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Giebink v. Giebink

May 12, 2009

JAMES C. GIEBINK, JAMES E.F. GIEBINK, AND ARIANNA GIEBINK, PLAINTIFFS,
v.
JOAN C. GIEBINK, GIEBINK, LLC, AND GIEBINK CHILDREN, LLC, DEFENDANTS.



The opinion of the court was delivered by: Veronica L. Duffy United States Magistrate Judge

ORDER GRANTING PLAINTIFFS' MOTION TO COMPEL

INTRODUCTION

This case is before the court on plaintiffs' complaint asserting diversity of citizenship between the parties and an amount in controversy in excess of $75,000 as the basis for this court's jurisdiction. Plaintiffs have filed a motion seeking an order compelling defendant Joan Giebink to produce certain documents.*fn1 Joan opposes this motion. The district court, the Honorable Karen E. Schreier, Chief Judge, referred this motion to this magistrate judge for determination pursuant to 28 U.S.C. § 636(b)(1(A). See Docket 26.

FACTS

The facts pertinent to the pending motion are as follows. Plaintiffs James C. Giebink, James E.F. Giebink, and Arianna Giebink filed a complaint with this court on November 19, 2008, against Joan Giebink. Joan Giebink is the trustee for five trusts established for Mary E. Giebink, Robert R. Giebink, and the children and grandchildren of Robert R. Giebink (hereinafter collectively "the trusts"). Plaintiffs are beneficiaries under some of those trusts.

Robert R. Giebink died on January 27, 2008. Plaintiffs allege in their complaint that Joan Giebink has refused plaintiffs' requests for documentation of the governing instruments of the trusts, an accounting, and financial information regarding the trust assets and transactions that have occurred in the trusts since their creation. Based upon this refusal of Joan Giebink to provide the requested information, plaintiffs assert a claim of breach of fiduciary duty as well as breach of statutory duties imposed by South Dakota state law. Plaintiffs seek injunctive relief, compensatory damages, interest, and costs.

In her answer to the complaint, Joan Giebink admits that she is the trustee of the trusts identified in plaintiffs' complaint and that plaintiffs are beneficiaries under some of those trusts. Joan tacitly admits that she has refused to give the plaintiffs the information they have requested because she alleges that she has offered to give the information to plaintiffs subject to a confidentiality agreement, and that plaintiffs have refused to enter into such an agreement. Joan states that she has legitimate concerns as trustee over dissemination of the information requested by plaintiffs. Joan denies that she has breached her fiduciary duty or any statutory duty to plaintiffs. She asserts the affirmative defense of failure to state a claim upon which relief can be granted and also attacks the basis for plaintiffs' assertion of subject matter jurisdiction.

Plaintiffs recently amended their complaint to add two separate limited liability companies (hereinafter "LLCs") as parties. Plaintiffs allege that Joan Geibink made transfers of real estate from the trusts to the LLCs without any consideration being given to the trusts for the transfers. Plaintiffs allege that the value of the two transfers exceeds $1 million. Plaintiffs' amended complaint seeks disgorgement of the real estate transfers from the LLCs back to the trusts.

On February 3, 2009, plaintiffs served upon defendant Joan Giebink*fn2 two requests for the production of documents: (1) seeking a copy of all trust instruments and (2) seeking general financial information regarding the assets of the trust, including, but not limited to, bank records for each trust, miscellaneous contracts, promissory notes which relate to the assets of the trusts, real estate records, deeds and abstracts regarding real property held by the trusts, and copies of all trust income tax records.

Joan provided documents responsive to the first category of documents, the trust instruments. However, she objected to providing any documents in the second category stating that plaintiffs have not shown a statutory or common law right to obtain the documents and that the documents are confidential. After unsuccessful attempts to resolve this discovery dispute informally, plaintiffs filed the instant motion to compel.

DISCUSSION

A. Scope of Discovery Under Rule 26

Federal Rule of Civil Procedure 26(b)(1) sets forth the standard governing the scope of discovery in civil cases:

(1) Scope in General. Unless otherwise limited by court order, the scope of discovery is as follows: Parties may obtain discovery regarding any non-privileged matter that is relevant to any party's claim or defense--including the existence, description, nature, custody, condition, and location of any documents or other tangible things and the identity and location of persons who know of any discoverable matter. For good cause, the court may order discovery of any matter relevant to the subject matter involved in the action. Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence. All discovery is subject to the limitations imposed by Rule 26(b)(2)(C).

See Fed. R. Civ. P. 26(b)(1).

The advisory committee's note to the 2000 amendments to Rule 26(b)(1) provide guidance on how courts should define the scope of discovery in a particular case:

Under the amended provisions, if there is an objection that discovery goes beyond material relevant to the parties' claims or defenses, the court would become involved to determine whether the discovery is relevant to the claims or defenses and, if not, whether good cause exists for authorizing it so long as it is relevant to the subject matter of the action. The good-cause standard warranting broader discovery is meant to be flexible.

The Committee intends that the parties and the court focus on the actual claims and defenses involved in the action. The dividing line between information relevant to the claims and defenses and that relevant only to the subject matter of the action cannot be defined with precision. A variety of types of information not directly pertinent to the incident in suit could be relevant to the claims or defenses raised in a given action. For example, other incidents of the same type, or involving the same product, could be properly discoverable under the revised standard. . . . In each case, the determination whether such information is discoverable because it is relevant to the claims or defenses depends on the circumstances of the pending action.

The rule change signals to the court that it has the authority to confine discovery to the claims and defenses asserted in the pleadings, and signals to the parties that they have no entitlement to discovery to develop new claims or defenses that are not already identified in the pleadings. ... When judicial intervention is invoked, the actual scope of discovery should be determined according to the reasonable needs of the action. The court may permit broader discovery in a particular case ...


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