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Appel v. Boston National Title Agency, LLC

United States District Court, S.D. California

July 12, 2019

HOWARD APPEL, et al., Plaintiffs,
v.
BOSTON NATIONAL TITLE AGENCY, LLC, Defendant.

          ORDER (1) DENYING PLAINTIFFS' MOTION FOR REVIEW OF MAGISTRATE JUDGE'S APRIL 30, 2019 ORDER AND (2) CLOSING CASE NO. 18-CV-2617-BAS-MDD

          Hon. Cynthia Bashant, United States District Judge

         On January 14, 2019, Magistrate Judge Dembin issued an order denying Plaintiffs' motion to compel. (ECF No. 30.) Plaintiffs moved for reconsideration of this Order. (ECF No. 57.) Magistrate Judge Dembin denied the motion for reconsideration. (ECF No. 68.) Plaintiffs now appeal this denial of reconsideration. (ECF No. 71.) Defendant opposes (ECF No. 76), and Plaintiffs reply to the opposition, (ECF No. 79).

         The Court finds resolution of this matter is suitable without the need for oral argument. See Civ. L.R. 7.1(d)(1). For the reasons discussed below, the Court DENIES Plaintiffs' Motion for Review of the Magistrate Judge's April 30, 2019 Order.

         I. STATEMENT OF FACTS AND PROCEDURAL HISTORY

         The premise of this case is simple. During an online auction with Concierge Auctions, LLC. (“Concierge”), Plaintiffs had received notice that they had placed the winning bid for property in Fiji. Plaintiffs deposited $285, 000 into an escrow account for the property. When the Fiji property owners refused to sell, Plaintiffs demanded return of their money.

         The procedural history of this case is less simple. Plaintiffs filed a lawsuit against Concierge, which has been stayed over Plaintiffs' objection, pending arbitration. (17-cv-2263-BAS-MDD.) Three weeks after the Concierge case was stayed, Plaintiffs filed this lawsuit against Boston National Title Agency, LLC (“Boston National”) for an accounting, negligence and breach of fiduciary duty, claiming Boston National failed to timely return their escrow deposit. Soon after the lawsuit was filed, Boston National returned the $285, 000 escrow amount to Plaintiffs.

         On August 14, 2018, Plaintiffs propounded requests for production of documents from Boston National, including requests for all documents related to the escrow account into which Plaintiffs deposited their $285, 000. This escrow account, held by Wells Fargo Bank, is a repository of funds from customers of Concierge and Boston National. It was not set up exclusively for the Fiji property auction or for Plaintiffs' transactions. It apparently identified dozens of customers and transactions unrelated to the Fiji auction or to Plaintiffs' deposit of the $285, 0000. Nonetheless, Boston National produced redacted statements from this escrow account, offering to assign unique identifiers to the other customers of Concierge and Boston National, but without identifying the actual customers. Plaintiffs objected.

         On January 14, 2019, Magistrate Judge Dembin denied Plaintiffs' motion to compel Boston National to produce unredacted escrow statements. (ECF No. 30.) On April 8, 2019, Plaintiffs moved to reconsider this order (ECF No. 57), and on April 30, 2019, Judge Dembin denied the motion for reconsideration. (ECF No. 68.) Plaintiffs appeal that order denying reconsideration.

         In the meantime, while the discovery dispute in this case was pending, Plaintiffs propounded subpoenas to both Concierge and Wells Fargo Bank, non-parties in this case, in the Central District of California. Both cases were transferred to this district. (18-cv-2617-BAS-MDD; 18-cv-2433-BAS-MDD.) On February 6, 2019, Magistrate Judge Dembin granted Wells Fargo Bank's motion to quash the request for production of the exact same unredacted escrow statements. (18-cv-2617-BAS-MDD, ECF No. 22.) On May 1, 2019, Plaintiffs moved to reconsider that order. (18-cv-2617-BAS-MDD, ECF No. 34), and on May 22, 2019, Magistrate Judge Dembin denied the motion for reconsideration. (18-cv-2617-BAS-MDD, ECF No. 36.)

         II. STANDARD OF REVIEW

         The district court may reconsider any non-dispositive pretrial ruling of the magistrate judge “where it has been shown that the magistrate judge's order is clearly erroneous or contrary to law.” 28 U.S.C. §636(b); see also Fed. R. Civ. P., 72; Bhan v. NME Hospitals, Inc., 929 F.2d 1404, 1414 (9th Cir. 1991) (holding a magistrate judge's decision on a non-dispositive issue is reviewed by the district court for clear error); Brighton Collectibles, Inc. v. Marc Chantal USA, Inc., No. 06-cv-1584 H(POR), 2008 WL 753956 at *1 (S.D. Cal. Mar. 18, 2008) (“The ‘clearly erroneous' standard applies to the magistrate judge's factual determinations and discretionary decisions [citation omitted] including rulings on discovery disputes where the magistrate judge is afforded broad discretion. [citation omitted].”) Discovery issues are generally non-dispositive. Maisonville v. F2 Am., Inc., 902 F.2d 746, 748 (9th Cir. 1996).

         District courts have broad discretion to determine relevancy for discovery purposes. Hallett v. Morgan, 296 F.3d 732, 751 (9th Cir. 2002). If the burden or expense of the proposed discovery outweighs the likely benefit, a district court may set limits on the discovery. Cascade Yarns, Inc. v. Knitting Fever, Inc., 755 F.3d 55, 59 (1st Cir. 2014). “[A] district court is vested with ‘broad discretion to make discovery and evidentiary rulings conducive to the conduct of a fair and orderly trial.'” Amarel v. Connell, 102 F.3d 1494, 1515 (9th Cir. 1996) (quoting Campbell Indus. v. M/V Gemini, 619 F.2d 24, 27 (9th Cir. 1980)).

         III. ANALYSIS

         In this case, Defendant has provided Plaintiffs with redacted escrow statements showing the amount of money in the account on a daily basis. Defendant has also offered to provide statements, redacting out customer information but providing unique identifying information for each customer, so that Plaintiffs can trace the funds in and out of the escrow account. Plaintiffs argue they need the names of the depositors, depositing account ...


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