Markwood Investments Ltd. v. Neves (In re Neves)
Markwood Investments Ltd. v. Neves (In re Neves)
Opinion of the Court
MEMORANDUM OPINION ON RULINGS ON REQUEST FOR DE BENE ESSE DEPOSITION AND VIDEO APPEARANCE AT TRIAL
The battles between the Plaintiffs, Markwood Investments, Ltd. and Golden Dawn Corporation on the one hand, and the Debtor/Defendant, Fabrizio Dulcetti Neves on the other, in and out of court, have transpired over many years and across various venues. The procedural issues that developed in the course of this Adversary Proceeding have generated their own history of rulings—written and otherwise.
This Memorandum Opinion outlines in more detail the basis for those rulings. I denied each of the requests because the
FACTS
From the filing of the original complaint in 2010, Mr. Salvatore Frieri (“Frieri”), the Plaintiffs’ principal, was the Plaintiffs’ witness in chief. The underlying issue in each of the Frieri Motions was whether Frieri’s inability to travel from Italy to attend the trial warranted my allowing the Plaintiffs to take Frieri’s deposition for use at trial, or, after I denied that relief, allowing Frieri to appear at trial through a contemporaneous video feed. In order to understand why I said “no,” it is important to understand the timeline under which these issues evolved.
By order dated September 14, 2010,
After a long delay caused by various procedural maneuvers on both sides,
Thereafter, Neves filed a Motion to Compel Mediation,
Meanwhile, in March 2013, the Plaintiffs filed a Motion to Strike Neves’ Pleadings and Request for Evidentiary Hearing (the “Motion to Strike”).
On July 2, 2013, Neves filed a Motion to Set Pretrial Conference and All Related Deadlines,
Ultimately, Frieri’s passport issue was resolved. But on July 15, 2013, when Fri-eri went to the Italian Court to recover his passports, not only were Frieri’s passports withheld, but he was arrested by Italian authorities on charges of attempted murder, extortion, and other serious matters, and was placed under house arrest.
On July 16, 2013, Neves filed a Notice of Deposition of Plaintiffs’ Corporate Representative, to be taken at his counsel’s offices in Miami, which .notice specifically identified the corporate representative as Salvatore Frieri.
On July 22, 2013, at the hearing on the Plaintiffs’ Motion for Protective Order, only days before the scheduled trial on the Motion to Strike, several things occurred. First, the parties discussed at great length the consequence of Frieri’s inability to be physically present at the hearing on the Motion to Strike (which situation had existed prior to his house arrest) and, as of July 22, Frieri’s virtually complete and total inability to communicate with the outside world. Counsel for the Plaintiffs acknowledged that they would be required to produce a different corporate representative, but who that person should be would
Second, in light of Frieri’s inability to travel or communicate, Plaintiffs’ counsel asked for a continuance of the trial on the Motion to Strike to “see what happens.” I denied the ore tenus Motion to Continue and I denied the Motion to Strike because it was clear that the Plaintiffs were not ready to proceed.
Third, I denied the Motion for Protective Order in part and required that Frieri be deposed based on his personal knowledge about two of the topics that Neves identified as the several topics about which he wished to question Frieri.
Finally, the parties were directed to submit a scheduling order indicating the discovery cutoff and the dates for trial.
I had set a status conference for September 4, 2013. In the Plaintiffs’ Motion to Continue that status conference, filed on August 21, the Plaintiffs, explained that Frieri’s house arrest would not be reviewed by the Italian courts prior to September 15,
On September 20, 2013, Neves filed and served an Amended Notice of Deposition of the corporate representative of each-of
However, at the October 28, 2013 hearing, the Plaintiffs confirmed that Frieri’s situation remained the same—Frieri was under house arrest, unable to speak with anyone except for his Italian counsel. Plaintiffs’ counsel stated that they could only communicate with Frieri by passing notes and messages through Frieri’s Italian counsel.
Finally, on November 18, 2013, the Plaintiffs filed the Motion to Permit Mr. Salvador Frieri to Appear for Deposition by Video Conference and for Issuance of Request to Italian Court for Video Appearance (the “Video Depo Motion”).
Neves’ Objection to Motion to Permit Mr. Salvador Frieri to Appear for Deposition by Video Conference and for Issuance of Request to Italian Court for Video Appearance,
At the hearing on the Video Depo Motion, once it became clear that Neves was seeking the deposition of a corporate representative, not necessarily Frieri, the Plaintiffs stated they would no longer seek to authorize Frieri’s deposition appearance by video, but only his trial appearance, and so I denied the Video Depo Motion. On December 5,2013, only ten days before the agreed upon scheduled discovery cut-off, two and a half years after Frieri’s travel woes had begun, almost nine months after Frieri’s passports had been confiscated, nearly five months after the Plaintiffs said they would only agree to a trial date if Frieri could appear by video and then Frieri was put under house arrest, and more than two months after initiating a process in state court to use Frieri’s testimony through remote access, the Plaintiffs filed the De Bene Esse Motion
On January 8, 2014, the Plaintiffs filed the Trial Video Motion. The parties argued the motion and objections on January 23, 2014 and I denied the Trial Video Motion by oral ruling on February 12, 2014. The parties proceeded to trial and Frieri’s testimony was presented solely through the 2010 depositions.
ANALYSIS
While the Plaintiffs’ request for Frieri’s appearance by video at trial is governed by a rale of civil procedure and their request for his de bene esse deposition is framed by case law, the factors that inform my decision in considering these requests are substantially similar—timing, the circumstances giving rise to the request, and prejudice to the non-moving party.
A de bene esse deposition is a deposition that is taken for the purpose of preserving testimony at trial. Requests for the taking and use of de bene esse depositions have come up under a variety of circumstances. Courts that have considered these requests have focused on a variety of factors including the timing of
The only relevant case on point in the Eleventh Circuit is Chrysler Int’l Corp. v. Chemaly, 280 F.3d 1358, 1362 (11th Cir. 2002). In Chrysler, the plaintiff argued that the district court erred in issuing a protective order preventing it from deposing a third-party witness in South Africa. The district court initially granted the plaintiffs request to obtain the witness’s testimony and set deadlines accordingly. The court later extended the discovery deadline several times. The final discovery deadline was April 25 and the trial was set for July 3. Id. at 1360. The plaintiff scheduled the deposition for June 6—one month before trial and over one month after the final discovery deadline expired. Id. Accordingly, the defendants moved for a protective order to prevent the plaintiff from taking the deposition, which the district court granted; the plaintiff took the deposition anyway. Id. The court, however, denied the plaintiffs request to use the deposition at trial. The plaintiff lost at trial and appealed, arguing that exclusion of the deposition testimony was reversible error. Id. at 1359.
The Eleventh Circuit affirmed the district court’s decision to grant the motion for protective order and deny use of the deposition at trial. Noting that a trial court has the discretion to control the proceedings before it, including the “pace of litigation,” the Eleventh Circuit rejected the plaintiffs argument that a de bene esse deposition should not be subject to the same discovery deadlines as other depositions. The Court wrote:
In allowing or disallowing a deposition to be taken for use at trial, it is appro*74 priate that the district court consider all the circumstances, including fairness to the adverse party and the amount of time remaining before the date set for trial. The district court can set a definite time limit for the taking of the very deposition it is permitting to be taken. And-the district court can make that time limit the same as the time limit for discovery depositions. Nothing about this approach to the setting of time limits is inherently unlawful.
Id. at 1362.
In this case, I ruled on December 23, 2013 that the Plaintiffs had been on notice for almost two years that their key witness had travel issues. The first problem—the arrest warrant in Colombia—did not resolve itself for almost a year, yet at no time during that year did the Plaintiffs take any steps to preserve the testimony of their prime witness. The second problem only lasted a few months, but arose during the time that the Plaintiffs had filed a case dispositive motion and a court-ordered mediation was pending;
Although I denied the De Bene Esse Motion at the hearing on December
The most persuasive showings of good cause and compelling circumstances are likely to arise when a witness is unable to attend trial for unexpected reasons, such as accident or illness, but remains able to testify from a different place.... A party who could reasonably foresee the circumstances offered to justify transmission of testimony will have special difficulty in showing good cause and the compelling nature of the circum- ■ stances. Notice of a desire to transmit testimony from a different location should be given as soon as the reasons are known, to enable other parties to arrange a deposition, or to secure an advance ruling on transmission so as to know whether to prepare to be present with the witness while testifying.
As I ruled with the De Bene Esse Motion, and as Neves noted in his objection to this last motion, there were no compelling circumstances because there was no surprise that Frieri would be unavailable for trial. Accord, Air Turbine Tech., Inc. v. Atlas Copco AB, 217 F.R.D. 545 (S.D.Fla. 2003).
In Niemeyer v. Ford Motor Co., a case procedurally similar to this case, the plaintiffs filed a motion to preserve testimony of a witness after the close of discovery which the Court did not permit, commenting that the plaintiffs “quandary” was of plaintiffs’ “own making.” No. 2:09-CV-2091 JCM (PAL), 2012 WL 5199145, *1 (D.Nev. Oct. 18, 2012). Thereafter, the Niemeyer plaintiffs sought relief from the court under Rule 43—seeking authority for remote contemporaneous transmission of the witness’ testimony. Like the Plaintiffs here, the plaintiffs in Niemeyer chose not to depose their witness during the discovery period. Id. at *4. The court held that Rule 43 truly “means ‘for good cause in compelling circumstances,’” citing the Advisory Committee Notes stating that the most persuasive showings of good cause and compelling circumstances are when a witness is unavailable for trial because of “unexpected reasons such as accident or illness.” Id. at *2 (citations omitted) (emphasis in original). The court also expressed concern over the prejudice to the defendant who might not know in advance which documents were relevant to the testimony, but the defendant would nonetheless be forced to provide all documents in advance of the trial to the witness and opposing counsel. Id. at *3. Because the plaintiffs could have foreseen the unavailability of the witness, the Rule 43 relief was denied. Id. In closing, the court repeated that while it might sympathize with the plaintiffs’ “quandary,” nonetheless “it remained true that the “quandary” was “of plaintiffs” own making.” Id. at *4.
■ I advised the parties after the hearing on January 29, 2014 that I would likely deny the Trial Video Motion, which I did on February 12, 2013.
CONCLUSION
There are circumstances that make it difficult for parties to have live witnesses at trial. The Federal Rules of Civil Procedure, applicable in bankruptcy by virtue of the Federal Rules of Bankruptcy Procedure, provide a framework for parties to obtain and preserve testimony by other means. Those same rules, and judge made law, also provide relief when unforeseen problems arise. But, the rules are not designed to relieve parties from the consequences of poor planning or bad tactical decisions, especially when such relief will have adverse consequences for the other party or parties in the case. The Plaintiffs made a conscious choice to wait until the last possible moment to deal with the unavailability of their key witness. They did so at their own peril. For the reasons stated on the record, and as more fully detailed in this memorandum opinion, the Motion for De Bene Esse Deposition and the Trial Video Motion are DENIED.
ORDERED in the Southern District of Florida on December 11, 2014.
. This matter was finally tried on February 24, 2013 through February 28, 2013. The final ruling is set forth in a separate opinion.
. ECF # 774.
. See Transcript at ECF # 813, p. 51.
. ECF #831.
. See Transcript at ECF # 905.
. ECF # 130 at ¶ 4, which amended an order dated September 14, 2010 (ECF # 125).
. See ECF # 528, p. 4.
. See ECF # 729 for details.
. ECF #528.
. Frieri has dual citizenship in Italy and Colombia.
. Referring to Neves’ deposition or Frieri’s deposition.
. See ECF #599.
. ECF #567.
. ECF #599.
. The Fourth Amended Qomplaint, ECF #419.
. ECF #657.
. ECF # 660,
. See Transcript at ECF # 703, p. 36; ECF #813, p. 8-9.
. See ECF #668.
. ECF #675,
. At the time the Motion for Protective Order was filed, Plaintiffs' counsel was not yet aware that Frieri was under house arrest, and that he "could have no communication with anyone outside of the house or with anyone other than his Italian court approved lawyer. He could not use a phone, could not use the internet, could not use a computer....” Jose Casal, counsel to the Plaintiffs, at July 22, 2013 hearing. Transcript at ECF # 703.
. Neves’ counsel correctly noted that the hearing on the Motion to Strike had been scheduled on April 4, 2013, and yet, Plaintiffs’ counsel had made no effort whatsoever (other than to wait and see what would happen) to address the possibility of their key witness and corporate representative being unable to attend.
. Transcript at ECF # 703.
. See ECF #722.
. The Italian courts apparently close for a month for the summer holidays and would not reopen before that date.
. ECF #708.
. ECF #726.
. See ECF # 726, p. 2-3.
. Id. atp. 41.
. ECF #749.
. See ECF # 749, p. 2.
.Id. at p. 2-3.
. According to Plaintiffs’ counsel, the state court trial took place on November 14, 15, and 18.
. See Transcript at ECF # 785, p. 20.
.ECF #757.
.The Objection also sought sanctions against Plaintiffs’ counsel arguing that the Plaintiffs misrepresented their lack of communication with Frieri, as the Italian court granted permission to Plaintiffs' counsel to speak with Mr. Frieri directly in the separate state court fraud action involving Frieri. I reserved ruling on that request and stated that I would deal with it after the trial. I will set a separate hearing on that Motion, notwithstanding that, at the time of this writing, Holland & Knight is no longer counsel to the Plaintiffs.
. As I stated at the hearing on December 23, 2013, “whether the fears [regarding Frieri] are real or imagined, they're there, whether he’s ultimately found liable or not liable, those accusations have been made ...,” and that is enough to create a burden on the Defendant. Transcript at ECF #813, p. 49-S0.
. See Transcript at ECF #813.
. ECF #801.
. Kuithe v. Gulf Caribe Maritime, No. 08-0458-WS-C, 2009 WL 3711553 (S.D. Ala. Nov. 3, 2009) (motion for de bene esse deposition denied after discovery closed because the movant knew that the witness was unavailable for at least nine months before the discovery deadline expired, but requested the deposition three months after the deadline); McDermott v. Liberty Maritime Corp., No. 08CV-1503(KAMXALC), 2011 WL 2650200, *3 (E.D.N.Y. July 6, 2011) (motion for de bene esse deposition of third party witnesses denied because the moving party knew that the witnesses would be unavailable almost fifteen months prior to the discovery deadline); George v. Ford Motor Co., No. 03 Civ. 7643(GEL), 2007 WL 2398806, *12 (S.D.N.Y. Aug. 17, 2007) (plaintiffs’ motion for de bene esse deposition denied because the motion could have been filed well before the discovery cutoff but was not filed until after the discovery deadline); Integra Lifesciences I Ltd. v. Merck, 190 F.R.D. 556, 559-60 (S.D.Cal. 1999) (court denied defendants’ request to depose a third party witness after the discovery period because there was no justification for the late request). But see Estate of Gee v. Bloomington Hosp. & Health Care Sys., Inc., No. 1:06-cv-00094-TWP-TAB, 2012 WL 729269, at *6 (S.D.Ind. Mar. 6, 2012) ("While discovery is closed under the terms of this court's scheduling order, that order does not prevent a party from memorializing a witness’s testimony in order to offer it at trial”).
. Chrysler Int’l Corp. v. Chemaly, 280 F.3d 1358, 1362 (11th Cir. 2002) (“... it is appropriate that the district court consider all the circumstances, including fairness to the adverse party and the amount of time remaining before the date set for trial”); Dopson-Troutt v. Novartis Pharm. Corp., No. 8:06-CV-1708-T-24, 2014 WL 408050, at *2 (M.D.Fla. Feb. 3, 2014) (the court granted the motion to take a de bene esse deposition because seven weeks before trial was determined to be “ample” time to take the deposition).
. RLS Assoc. LLC v. United Bank of Kuwait PLC, No. 01 Civ. 1290(CSH), 2005 WL 578917 (S.D.N.Y. Mar. 11, 2005) (court granted movant's request to take de bene esse deposition of one of the defendant’s employee who took a job in Dubai and advised that he could not travel to testify; there was no issue of delay by the movant or anticipated unavailability of the witness).
.The Eleventh Circuit observed that, in addition to several warnings to the parties about discovery deadlines and the need to take all depositions before the discovery cutoff, the plaintiff had known since the inception of the proceeding that the key witness was located in South Africa, and, in fact, had obtained an order from the district court that was submitted to South African authorities as a requirement for the deposition to occur. The South African authorities did not approve the taking of the deposition until close to the discovery deadline, which was the apparent cause of the delay but, nonetheless, the Eleventh Circuit held that the district court judge had not abused his discretion.
. I recognize that the Plaintiffs may not have felt the need to concern themselves with Fri-eri's presence at the Motion for Sanctions hearing, but the fact that the trial had to be canceled after several months and thousands and thousands of dollars in legal fees demonstrates that Frieri’s presence was indeed significant.
. The Joint Pretrial Order also stated that discovery would be allowed after the discovery cut-off date “only upon a showing of good cause and exceptional circumstances."
. This Memorandum Opinion is the written ruling that I promised at that hearing.
. ECF # 905, p. 5.
Reference
- Full Case Name
- IN RE: Fabrizio Dulcetti NEVES, Debtor. Markwood Investments Ltd. and Golden Dawn Corporation v. Fabrizio Dulcetti Neves
- Status
- Published