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Wischermann Partners, Inc. v. Nashville Hospitality Capital LLC

United States District Court, M.D. Tennessee, Nashville

September 16, 2019

WISCHERMANN PARTNERS, INC., et al.
v.
NASHVILLE HOSPITALITY CAPITAL LLC
v.
PAUL WISCHERMANN

          Campbell, Judge.

          ORDER

          BARBARA D. HOLMES, UNITED STATES MAGISTRATE JUDGE.

         In accordance with the Court's procedures for resolution of discovery disputes, the parties have brought to the Court's attention the contested issues described in the Joint Discovery Dispute Statement filed on September 11, 2019. (See Docket No. 181).[1] A telephonic discovery conference was held on September 13, 2019. Counsel participating were: Buckley Cole and Carson King for Plaintiffs Wischermann Partners, Inc. and Wischermann Hospitality Employer LLC (“Plaintiffs”); Peter Klett and Stuart Scott for Counter-Defendant Paul Wischermann (collectively with Plaintiffs, the “Wischermann Parties”); and Overton Thompson for Defendant Nashville Hospitality Capital, LLC (“Defendant” or “NHC”). From the parties' joint statement and discussion during the discovery conference, and for the reasons discussed below, the Court ORDERS that Defendant must supplement its prior discovery responses to produce monthly executive summary and business review reports and STR Reports for November 2017 through April 2018, if not already provided.[2] These documents must be produced by no later than September 23, 2019. Plaintiffs may use the supplemental information for impeachment of witnesses or other permitted purposes at trial, but no further discovery will be allowed regardless of the information contained in the supplemental reports.[3] No. other supplemental document production will be required.

         I. Background

         This case has a somewhat lengthy and convoluted procedural history. The Court will detail only what is necessary for understanding its decision in resolution of the pending discovery dispute. Plaintiffs seek to require Defendant to supplement its discovery responses to: (i) produce monthly executive summary and business review reports and monthly Smith Travel Research (“STR”) reports for November 2017 through the present; (ii) provide any amendments to the hotel management agreement between NHC and Castlerock Hospitality Management, LLC concerning the Westin; and (iii) confirm that there are no documents responsive to Plaintiffs' request for communications between NHC and Marriott/Starwood discussing the Joseph Nashville hotel.

         The relevant facts are undisputed. The period for completion of fact discovery expired on September 18, 2018. (Docket No. 63). The deadline for discovery-related motion was September 25, 2018. (Id.). In discovery, Plaintiffs requested, in Request for Production No. 2 (“RFP 2”), that Defendant “[p]roduce all documents concerning the performance of the Hotel in terms of customer satisfaction, financial performances, employee turnover, occupancy rates and room rates.” (Docket No. 181-1 at 32). Defendant objected on various grounds but agreed to (and did) produce responsive documents “for the period of October 2016 (the hotel opening) through October 2017.” (Id.). The produced documents included, among other things, monthly executive summary and business review reports and industry-wide STR reports from October 2016 through October 2017. (Id. and Docket No. 181 at 7).

         Plaintiffs' Request for Production No. 7 (“RFP 7”) sought production of “all contracts between NHC and Castlerock Hospitality Management LLC related to the Hotel.” (Docket No. 181-1 at 33). Defendant produced the hotel management agreement, with reservation of its relevancy objection. (Id.). In Request for Production No. 13 (“RFP 13”), Plaintiffs requested that Defendant “[p]roduce all documents regarding communications between NHC and the Marriott regarding The Joseph.” (Id. at 34). Defendant again raised various objections but agreed to produce any responsive documents. (Id.).[4]

         On October 8, 2018, Defendant provided Plaintiffs with the expert report of Charles Pinkowski. (See Docket No. 136-3). In his expert report, Mr. Pinkowski utilized information from executive summary and business reports and STR reports through April 2018. (Id. at 41-42). Although not entirely clear, it appears that at least the April 2018 reports were provided as part of Defendant's expert disclosures.

         On February 19, 2019, Plaintiffs filed a motion to exclude Mr. Pinkowski's expert testimony under Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). (See Docket No. 136).[5] Plaintiffs' motion was denied. (See Docket No. 178).

         On August 14, 2019, Plaintiffs raised, for the first time, that Defendant had not complied with its obligations to supplement discovery responses by providing information for periods that coincide with information relied upon by Defendant's expert. (Docket No. 181-1 at 2-3). Among the supplemental discovery responses requested by Plaintiffs were those for which Plaintiffs now seek the Court's assistance in compelling production.[6] On August 23, 2019, Defendant responded by stating that it had complied with its discovery obligations and considered Plaintiffs' supplementation requests to be an improper attempt to serve new discovery requests long after the discovery period had expired. (Id. at 25-26). Defendant further stated that Plaintiffs had not timely raised any issues about the sufficiency of Defendant's discovery responses, including the limited temporal scope. (Id.). After attempts to resolve the issues, the parties requested judicial intervention in resolution of the dispute.

         II. Legal Principles and Discussion

         It is axiomatic that the Court has broad discretion in determining the proper scope of discovery. Chrysler Corp. v. Fedders Corp., 643 F.2d 1229, 1240 (6th Cir. 1981); Naartex Consulting Corp. v. Watt, 722 F.2d 779, 788 (D.C. Cir. 1983); Grae v. Corrections Corporation of America, 2019 WL 1746492, at *1 (M.D. Tenn. April 18, 2019). The dispute in this case implicates two countervailing tenets of acceptable discovery practices: a responding party's duty to supplement its discovery responses and a receiving party's obligation to timely move to compel discovery.

         More than 70 years ago, the United States Supreme Court explained the core goals of the discovery rules contained in the Federal Rules of Civil Procedure:

The pre-trial deposition-discovery mechanism established by Rules 26 to 37 is one of the most significant innovations of the Federal Rules of Civil Procedure. Under the prior federal practice, the pre-trial functions of notice-giving issue-formulation and fact-revelation were performed primarily and inadequately by the pleadings. Inquiry into the issues and the facts before trial was narrowly confined and was often cumbersome in method. The new rules, however, restrict the pleadings to the task of general notice-giving and invest the deposition-discovery process with a vital role in the preparation for trial. The various instruments of discovery now serve (1) as a device, along with the pre-trial hearing under Rule 16, to narrow and clarify the basic issues between the parties, and (2) as a device for ascertaining the facts, or information as to the existence or whereabouts of facts, relative to those issues. Thus, ...

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