[29ASR2d218]
PAGO PETROLEUM PRODUCTS,
INC., Plaintiff
v.
SOO NAM KIM, DONG HEUI
FISHERIES CO., LTD., and YOUNG CAYMAN CO., LTD., Defendants
High Court of
Trial Division
CA No. 39-94
[1] A document
may be under a party's control, even though he does not have a copy in his
possession, if he has a legal right to obtain it.
[2] The
language of T.C.R.C.P. 37 is mandatory--if the court grants the motion to
compel discovery, the court shall award costs and attorneys' fees.
Before
KRUSE, Chief Justice, TAUANU`U, Chief Associate Judge, and ATIULAGI, Associate
Judge
Counsel:
For Plaintiff, Barry
For Defendants, Togiola T.A.
Tulafono
Order
Compelling Discovery and Awarding Attorney's Fees:[29ASR2d219]
I. Introduction
Plaintiff Pago Petroleum Products, Inc.,
("PPP") has moved under Trial Court Rule of Civil Procedure 37 to
compel the defendants to properly respond to PPP's Request for the Production
of Documents, filed with this court
II. DISCUSSION
A. Applicable
Law
Rule 34 of the Trial Court Rules of Civil Procedure
allows a party to serve a request on another party to produce and permit
inspection and copying of any designated documents falling within the scope of
Rule 26. Rule 26, in turn, provides
that:
Parties may obtain discovery
regarding any matter, not privileged, which is relevant to the subject matter
involved in the pending action, whether it relates to the claim or defense of
the party seeking discovery or the claim or defense of any other party,
including the existence, description, nature, custody, condition and location
of any books, documents, or other tangible things and the identity and location
of persons having knowledge of any discoverable matter. It is not ground for objection that the
information sought will be inadmissible at trial if the information sought appears
reasonably calculated to lead to the discovery of admissible evidence.
T.C.R.C.P. 26(b)(1).
Thus, Rule 34 allows a party to make a broad request for document
production, with which the served party must comply unless they have a valid
objection on the grounds of privilege or irrelevance.
Rule 34 requires the party requested to produce
documents to file a written response to that request. T.C.R.C.P. 34(b); see also 8 Wright, Charles A. & Arthur R. Miller,
Federal Practice and Procedure § 2213 at 639 (1970). This response may assert the party's
compliance with the request, may list objections to the request, or may
otherwise list grounds why the production is not possible.
Rule 37 allows a party to bring a motion to compel
production under Rule 34 if the served party fails to respond to the request
for production. Rule 37(a)(3) further
provides that an incomplete or evasive answer can [29ASR2d220] be treated by
the court as a failure to respond. PPP
seeks us to compel discovery under thirteen requests for production made upon
the defendants.
B. Alleged
Failures
PPP's first request asks for the "stock book
maintained by Dong Heui Fisheries, Ltd., including all transfers. If no such book exists, submit a record of
all shareholders, the date shares were acquired, the number of shares held and
any transfers." Pl.'s Req. Produc.
Docs. at 2 [hereinafter Request]. The
defendants respond that the stock books were destroyed in
PPP's second request asks for the same information
about Young Cayman Company ("Young Cayman"). Defendants again respond that no stock book
exists and provide the same incomplete information as they did to PPP's first
request. We will compel discovery on
this point also.
PPP's third and fourth requests are for documents
relating to the incorporation of Dong Heui Fisheries Company ("Dong
Heui") and Young Cayman, respectively.
The defendants apparently do not have copies of these documents in their
possession, but are attempting to get them from
Requests number five and six ask for the tax return
documents filed by the two companies from 1986 to the present. The defendants response to each request is
merely "None." See
Defs.' Resp. Req. Produc. at 2 [hereinafter Response]. This response is
incomplete because it does not indicate whether no tax returns were filed,
whether defendants do not [29ASR2d221] have copies of such documents, or what
else "none" could mean. If
defendants refuse to produce documents, they must provide a clear and precise
explanation why.
[1] Furthermore, Rule 34
provides that a party must produce documents in his "possession, custody or
control." T.C.R.C.P. 34(a)
(emphasis added). A document may be
under a party's control, even though he does not have a copy in his possession,
if he has a legal right to obtain it. See
Wright & Miller, supra,
§ 2210, at 621; 10 Federal
Procedure, L. Ed. § 26:222, at 427 (1982) ("The true test is
control and not possession, the test being whether the party has a legal right
to control or obtain the documents" (footnote omitted). This includes tax returns in the possession
of the government. See Reeves
v. Pennsylvania R.R. Co., 80 F. Supp. 107, 108-09 (D.C.
PPP's seventh request was for the personal income
tax returns of defendant Kim. Defendants
objected on the grounds of irrelevance.
As we stated above, one of PPP's primary arguments is that the corporate
entities involved in this suit were shams, and that the corporate veil should
be pierced to hold Kim personally liable for the corporations' debts. To develop this argument, PPP must be able to
discover how the finances of the corporate defendants were handled and what
assets Mr. Kim received from them. Mr.
Kim's tax returns are directly relevant to this line of inquiry. This is even more true in light of the fact
that the defendants have turned over so little information on the economic
structures of the corporations themselves.
We will compel discovery on this point.
As we noted above, Mr. Kim must produce copies of his tax returns even
if he does not have them in his possession.
Requests number eight, nine and ten ask for copies
of the bank records of Dong Heui, Young Cayman and Kim, respectively, from 1986
to the present. Defendants respond to
the first inquiry by giving the account numbers for the corporation's accounts,
but then stating: "There are no
records available on these accounts with the defendants." See Response at 2. As we stated above, however, the standard is
not whether the defendants have the records with them, but whether they have
control over them. If copies of a
party's bank records are easily obtainable by that party, we consider them to
be under their control. To hold
otherwise would be to punish the diligent record keeper and award the party who
has uncaringly disposed of records.[29ASR2d222]
The defendants respond to the ninth and tenth
requests by again stating merely "None."1 See id. As we stated above, such a response will
almost always be incomplete because it does not give an adequate explanation
why the documents are not being produced.
Surely the defendants do not mean that Young Cayman, a corporation, and
Kim, a successful business man, do not and have not had bank accounts. Such an assertion would be highly incredible,
and certainly could not be adequately supported by the answer
"none." We will compel
discovery of the bank documents for all three defendants.
Requests #11, 12, 13 and 14 ask for various business
records showing transactions and communication between Kim and the corporate
defendants. Primarily, the defendants
respond by again stating that there are "none" of these
documents. See id. These answers are again ambiguous. We cannot compel the production of nonexistent
documents. If that is what defendants
meant--that these documents do not exist, either in or out of their control--we
cannot make them produce them. If,
however, the documents are not in the defendants' possession, but are otherwise
obtainable by them, and thus under their control, they must produce them as
with the tax returns and bank records above.
If the records exist but are not under the defendants' control, they
must indicate where the records are, who controls them, and why the defendants
cannot easily gain control of them.
Additionally, if PPP discovers that the defendants have acted
fraudulently or in bad faith, it can bring a contempt motion. Thus, production will be compelled on these
points to the extent that the defendants have control (or reasonable access) to
the documents requested.
C. Award of
Costs and Attorneys' Fees
[2] Rule 37
provides that
[i]f the motion [to compel
discovery] is granted, the court shall . . . require the party . . .
whose conduct necessitated the motion or the party or attorney advising such
conduct or both of them to pay to the moving party the reasonable expenses
incurred in obtaining the order, including attorney's fees, unless the court
finds that the opposition to the motion was substantially justified or that
other circumstances make an award of expenses unjust.[29ASR2d223]
T.C.R.C.P. 34(a)(4) (emphasis added). The language of the Rule is mandatory--if we
grant the motion, we "shall" award costs and attorneys' fees.
We have granted PPP's motion, almost in its
entirety. There is certainly nothing in
the defendants incomplete answers which leads us to believe that their
opposition to discovery was substantially justified. Nor have they filed any other document
claiming such. Thus, we award PPP its
reasonable costs in filing this motion, including attorneys' fees.
It is difficult to tell whether the defendants or
their attorney is primarily at fault. If
the request was treated as many such requests are, the attorney probably played
a large part in the preparation of their response.2 Still, the defendants themselves have failed
to obtain copies of a number of requested documents over which they have
control. Therefore, one half of PPP's
costs shall be paid by the defendants and one half shall be paid by their
attorney.
III. CONCLUSION
PPP's motion to compel the production of documents
is granted to the extent stated above.
Furthermore, the defendants and their attorney are ordered to pay PPP's
reasonable costs in obtaining this order, including attorneys' fees.
It is so ordered.
1 Defendants have not objected to the production of Kim's bank records as irrelevant, as they did with his tax returns. Nevertheless, his bank records are relevant for the same reasons as his tax returns.
2 Our suspicion that the attorney aided in preparing the response is bolstered by the fact that the attorney himself answered and signed a later set of interrogatories directed to the defendants, although this is improper conduct. See T.C.R.C.P. 33 ("Any party may serve . . . written interrogatories to be answered by the party served . . . ." (emphasis added)); see also Wright & Miller, supra, § 2172, at 535 & n.29 ("Interrogatories . . . must be answered by that party. It is improper for his attorney to answer them . . . ." (footnote omitted)). The interrogatory is not in issue under this motion, however.