Free Response in Opposition to Motion - District Court of Arizona - Arizona

B1/31/EBBE 14:52 I“'1EQGHER+GEER —> 9E@2241126@ No. 758 Ganz
· 8800 Noam Cmnt Claims Dam, Sum 261
1 ( I E 500 smut. Amzoun 85258
SE R riirrmose (480) 607-9719
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ATTORNEYS•AT·LAW WVNLMEAGPlER·COM
Kurt M. Zitzer
Direct Line (480) 624-8570
Direct Pax (480) 222/6676

(Admitted in Arizona and Illinois)
January 31,2006 in
Via Facsimile (602) 241-1260 Via Facsimile (602) 382-6070 A
Mr. Robert M. Frisbee, Esq. Mr. Dan W. Goldine, Esq.
Frisbee & Bostock, P.C. Snell & Wilmer, LLP
5611 N. 16*** Street 1 Arizona Center
Suite 300 400 B.Va11 Buren St. _
Phoenix, Arizona 85016 Phoenix, Arizona 85004
Re: Meritage Homes Corp. v. Ricky Lee Hancock cz al., No. CV 04-0384-
PHX-ROS, In the United States District Court for the District of Arizona.
Our File No.: 56375-1
Dear Bob and Dan: V I
This firm represents Titus, Brueckner & Berry, P.C. i("TB&B"). It is my
understanding that the parties to the litigation referenced above are presently engaged in a
discovery dispute over the production of documents maintained by my client. I am _
sending this letter in an eH`ort to assist in resolving the dispute and in accordance with
Federal Civil Procedure Rule 26. Given the rather unique and unfortunate nature of how
my client has become involved in this controversy, I believe it is necessary to make some _ ·
issues clear for the record, and then offer what I hope you will each find as a reasonable
i and constructive suggestion on how to move the discovery process forward
As noted, TB&l3 is not a party to the litigation, and as such is rmder no obligation
to comply with a Rule 34 production request. Nevertheless, TB&B made a substantial
effort in time and resotuces (nearly 150 attorney and paralegal hours) to produce over
2,400 pages of documents to defense counsel in an effort to assist the defendants in
compliance with discovery. Furthermore, TB&B provided defense counsel with an 18
page memorandum that, in detail, explained the basis for why TB&.B did not believe it
could simply turn all documents over to the Hancock defendants or their counsel. Some _
of the reasons for those objections were confidentiality, privilege, work product,
relevancy, undue burden, and the fact that a significant amount of the documents are not
— within the “control" of any of the defendants in this case within the meaning of the term
‘ as used in Rule 34(zr).
` 60128.1 L -
` · Mnmssorn: 33 Soon-t Snm-1 Snuzsr. Sum: 4200, Mn~rm2.4i>ot1s, ll/IINNESOTA 55402 (612) 338-0661 i V
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@1/31/ZBBE 14: 52 I"1EQEHER+GEER —> eea224112ea No.‘?5e w as
Mr. Robert M. Frisbee, Esq.
Mr. Dan W. Goldfine, Esq.
January 31, 2006
Page 2
There seems to be somewhat of an inherent misunderstanding regarding the
production of documents at issue. Without question, much of the production request
seems to involve entities in which a Hancock defendant has an ownership or membership _ A
interest. But merely because a Hancock defendant has an interest in an entity does not `
mean privacy concerns and privileges become irrelevant. By way of explanation let me
illustrate a few examples. The request for production seems to pertain to, among other
entities, (i) HC Builders, Inc. ("HC Builders"), an entity principally owned by American g
West Homes Incorporated, an entity in which Greg Hancock is one of two directors and i
. in which he holds a minority interest, and an entity for which Rick Hancock is the '
president, and (ii) Buckeye Land, L.L.C. ("Buckeye Land"), an entity in which Greg
Hancock is the manager and maiority owner, an entity in which Rick Hancock is a
minority owner, and an entity in which there are three other minority members (none of
whom are parties to this lawsuit). Not only have the parties sought doctunents belonging
to separate legal entities, they have sought many documents that would appear to have no
relevance to the matter at hand. ln this regard, we note that Greg Hancoclds so—ca1led
“Outside Activities”, and his passive investments in up to 25% of land banking and land ‘
development projects, are expressly excluded from his covenant not to compete with
Meritage.
I am not aware of any facts that indicate you have attempted to serve thirdparty ‘
subpoenas on HC Builders, Buckeye Land or any of the other entities whose documents
are being sought. I mention this fact because it must be home in mind that the Hancock
defendants and these separate legal entities are not one and the same. The entities have a A .
` right to expect that 'l`B&B will maintain coniidentiality and privilege. This point is also
more than just mere semantics. The entities are also made up of other individual
members. Each of those individuals has a right to also expect that TB&B will maintain
conlidentiality and privilege, unless those individuals or entities speciiically choose to ·
waive the privilege, which they have not done. Furthermore, none of those entities or
other individuals are parties to the above suit, have been made subject to the jurisdiction
of the court, or been afforded due process. TB&B cannot simply disregard the obvious
concerns of its other clients. TB&B is ethically and duty bound to maintain those client
contidences. As such, a production request under Rule 34 is ineffective.
I have been furnished with a copy ofthe Court’s January 18, 2006 order. I am
· · somewhat alarmed by the Court’s statement therein that “[s}hou1d Mr. Frisbee and mus
fail to comply with their discovery obligations consistent with the Order, they will be
required to show cause why sanctions should not be imposed? For the record, TB&B is
not a party to the above litigation, and has never been made subject to the jurisdiction of
the'Court through means of a subpoena. I, and my client, have great respect for the
Court. Nevertheless, it is clear that TB&B has not been afforded necessary due process
such that the Court may have jurisdiction to issue an Order to Show Cause against my ‘ ‘
client, and rule that my client has violated Rule 37. That being said, what is nearly as .
disturbing is it seems the Court has been mislead to believe that TB&B has objected to
the production of documents without good cause. Since '1`B&B has not been a party to
. 60128.1
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@1/31/EBBE 14: 52 MEQGI-lER+GEER e 95 2241126B Nu. ree sees
Mr. Robert M. Frisbee, Esq.
Mr. Dan W. Goldtine, Esq.
January 31, 2006 -
Page 3 -
l this suit, and has not been heard by the Court with respect to the substantial issues of
privacy and privilege the production request presents, I can only assume that it will be
necessary for my iirrn to make the appropriate record. This leads me to my suggestion.
I believe that there are more appropriate, and far less invasive and expensive
means in which the parties might obtain the documents they are seeking. For example, '
the parties could direct their requests to, or serve third-party subpoenas on, the separate
_ legal entities. Furthermore, it would seem that the parties might consider tailoring their
requests for documents more closely to the claims anddefenses at issue in your lawsuit.
Nonetheless, if the parties wish to pursue their strategy of obtaining documents I
directly from TB&B, TB&B requests that either ofthe parties issue a subpoena to TB&B
for the documents sought in your case. 'I'B&B will respond to the subpoena unless it has
an objection. Since I anticipate that documents may be sought that involve the
confidentiality or privilege concerns of non-parties to your case, I want to make it clear
that I will seek the appropriate protective order if necessary. At that point, I hope to have
an opportunity to fully brief the issue for the Court, and seek all of the relief afforded a
A non—1itigant third pany under Rule 45(c). In the spirit of Rule 26, I hope you will 2
consider my suggestion. '
I would like to make one final point. Counsel for the defendants has asked me to
request the Court stay its order. I do not believe it would be appropriate for me to take
that action. '[B&B is not a party to the litigation, or subject to the C0urt’s jurisdiction. I
believe it would be more appropriate for the parties to take this matter up with the Court.
Certainly, you can feel free to share my letter with the Judge and seek direction as to
whether the Court believes my suggestion is appropriate.
Should you have any questions, please contact the undersigned.
Very truly yours, ‘ ‘
MZEAGHER & GEER, P.L.L.P.
scim.1 ‘
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