New Falls Corp. v. Soni

MEMORANDUM AND ORDERI. PRELIMINARY STATEMENTThis is an action seeking the recovery of sums allegedly owed by Defendant Om P. Soni (“Defendant” or “Soni”) to Plaintiff New Falls Corporation (“Plaintiff”) under a promissory note executed for business and commercial loans. See generally Plaintiff’s Complaint (“Compl.”) [DE 1]. Plaintiff alleges that on or about May 14, 2007, Soni Holdings, LLC (“Soni Holdings”), which is a not a party to this litigation, executed and delivered to Plaintiff’s predecessor-in-interest, AmSouth Bank, for substantial consideration, a “Note for a Business and Commercial Loans” (“the Note”), in the amount of $310,216.50. Id.5. Contemporaneous with this transaction, Plaintiff alleges that Defendant Om P. Soni executed and delivered to AmSouth Bank a Guaranty Agreement (“the Guaranty”) through which Defendant Soni guaranteed the obligations under the Note. Id.6. Presently before the Court is Plaintiff’s motion, pursuant to Federal Rule of Civil Procedure 45, to compel non-party Soni Holdings to produce documents pursuant to a subpoena dated January 27, 2017. See generally Plaintiff’s Motion to Compel (“Pl.’s Mot.”) [DE 31]; Plaintiff’s Memorandum of Law in Support of its Motion (“Pl.’s Mem.”) [DE 31-10]. Plaintiff also seeks attorneys’ fees and costs associated with the motion. Soni Holdings opposes the motion. See Soni Holdings’ Memorandum in Opposition (“Soni Holdings Opp’n.”) [DE 33]. Also before the Court is Defendant’s third motion for a protective order on behalf of Soni Holdings in a separate but related matter before a different Court, New Falls Corporation v. Soni Holdings, LLC, MC 18-1111. See DE 45. For the reasons which follow, Plaintiff’s motion to compel compliance with the subpoena is GRANTED and Defendant’s motion for a protective order is DENIED.II. RELEVANT PROCEDURAL BACKGROUNDPrior to the filing of the Complaint in this action, an arbitration was commenced between Plaintiff, Defendant Om P. Soni, and Soni Holdings, pursuant to the terms of the Note and the Guaranty. See Affirmation of Steven Giordano in Support of Plaintiff’s Motion (“Giordano Aff.”)11. On October 20, 2016, Defendant stipulated to waive his right to arbitration and requested that he be sued in New York, individually, with regard to the Note and Guaranty. Id. Plaintiff accordingly commenced this action on or about December 9, 2016 seeking repayment from the Defendant of the obligations under the Note pursuant to the Guaranty. See generally Compl. Plaintiff states that the arbitration continued against Soni Holdings, eventually resulting in an award of $257,364.84, plus attorneys’ fees, in Plaintiff’s favor.¹On or about January 12, 2017, Defendant filed his Answer in the instant action. He asserted multiple affirmative defenses, including, inter alia, accord and satisfaction of the Note, as well fraud and forgery. Defendant alleges that his name was signed on the Guaranty without his consent. See generally Defendant’s Answer (“Answer”) [DE 6]. On February 10, 2017, Defendant moved the Court for an order of protection on behalf of non-party Soni Holdings in response to a subpoena for documents served by Plaintiff on Soni Holdings, arguing the subpoena demanded irrelevant and privileged personal financial data. See DE 7. Shortly thereafter, the Court stayed all obligations under the subpoena pending discussion of the matter at the Initial Conference scheduled for March 17, 2017. See DE 8. Following a lengthy discussion at the Conference as to Defendant’s standing to seek a protective order on behalf of a non-party, the Court denied Defendant’s motion, without prejudice. See DE 12.Defendant filed a second motion for a protective order on or about April 13, 2017, in which Defendant raised arguments essentially identical to those in his first motion for a protective order, namely, that the subpoena served on non-party Soni Holdings as well as the document demands served on Defendant “concern[ ] privileged and/or confidential personal financial information that is not relevant.” DE 15 at 13. Defendant also argued, as he did in his first motion, that “[t]he demand for production is clearly designed for the purpose of intimidation, oppression, and undue burden and expense.” Id.; see DE 7 at 2. Plaintiff opposed Defendant’s motion. See DE 16.At the Discovery Status Conference held on August 1, 2017, the Court granted certain portions of Defendant’s second motion for a protective order and directed Plaintiff to serve a motion to enforce the subpoena as to non-party Soni Holdings.² See DE 20. On August 16, 2017, Plaintiff filed a motion for contempt against Soni Holdings for its failure to comply with the subpoena. See DE 22. In an Order dated October 30, 2017, the Court denied Plaintiff’s motion, without prejudice, finding that although the motion purported to include a motion to compel compliance, the motion failed “to address the necessary subject matter relevant to a motion to compel enforcement of the subpoena.” DE 26 at 3. The instant motion to compel compliance was filed on or about November 9, 2017. See generally Pl.’s Mot.On May 18, 2018, while the instant motion was pending, Defendant filed a third motion seeking an order of protection. This motion seeks an order of protection on behalf of Soni Holdings precluding discovery pursuant to a subpoena in a separate but related action, New Falls Corporation v. Soni Holdings, LLC, MC 18-1111.³ See DE 45. Plaintiff opposes the motion, arguing the application is frivolous, since the subpoena seeks documents post-judgment in an action to enforce a judgment, and “[t]he threshold for relevance in the Post-Judgment matter against Soni holdings is completely different than it would be in this matter.” DE 46 at 2.III. THE PARTIES’ POSITIONSPlaintiff states that Defendant Om P. Soni is a member of Soni Holdings, and Soni Holdings signed the Note which is at the center of this case. See Giordano Aff.