Adams v Island Homes Construction Inc [2002] FMSC 13; 10 FSM Intrm. 611 (Pon. 2002) (22 April 2002)

FEDERATED STATES OF MICRONESIA
SUPREME COURT TRIAL DIVISION

Cite as Adams v. Island Homes Constr., Inc.,
[2002] FMSC 13; 10 FSM Intrm. 611 (Pon. 2002)

[2002] FMSC 13; [10 FSM Intrm. 611]

YVETTE ETSCHEIT ADAMS, d/b/a POHNPEI ACE
HARDWARE, and ADAMS BROTHERS
CORPORATION,
Plaintiffs,

vs.

ISLAND HOMES CONSTRUCTION, INC., FSM
DEVELOPMENT BANK, and PAULUS PERMAN,
Defendants.

CIVIL ACTION NO. 2000-012

ORDER AND MEMORANDUM

Martin Yinug
Associate Justice

Decided: April 22, 2002

APPEARANCES:

For the Plaintiffs:
Craig D. Reffner, Esq.
Law Office of Fredrick L. Ramp
P.O. Box 1480
Kolonia, Pohnpei FM 96941

[10 FSM Intrm. 612]

For the Defendant (Island Homes):
Saloman Saimon, Esq.
Law Offices of Saimon & Associates
P.O. Box 1450
Kolonia, Pohnpei FM 96941

For the Defendant (FSM Dev. Bank):
James Woodruff, Esq.
P.O. Box M
Kolonia, Pohnpei FM 96941

For the Defendant (Perman):
Matt Mix, Esq.
P.O. Box 143
Kolonia, Pohnpei FM 96941

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HEADNOTES

Civil Procedure - Discovery
If a defendant has already produced the documents requested by subpoena, then nothing remains to be done by the defendant other than to advise the plaintiffs of that fact because such an action is de minimis and requires no relief. Adams v. Island Homes Constr., Inc., [2002] FMSC 13; 10 FSM Intrm. 611, 613 (Pon. 2002).

Civil Procedure - Discovery
A duty to supplement discovery responses may be imposed at any time prior to trial through new requests for supplementation of prior responses. Adams v. Island Homes Constr., Inc., [2002] FMSC 13; 10 FSM Intrm. 611, 613 (Pon. 2002).

Civil Procedure - Discovery
Subpoenas under Rule 45 may be issued to parties or non-parties, although Rule 34 is used for production of documents, etc., from parties. Adams v. Island Homes Constr., Inc., [2002] FMSC 13; 10 FSM Intrm. 611, 613 n.1 (Pon. 2002).

Civil Procedure - Discovery
When, if the court quashed the plaintiffs' subpoena and directed them to reform the request made by subpoena through a supplementary request for production under Rule 26(e)(3), the end result would be the same as if the subpoena were left in place, and when the balance of the discovery equities weigh against the defendant, the subpoena will not be quashed. But that should not be construed to the effect that a subpoena is generally a substitute for a supplementation request because this denial is based on the equitable considerations generated by the defendant's conduct. Adams v. Island Homes Constr., Inc., [2002] FMSC 13; 10 FSM Intrm. 611, 614 & n.3 (Pon. 2002).

Business Organizations - Corporations
The alter ego doctrine treats two entities that are nominally separate as the same where one corporation has acted unjustly or fraudulently. Specific factors which are determinative on this point include substantially identical management, business purpose, operation, equipment, customers, supervision, and ownership. Adams v. Island Homes Constr., Inc., [2002] FMSC 13; 10 FSM Intrm. 611, 614 (Pon. 2002).

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[10 FSM Intrm. 613]

COURT'S OPINION

MARTIN YINUG, Associate Justice:

On April 4, 2002, the defendant FSM Development Bank ("the Bank") filed a motion to quash a subpoena duces tecum that was issued as part of a revised notice of deposition directed as follows: "TO: Peter Aldis and Federated States of Micronesia Development Bank as represented by Peter Aldis per designation of counsel." The Bank claims that the plaintiffs improperly served a subpoena on it because it is a party, and a subpoena is third-party directed discovery device. It also points out that the documents sought under the subpoena were included in a prior document production request directed to it by the plaintiffs. The Bank notes that the "current Rule 45 subpoena request and the previous Rule 34 request are duplicative, with the Rule 34 request actually being more expansive." Motion to Quash Subpoena at 2 (Apr. 4, 2002). The Bank states that it has already responded to the document production request.

At page 2 of the subpoena directed to Mr. Aldis is the following: "Any documents previously produced by the FSM Development Bank in the above-captioned matter need not be produced." This is in apparent reference to the plaintiffs' prior Rule 34 production request to which the Bank responded in December of 2001. If the Bank's representation that it has already produced the requested documents is correct, then nothing remains to be done by the Bank other than to advise the plaintiffs of that fact. Such an action is de minimis and requires no relief. De minimis non curat lex. "The law does not . . . totice .160;. .160;. trifling matters.CK'LACK'S LAW DICTIONARY 431 (6th ed. 1990). As to any documents that may have come into Mr. Aldis' possession since the Bank's December, 2001, rse, R6(e)( germane. Ite. It provides in pertinent part that "[a] "[a] duty duty to supplement responses may be imposed . . . at any time pto trial thrl through new requests for supplementation of prior responses." Since the original production request was even "morensiven the documents requested by the subpoena, a request to supplement under Rule 26(e 26(e)(3)e)(3) would necessarily include those sought under the subpoena. Since the plaintiffs may do by the express provision of Rule 26(e)(3) what they seek to do by subpoena under Rule 45 of the FSM Rules of Civil Procedure, the Bank's objection is a technical one.

It is not apparent why the plaintiffs seek any documents that have come into Mr. Aldis' possession since December of 2001 by subpoena,^[1] and not by the foregoing provision of Rule 26 as it applies to document production under Rule 34. On the other hand, it is fair to say that the Bank has been responsible for substantial unnecessary discovery activity in this case. As the court noted at some length in its November 27, 2001, order in this case [Adams v. Island Homes Constr., Inc., [2001] FMSC 40; 10 FSM Intrm. 466, 470-73 (Pon. 2001)], the Bank attempted to evade the plaintiffs' discovery of information that is highly relevant to any rational observer. The Bank's resistance to plaintiffs' discovery efforts in that instance established a prima facie case for Rule 11 sanctions, which the court will address at the time of trial.^[2] After its failed effort to resist plaintiffs' discovery, the Bank objected to plaintiffs' responses to a July, 2002, notice of deposition/document production request more than a year and a half after the deposition had been taken, and the documents sought had been produced. That attempt implicated the equitable doctrine of waiver, on which basis the court denied the motion.

[10 FSM Intrm. 614]

Adams v. Island Homes Constr., Inc., [2002] FMSC 7; 10 FSM Intrm. 510 (Pon. 2002).

While the court could quash the subpoena and direct the plaintiffs to proceed under Rule 26(e)(3), the court is reluctant to require the plaintiffs to reform the request that they have made by subpoena through a supplementary request under Rule 26(e)(3). The end result would be the same as it would if the subpoena is left in place, and to this extent the court is disinclined to add to the unnecessary discovery activity that has accumulated through the Bank's ill-advised discovery efforts. The balance of the discovery equities weigh against the Bank. The motion to quash the subpoena is denied. The Bank is ordered to comply with it.^[3]

The defendants' motion to bifurcate the trial in this case as to liability and damages is denied, since it would require two separate trips to Pohnpei by the court. The parties indicate that each aspect of the trial will likely take one day. If the trial is bifurcated and time elapses between the two portions of the trial, as it inevitably would, the second installment would probably repeat information from the first part. There appears to be no reason why the court could not rule on the question of liability in sufficient time so that the damages portion of the trial, in the event that liability is found, could proceed on a day during the court's same sitting in Pohnpei, which is to say on the next day, or within two days following the trial on liability. For preparation purposes, the parties should be prepared to proceed as if the trial were not to be heard in a bifurcated manner.

All discovery in this case will be completed - i.e., both propounded and answered, or depositions taken - no later than July 1, 2002, with all pretrial motions to be filed no later than August 5, 2002.

The plaintiffs' motion to correct caption filed on March 14, 2002, is granted. Accordingly, that portion of the order entered on February 21, 2002 - the last three lines - which erroneously changed the party designation from "Adams Brothers Corporation" to "Adams Brothers Construction, Inc.," is vacated, and the designation "Adams Brothers Corporation" is restored. The caption of this order reflects the change with all future filings, orders, and others documents to be conformed accordingly.

Finally, the court notes that it takes no action on the Bank's motion to compel which was filed on March 6, 2002, and withdrawn on April 19, 2002. However, the court makes the following observation in the hope that it will promote some degree of efficiency with respect to discovery in this case. Without citing any applicable law, or using the words "alter ego," the Bank attempted to discover documents generated by an entity known as ABCOR Engineering and Consulting, Inc., ("Abcor") from the plaintiff Adams Brothers Corporation ("Adams Brothers") on an alter ego theory. The alter ego doctrine treats two entities that are nominally separate as the same where one corporation has acted unjustly or fraudulently. Chicago Dist. Council of Carpenters Pension Fund v. P.M.Q.T., Inc., 169 F.R.D. 336, 341 (N.D. Ill. 1996). Specific factors which are determinative on this point include substantially identical management, business purpose, operation, equipment, customers, supervision, and ownership. Id. at 342. Whether or not Abcor is the alter ego of the Adams Brothers is not one of the substantive issues in this case. In any case such an inquiry is highly fact intensive, and the Bank's attempt to create this as a collateral issue served no point. Through Rule 45 of the FSM Rules of Civil Procedure, the Bank had a plain remedy by which to obtain Abcor documents directly from Abcor.

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^[1] As Prof. Moore notes, "[s]ubpoenas under Rule 45 may be issued to parties or non-parties, although . . . Rule 34 [is used]pfor ctiduction of documents, etc., from parties." 9 JAMES WM. MOORE ET AL., MOORE'S FEDERAL PRACTICE § 45.03[1] (3d e99).

^[2] The court will also address ress issueissues arising under Rule 37(a)(4) of the ules of Civil Procedure at trial.

^[3]/sup> Nothing in this memorandum should be construed to the effect that a subpoena is generally a substitute for a request for supplementation. As expressly stated, the denial of the quashing of the subpoena is based in material part on the equitable considerations generated by the Bank's conduct.