United States District Court, D. Arizona
Honorable John Z. Boyle United States Magistrate Judge
before the Court are Plaintiff Erus Builders, LLC’s Ex
Parte Application to Amend Case Management Order, or
Alternatively, to Vacate Dates and Schedule New Case
Management Conference (Doc. 64), Erus’ Notice of
Joinder of Parties Pursuant to Rules 15 and 20 of the Federal
Rules of Civil Procedure (Doc. 66),  Erus’ Motion to Compel
Deposition of Defendant Malcolm Adler (MAdler) (Doc. 69), and
MAdler’s Motion for a Referral to a Magistrate Judge
for a Settlement Conference (Doc. 94). Below, the Court
addresses these Motions.
Motion to Amend Case Management Order
requests the Court extend the discovery deadlines in this
matter because: (1) the Court previously stayed the
proceedings for two months; (2) MAdler’s discovery
responses are incomplete; (3) Wells Fargo did not produce
full documents in response to a subpoena; (4) Erus seeks to
add additional parties to this action “which will not
only require additional discovery, but will affect the scope
and breadth of the issues and claims in this case"; and
(5) MAdler cancelled his deposition with one day's notice
because he was advised by counsel not to answer any questions
besides his name or biographical information pursuant to his
Fifth Amendment rights. (Doc. 64 at 3-5.)
Jerome Wenger (JWenger) and Sharon Airman (SAltman) oppose
Erus' Motion. (Doc. 74.) Specifically, they contend that
they believe there is no basis for liability against them in
this action, the Court should deny Erus' request to add
additional parties, and Erus has had sufficient time to
complete discovery. MAdler has not responded to Erus'
Motion, and the time to do so has passed. LRCiv 7.2(c).
detailed below, the Court will grant Erus additional time to
depose MAdler, and will grant in part and deny in part
Erus' request to add new parties. Accordingly, the Court
will extend the case management deadlines in this matter as
• The deadline for completing MAdler's deposition is
September 16, 2016.
• The deadline for completing fact discovery is October
• The parties shall provide full and complete expert
disclosures by August 26, 2016.
• Rebuttal expert disclosures shall be completed by
September 23, 2016.
• Expert depositions shall be completed by October 28,
• Dispositive motions shall be filed no later than
December 16, 2016.
Motion to Compel MAdler's Deposition
November 2, 2015, Erus noticed the deposition of MAdler for
November 13, 2015, in Philadelphia. (Doc. 69-4 at 2-3.) The
parties also scheduled the depositions of JWenger and SAltman
for the previous day, November 12, 2015, in Philadelphia.
(Doc. 69 at 3.) MAdler's counsel, Robert Mann, asserts
that on November 10, 2015, he learned that MAdler had
received an SEC subpoena. (Doc. 78 at 2.) After a preliminary
investigation, Mr. Mann asserts, MAdler decided to invoke his
Fifth Amendment privilege to questions asked during his
deposition. (Id.) Mr. Mann informed counsel of
MAdler’s decision the day before MAdler was to be
deposed. (Id.) It appears that the parties, after
the other depositions were completed on November 12, 2015,
put their positions on the record:
BY MR. FRAME:
Q. Mr. Adler, my name is Paul Frame. I represent Erus
Builders in this matter, and I understand there’s
something you want to put on the record about this
Q. Okay. Go ahead, sir.
A. On the advice of counsel, I invoke my right under the
Fifth Amendment of the United States Constitution and all
applicable state constitutions not to answer on the grounds I
may incriminate myself.
MR. FRUTKIN: So I’ll put on the record that with
respect to any substantive question, other than his name or
basic biographical information, that would be his response,
and that applies to any question based on a pending
MR. FRAME: Okay.
MR. HARVEY: This is Mr. Harvey. I would ask a series of
questions at this deposition if it wasn’t asked by the
plaintiff about my client’s noninvolvement in this
deposition -- Ms. Altman’s noninvolvement and the fact
that there’s no basis for liability against either of
my clients. And do I understand that he would answer -- he
would refuse to answer all those question on the same basis?
MR. FRUTKIN: Correct. And so, to the extent that you have any
questions that he’s -- that he would otherwise respond
to, we’ll preserve the record for you just as much as
Erus, that he refused to respond to those questions as well
on Fifth Amendment grounds.
MR. HARVEY: Okay. Well, we -- you know, I understand your
position. We don’t agree with it. We think that
there’s probably a lot of questions he could answer. We
reserve the right to move to compel as necessary, but I
understand your position, and there’s no sense bringing
. . . .
MR HARVEY: Just to clarify, this was the deposition that was
going to take place tomorrow. Counsel just called me at my
office upstairs and asked me to come down. They advised that
this was going to happen. And so we’re doing this in
lieu of having Mr. Adler appear at his deposition tomorrow.
And make this -- and I understand what you’re saying
is, he would invoke his Fifth Amendment rights to anything
related to this beyond his name.
MR. FRUTKIN: Correct. And with that being said, obviously,
there may come a time where there is more information known
specifically about what the scope of the inquiry is that
would allow him the ability to respond to various questions;
however, right now, he’s invoking that with respect to
any question whatsoever, so that we’re clear.
(Doc. 69-8 at 4-7.)
now moves to compel the Deposition of MAdler. (Doc. 69.) Erus
contends that MAdler improperly cancelled his deposition the
day before it was scheduled to take place, after Erus’
counsel had traveled to the East Coast, based on an assertion
that his Fifth Amendment rights protect him from testifying
in this matter. Erus also requests the Court order MAdler
to pay Erus’ attorneys’ fees caused by his
failure to appear at his deposition. (Id. at 8.)
opposes Erus’ Motion, arguing that Erus failed to
comply with the Court’s Scheduling Order, Erus failed
to meet and confer regarding rescheduling MAdler’s
deposition, Erus chose to cancel the deposition, MAdler did
not fail to appear, MAdler’s current counsel was not
aware of the SEC Subpoena until November 10, 2015, and MAdler
has a right to invoke his Fifth Amendment rights. (Doc. 78 at
3-15.) MAdler further seeks his attorney’s fees
incurred in having to respond to Erus’ Motion to
Compel. (Id. at 16.)
initial matter, the Court’s Case Management Order
provides the following:
a. The parties may not file written discovery motions without
leave of Court.  If a discovery dispute arises, the parties
must promptly contact the Court to request a telephonic
conference concerning the dispute. The Court will seek to
resolve the dispute during the telephonic conference, and may
enter appropriate orders based on the conference. The Court
may order briefing, if necessary.
b. Parties shall not contact the Court concerning a discovery
dispute without first seeking to resolve the matter through
personal or telephonic consultation and sincere effort as
required by LRCiv 7.2(j). Any briefing ordered by the Court
must also comply with LRCiv 7.2(j).
(Doc. 36 at 4.) Here, Erus did not seek leave before
filing its Motion to Compel in violation of the Court's
Case Management Order, which has caused delay and the parties
to incur additional and unnecessary fees in resolving this
dispute. Erus acknowledges in its Reply that it failed to
comply with the Court's Case Management Order, but
asserts it did so "in hopes of expediting [the]
process." (Doc. 85 at 8.)
parties must fully comply with the Court's Orders. Such
compliance is NOT optional.
the Court could deny or strike Erus' Motion for its
failure to comply with the Court's Case Management Order,
in the interest of judicial economy, the Court will address
Erus' Motion based on the parties' briefing.
parties appear to agree, the Fifth Amendment privilege must
be invoked on a question-by-question basis. (Doc 69 at 7-8;
Doc. 78 at 13.) Specifically, "[t]he only way the
privilege can be asserted is on a question-by-question basis,
and thus as to each question asked, [MAdler] has to decide
whether or not to raise his Fifth Amendment right."
Doe v. Glanzer, 232 F.3d 1258, 1263 (9th Cir. 2000);
see also United States v. Seifert, 648 F.2d 557, 560
(9th Cir. 1980) ("[A] non-party witness cannot refuse to
take the stand. His privilege arises only when he asserts it
as to a question put to him, and it is for the court to say
whether he is entitled to the privilege."); United
States v. Tsui, 646 F.2d 365, 367 (9th Cir. 1981)
("Even when the District Court is satisfied that the
witness has a valid Fifth Amendment claim with regard to some
issues, the court must permit the questioning to establish
the scope of the witness' claim and to determine whether
there are other issue as to which the witness would not be
able to assert the privilege."). Therefore, a
"blanket claim of privilege is simply not
sufficient." Davis v. Fendler, 650 F.2d 1154,
1160 (9th Cir. 1981).
it appears from the record that MAdler conveyed his intent to
assert his Fifth Amendment rights to almost all of Erus'
questions. However, those questions were never asked.
Therefore, the Court cannot determine whether invocation of
his Fifth Amendment rights in response to Erus' questions
entitled to depose MAdler because he is a named party.
See Fed. R. Civ. P. 30(a)(1). And, as stated above,
a blanket assertion of Fifth Amendment protections is not a
sufficient basis on which to not answer questions during a
properly noticed deposition. Accordingly, the Court will
order MAdler to appear for a properly noticed deposition. The
parties shall have until September 16, 2016 to complete the
deposition. This deadline will allow the Court time to
address any discovery disputes regarding MAdler's
deposition prior to the fact discovery cut off MAdler may not
assert a blanket claim of privilege to all potential
questions posed by Erus. MAdler may, instead, refuse on Fifth
Amendment grounds to answer any "questions which present
a 'real and appreciable danger of
self-incrimination.'" McCoy v. Comm'r,
696 F.2d 1234, 1236 (9th Cir. 1983) (quoting United
States v. Neff, 615 F.2d 1235, 1238 (9th Cir. 1980)).
Court will deny the parties' requests for fees. Erus'
counsel was already in Philadelphia for other depositions,
did not contact the Court when the issue arose, and filed a
Motion to Compel not authorized by the Court's Case
Management Order. The Court will also deny MAdler's
request for attorneys' fees because, as detailed above,
his blanket invocation of his Fifth Amendment rights was not
Motion to Add Parties
seeks to add eight new defendants: (1) Aztec Solar Power LLC
(ASP); (2) Aztec Solar Renewables, Inc. (ASR); (3) Skreem
Studios, LLC (Skreem); (4) Martin Consultants, Inc. (Martin
Consultants); (5) Allstar Consulting and Entertainment, Inc.
(Allstar); (6) Jeffrey Martin (JMartin); (7) Thomas Moore
(TMoore); and (8) Bruce Wenger (BWenger). (Doc. 66 at 2-7.)
In its "Notice, " Erus asserts various claims
against these new parties. (Id. at 1-2.)
and SAtlman oppose Erus' Motion, arguing that Erus failed
to comply with the Local Rules of Civil Procedure, and adding
the parties Erus identifies would be futile. (Doc. 75.) In
reply, Erus attached a proposed First Amended Complaint that
includes new allegations and claims against the individuals
and entities Erus seeks to add. (Doc. 84.) On April 12, 2016,
the Court ordered the parties to submit supplemental briefing
regarding whether any of Erus' proposed amendments are
futile. (Doc. 95.) On April 26, 2016, Erus submitted a
Supplemental Brief. (Doc. 98.) On May 10, 2016, Defendants
MAdler, JWenger, and SAirman filed Responses to Erus'
Supplemental Brief. (Docs. 110, 111.)
Amendment Standard ...