement Of Foreign Judgment Pursuant To C.R.S.§ 13-53-105

(the "§ 13-53-105

Pursuant to C.R.S. §13-53-105, a Colorado state court is required to stay the execution of a foreign judgment when: (i) the judgment debtor shows the court that an appeal from the foreign judgment is pending or will be taken; or (ii) when the judgment debtor shows the court any grounds upon which enforcement of a judgment from a Colorado court would be stayed. C.R.S. §13-53-105 (1) and (2) (West 2006). 2

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Motion") in the Miscellaneous Action. On September 25, 2006, District Judge Kuenhold held a telephonic hearing at which he orally granted the § 13-53-105 Motion and stayed execution of the judgment until 30 days following the date that this Court determines the Boyces' Motion to Alter or Amend Findings. On September 27, 2006, District Judge Kuenhold entered a written Order confirming his oral ruling. 5. On September 27, 2006, Hornick filed a Motion for Clarification or Hornick's motion

Amendment of Order Granting Stay in the Miscellaneous Action.

sought to shorten the duration of the stay entered by Judge Kuenhold and to carve out C.R.C.P. 69 interrogatories from the scope of such stay. To date, Judge Kuenhold has not ruled upon Hornick's motion and the September 27, 2006, Order remains in full force and effect. 6. On Friday afternoon, September 29, 2006, counsel for Hornick faxed the

Boyces' counsel, John Lubitz, two sets of Interrogatories to Judgment Debtor Pursuant to Rule 69, F.R.C.P (the "Interrogatories") and requested that Mr. Lubitz accept service on behalf of the Boyces. See Exhibit A. However, the waiver and acceptance of

service prepared by Hornick's counsel was defective and, therefore, Mr. Lubitz could not sign it.2 7. On October 3, 2006, Mr. Lubitz executed a corrected Acceptance of

Service ­ Attorney for Client thereby accepting service of the Interrogatories on the Boyces' behalf as of that date. See Exhibit B. The Acceptance of Service ­ Attorney

The Acceptance of Service ­ Attorney for Client attached to the Interrogatories had the wrong case caption and specified that the interrogatories were being served under C.R.C.P. 69 and not Fed. R. Civ. P. 69. 3

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for Client expressly reserved and preserved any and all objections that the Boyces may have to the Interrogatories. 8. Pursuant to C.R.C.P. 6(a) and (e), the Boyces' responses to the

Interrogatories are due on October 27, 2006. ARGUMENT Rule 26(c) authorizes the Court, upon a showing of good cause, to enter any protective order "which justice requires to protect a party or person from annoyance, harassment, oppression, or undue burden or expense." Fed. R. Civ. P. 26(c)(West 2006); see also Gillard v. Boulder Valley Sch. Dist. RE-2, 196 F.R.D. 382, 387 (D. Colo. 2000) (quoting Seattle Times v. Reinehart, 467 US 20, 34-36 (1984)(abusive discovery tactics that may be addressed under Rule 26(c) include discovery which "may seriously implicate the privacy interests of litigants and third parties")). The Court has broad discretion in fashioning a protective order under Rule 26(c). Gillard, 196 F.R.D. at 387. When evaluating "good cause," the Court should balance the party's need for the information against the injury that might result from unrestricted disclosure. Exum v. United States Olympic Comm., 209 F.R.D. 201, 206 (D. Colo. 2002). Here, good cause exists for the court to strike the Interrogatories because they are fatally deficient in two respects. First, as Hornick is generally permitted to do, he elected to utilize Colorado state law procedure when he served the Interrogatories. See Fed. R. Civ. P. 69(a) (West 2006); Natural Gas Pipeline of America v. Energy Gathering, Inc., 2 F.3d 1397, 1403 (5th Cir. 1993)(post-judgment discovery may follow

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federal pre-trial discovery or applicable state discovery law).3 However, Colorado state procedure does not permit a judgment creditor to serve interrogatories until a judgment is "final." C.R.C.P. 69(d)(West 2006). Under Colorado state law, the Judgment is not a "final" judgment because the Motion to Amend is presently pending before this Court. See C.R.C.P. 59(k)(West 2006) and C.A.R. 4(a) (West 2006). See also Jouflas v. Hampton, 527 P.2d 1191, 1192 (Colo. App. 1974)(an order denying a post-trial motion renders the judgment to which it relates final). Accordingly, Mr. Hornick's attempt to utilize Colorado state law procedure is premature. Second, the Interrogatories violated the Fed. R. Civ. P. 62(f) stay that arose as a result of the stay entered by Judge Kuenhold in the Miscellaneous Action. As discussed more fully in the Boyces' Reply Brief in support of the Motion to Stay, Fed. R. Civ. P. 62(f) stays federal supplementary proceedings to enforce a judgment when: (1) the judgment results in a lien on the property of the judgment debtor, and (2) the judgment debtor is entitled to a stay under state law. Fed. R. Civ. P. 62(f) (West 2006); Wilmer v. Board of County Comm. Of Leavenworth County, Kansas, 844 F.Supp 1414, 1418 (D. Kans. 1993). A formal motion for a stay is not required under Rule 62(f) and the stay is effective even in absence of such a motion. Whitehead v. Food Max of Mississippi, Inc., 332 F.3d 796, 804-05 (5th Cir. 2003)(no requirement for a formal motion to grant Rule

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Consistent with C.R.C.P. 69(d), the Interrogatories require the Boyces' response to be verified before the Clerk of the Court within 20 days following service. Had Hornick served the Interrogatories under federal procedure (i.e. Fed. R. Civ. P. 33) the Boyces' responses would be due 30 days after service and would not have to be verified before the Clerk of the Court. 5

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62(f) stay; if sanctions are appropriate because a prevailing party violated stay, the absence of a Rule 62(f) motion does not prevent imposition). Both elements are satisfied here. With respect to the first element, when

deciding whether a judgment creates a lien in property, courts generally look to how much effort is required by the judgment creditor to effectuate a lien. FDIC v. Ann-High Assoc., 1997 WL 1877195, *3 (2nd Cir. 1997). Under Colorado law, a judgment creates a lien on real property when a transcript is filed with the county recorder. C.R.S. § 1352-102 (West 2006). Although no court in this district has addressed the issue, other federal courts have held that statutes that merely require the recording of a judgment satisfy the requirements of Rule 62(f). See e.g. Hoban v. Washington Metro. Area Transit Auth., 841 D.2d 1157, 1159 (D.C. Cir. 1988); Smith v. Village of Maywood, 1991 WL 277629, *1 (N.D. Ill 1991); Johnson v. Spencer Press of Maine, Inc., 341 B.R. 835, 842-43 (Bank. D. ME 2003). With respect to the second element, there is no question that the Boyces are entitled to a stay under state law because Judge Kuenhold has already entered such a stay pursuant to C.R.S. §13-53-105. This stay barred all subsequent supplementary proceedings to enforce Mr. Hornick's judgment under Fed.R.Civ.P. 69(a). Cf. Ribbens v. Int'l. S.A. de CV v Transp. Int'l. Pool, Inc., 40 F.Supp.2d 1141, 1145 (C.D. Cal. 1999) (Fed. R. Civ. P. 62 stay does not retroactively stay antecedent supplementary proceedings); Laborers Nat'l Pension Fund v. ANB Inv. Mgmt. and Trust Co., 26 F.Supp.2d 1048, 1051 (N.D. Ill. 1998)(same); Phansalkar v. Anderson Weinroth & Co., L.P., (S.D.N.Y. 2002) (same). See also Ascher v. Gutierrez. 66 F.R.D. 548, 549 (D.D.C 1975)(Fed. R. Civ. P. 62 stay retroactively

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stayed antecedent supplementary proceedings). Accordingly, because Mr. Hornick served the Interrogatories after Judge Kuenhold entered a stay in the Miscellaneous Action, he violated the Rule 62(f) stay.4 Its is clear that Hornick's over-zealous efforts to execute upon his judgment are intended purely to annoy and harass the Boyces. As Judge Kuenhold has previously found, the judgment lien that Hornick has perfected in the Boyces' real property provides him with adequate security to guarantee payment of his judgment until the Court sets a formal supersedeas bond under Rule 62(d). See Exhibit C to Boyces' Reply to Response to Motion in Support of Forthwith Motion to Stay Judgment Pending Termination of Post Trial Motions, Docket # 127. At this stage in the proceedings, he simply has no legitimate need to conduct asset discovery on the Boyces, particularly when doing so is inconsistent with the state law procedure that he seeks to employ and in violation of the Fed. R. 62(f) stay. Accordingly, for the reasons set forth above, good cause exists for the Court to enter a protective order striking the Interrogatories. Conclusion WHEREFORE, the Boyces respectfully request that the Court enter a Protective Order pursuant to Fed. R. Civ. P. 26(c) [proposed Order submitted herewith] striking the Interrogatories.

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This is not the first time that Hornick has disregarded a stay of execution. As the Court is aware, Hornick previously served Rule 69 interrogatories and writs of execution in violation of the Rule 62(a) automatic stay. As a result, the Boyces were required to file a Motion for Contempt, which motion was withdrawn after Hornick voluntarily terminated his premature execution efforts. See Docket Entry No.'s 119 and 120. 7

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Dated: October 24, 2006. Respectfully submitted,

Allan L. Hale______________________ Allan L. Hale HALE FRIESEN, LLP 1430 Wynkoop Street, Suite 300 Denver, Colorado 80202-6171 (720) 904-6000 Attorneys for Defendants/Counterclaimants

CERTIFICATE OF SERVICE I hereby certify that on this 24th day of October 2006, I caused a true and correct copy of the foregoing DEFENDANTS' FED R. CIV. P. 26 (c) MOTION FOR PROTECTIVE ORDER STRIKING DEBTOR INTERROGATORIES to be served electronically via CM/ECF System, addressed to:

Erich Schwiesow, Esq. Helen Sigmond, Esq. 311 San Juan Avenue P.O. Box 1270 Alamosa, CO 81101-7195

____/s/ Ann Grossmann_________________

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