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Omni Home Financing, Inc. v. Hartford Life and Annuity Insurance Co.

January 7, 2008


The opinion of the court was delivered by: Jan M. Adler U.S. Magistrate Judge


Defendants Hartford Life and Annuity Insurance Company ("Hartford") and Paul Bannock ("Bannock") (hereinafter collectively "Defendants") have filed a letter brief in support of their motion for an order compelling the depositions of attorneys Kenneth Bonus and Robert Butterfield. Plaintiffs Omni Home Financing, Inc. ("Omni"), Omni Home Financing, Inc. 412(i) Defined Benefit Plan ("Plan"), Keith Murphy ("Murphy"), Anthony A. Gaglione and David A. Bancroft (hereinafter collectively "Plaintiffs") oppose. For the reasons set forth below, the Court DENIES Defendants' motion.


On November 7, 2007, counsel for Defendants, Jessica Taylor, Esq., deposed Plaintiff Murphy as an individual and as the corporate representative for Omni. Defs.' Letter Br. at 1. During his deposition, Mr. Murphy testified about legal advice obtained by Plaintiffs from Kenneth Bonus ("Bonus"), an attorney, in connection with the subject Plan. Id. at 1-2; Murphy Dep., attached as Ex. 1 to Taylor Decl. ("Murphy Dep."), 65:6-66:24. Mr. Murphy testified that Mr. Bonus had advised Plaintiffs to terminate the Plan and had helped Plaintiffs with the termination process. Murphy Dep., 65:16-66:24. Mr. Murphy also testified that attorney Robert Butterfield ("Butterfield") had provided advice to Plaintiffs regarding an audit conducted by the Internal Revenue Service ("IRS"), without discussing the nature of any such advice. Id., 191:6-15.*fn1 Mr. Murphy further testified that Mr. Bonus and/or Mr. Butterfield had not discussed the possibility of Plaintiffs working with Defendant Hartford to convert the whole life policies at issue in this case to different types of policies, instead of allowing the whole life policies to lapse. Id., 202:14-24.

On or about November 9, 2007, Defendants issued deposition notices and subpoenas for the depositions of Bonus and Butterfield, which were scheduled to be held on November 27, 2007. Taylor Decl., Ex. 4. After various communications between Plaintiffs' and Defendants' counsel, the depositions were rescheduled for November 28 and 29, 2007. Defs.' Letter Br. at 5; Taylor Decl., Exs. 5-9. On November 27, 2007, counsel for Mr. Butterfield, Daniel Levinson, Esq., sent a letter to Defendants' counsel advising that Mr. Butterfield would not appear for his deposition absent a court order. Taylor Decl., Ex. 10. Robert Plumb, Esq., counsel for Mr. Bonus, orally indicated the same. Taylor Decl., ¶ 19.

Plaintiffs currently object to the taking of the depositions of Bonus and Butterfield on relevance and attorney-client privilege grounds. With regard to relevance, Defendants contend that the legal advice obtained by Plaintiffs from Bonus and Butterfield in connection with the subject Plan is relevant to Plaintiffs' damages claims, and is thus discoverable. Specifically, Defendants argue that they are entitled to know (1) if Plaintiffs considered mitigating their damages by, for example, "converting to other policies to preserve the cash value of their policies rather than letting them lapse and losing all of their contributions", (2) whether Plaintiffs are seeking to minimize the amount of money they will owe the IRS, and (3) whether Plaintiffs have made any argument to the IRS about the legitimacy of the Plan that is inconsistent with the claims of alleged defects in the Plan made in this lawsuit. Defs.' Br. at 2. Defendants further argue, with regard to Plaintiffs' assertion of the attorney-client privilege, that Plaintiffs have waived the privilege in various ways. Id. at 2-6.


A. Relevance

Rule 26 of the Federal Rules of Civil Procedure permits discovery regarding "any non-privileged matter that is relevant to any party's claim or defense." Fed. R. Civ. P. 26(b)(1). Relevant information need not be admissible at trial so long as the discovery appears reasonably calculated to lead to the discovery of admissible evidence. Id. All discovery is subject to the limitations imposed by Rule 26(b)(2)(C), which provides in relevant part:

On motion or on its own, the court must limit the frequency or extent of discovery otherwise allowed by these rules or by local rule if it determines that:

(i) the discovery sought is unreasonably cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive;

(ii) the party seeking discovery has had ample opportunity to obtain the information by discovery in the action; or

(iii) the burden or expense of the proposed discovery outweighs its likely benefit, considering the needs of the case, the amount in controversy, the parties' resources, the importance of the issues at stake in the action, and the importance of the discovery in resolving the issues.

Fed. R. Civ. P. 26(b)(2)(C). It is within the authority of the court to define the actual scope of discovery to the reasonable needs of the action. Fed. R. Civ. P. ...

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