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Susquehanna Commercial Finance, Inc. v. Vascular Resources

April 30, 2010


The opinion of the court was delivered by: Magistrate Judge Carlson

Judge Conner



Plaintiff Susquehanna Commercial Finance, Inc. ("Susquehanna"), has filed two motions pursuant to Rule 37 of the Federal Rules of Civil Procedure, seeking entry of orders compelling Defendants Vascular Resources, Inc. ("VRI"), and Bruce Wallace, to provide further responses to written discovery propounded in this case. The first motion seeks to compel VRI to provide full and complete answers to interrogatories and responses to requests for production of documents that Susquehanna has served. The second motion seeks entry of an order compelling Mr. Wallace to produce and permit inspection and copying of documents. Defendants have filed briefs opposing the motions, to which Plaintiff has replied. The motions are now ripe for disposition. For the reasons set forth below, the motions will be denied, without prejudice , but the Defendants, who are now represented by new counsel, are urged to continue promptly to pursue the path of candid disclosure which they have pledged to follow in this case.


Susquehanna commenced this action by filing a complaint and a motion for special relief against VRI in the Court of Common Pleas of York County, Pennsylvania, on October 6, 2009. Susquehanna commenced these legal proceedings to recover nearly $3 million that Susquehanna, as a lessor, advanced to VRI -- a party with which it had no written contract -- in order for VRI to procure medical equipment that was to be used or otherwise installed in a new medical facility being constructed in York County, Pennsylvania. The party constructing the medical facility -- and the intended lessee of the equipment to be purchased with the funds that Susquehanna advanced -- Brookeside Surgical Arts, LLC ("Brookeside") is not a party to this action, and Susquehanna has never sought to add it or its members as Defendants.*fn1

VRI subsequently removed the action to this Court on October 16, 2009. Following removal, Susquehanna filed a motion for a preliminary injunction, and VRI moved to dismiss the action entirely. Both motions were denied on January 6, 2010.

Meanwhile, Susquehanna sought to take discovery from VRI, principally by seeking answers to the bank's questions regarding the whereabouts of the nearly $3 million that it paid to VRI, and details regarding any medical equipment that may have been purchased with the funds. Susquehanna was frustrated from the start with what it considered to be inadequate responses from VRI, and Susquehanna resorted to two discovery conferences with the Court in an effort to extract further or more accurate responses from VRI.*fn2

In addition to the difficulty that Susquehanna claims to have had in obtaining satisfactory answers to its discovery, the discovery process in this case, and the litigation generally, has also proceeded fitfully due in part to the fact that VRI has had two of its lawyers or their law firms withdraw from representing the company since the action was removed to this Court. Likewise, Defendant Wallace was not even added as a Defendant until January 5, 2010, and did not file an answer until March 22, 2010 -- nearly two weeks after Susquehanna filed the pending motion to compel Mr. Wallace to permit inspection and copying of documents. Replacement counsel for VRI and Mr. Wallace entered their appearance on March 12, 2010 -- the day that Susquehanna moved to compel VRI to provide further discovery answers, and the day after Susquehanna filed its motion directed at Mr. Wallace.

Defendants VRI and Wallace filed briefs in opposition to the pending motions to compel on March 30, 2010. Susquehanna filed its reply to VRI's opposition brief on April 12, 2010, and to Mr. Wallace's opposition brief April 13, 2010.


A. Relevant Legal Standards

Rule 26(b)(1) of the Federal Rules of Civil Procedure supplies the scope and limitations governing the use of discovery in a federal civil action:

(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 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).

Fed. R. Civ. P. 26(b)(1). Issues relating to the scope of discovery permitted under the Rules are to be resolved, almost exclusively, at the discretion of the Court. Wisniewski v. Johns-Manville Corp., 812 F.2d 81, 90 (3d Cir. 1987). A court's decisions regarding the conduct of discovery will be disturbed only upon a showing of an abuse of discretion. Marroquin-Manrizuez v. I.N.S., 699 F.2d 129, 134 (3d Cir. 1983).

Rule 33 of the Federal Rules of Civil Procedure provides for discovery through written interrogatories. Rule 33(a)(2) specifically states that "[a]n interrogatory may relate to any matter that may be inquired into under Rule 26(b). Fed. R. Civ. P. 33(a)(2). The Rule further directs that, in the case of a corporate party, the interrogatories must be answered by "any officer or agent, who must furnish the information available to the party." Fed. R. Civ. P. 33(b)(1)(B). Rule 34, in turn, provides similar and additional requirements with respect to requests for the production of documents in the "responding party's possession, custody, or control." Fed. R. Civ. P. 34(a)(1).

Rule 37 authorizes a party to move to compel disclosure if the discovery propounding discovery believes that it has received incomplete or inadequate answers to discover authorized under Rule 26. Fed. R. Civ. P. 37. With respect specifically to requests ...

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