United States District Court, D. Colorado
CGC HOLDING COMPANY, LLC, a Colorado limited liability company; CRESCENT SOUND YACHT CLUB, LLC, a Florida limited liability company; HARLEM ALGONQUIN LLC, an Illinois limited liability company; and JAMES T. MEDICK; on behalf of themselves and all others similarly situated, Plaintiffs,
SANDY HUTCHENS, a/k/a Fred Hayes, a/k/a Moishe Alexander, a/k/a Moshe Ben Avraham; et al., Defendants.
KRISTEN L. MIX, Magistrate Judge.
This matter is before the Court on Defendants Broad and Cassel, Carl Romano and Ronald Gache's (the "Broad Defendants") privilege logs and in camera production of documents [#538, #538-3, #538-4, #538-5]. After careful review of the applicable pleadings, privilege logs and documents, the Court finds and concludes that some of the documents at issue are protected from discovery and others must be produced. These conclusions are based on the findings set forth below.
I. Factual Background
As described by the District Judge, the allegations involved in this case are as follows:
Plaintiffs contend that they were swindled by Sandy Hutchens and related individuals and entities, with the assistance of Canadian and American lawyers and a Canadian realtor. The gist of it is that Hutchens and his associates falsely represented that he was able and willing to make numerous, large commercial loans to more than 100 borrowers in the United States; that they were able to bilk prospective borrowers who thought they were dealing with legitimate lenders out of something in the range of eight million dollars of loan application or advance fees;' and that in support of the scheme they failed to disclose Hutchens' identity and his criminal history but instead perpetrated the fraud by disguising Hutchens through a number of different aliases and the use of corporations that were mere shells.
With perhaps one or two exceptions, loan commitments were not filled. That, however, is not the focus of the case. Plaintiffs have stipulated for purposes of this case that there were legitimate reasons on which a bona fide lender could have declined the loans. Plaintiffs' focus is on the advance fees that were paid on allegedly false pretenses but never returned. They assert claims based on RICO as well as state common law theories.
See Order on Pending Motions - No. 3 [#406] at 1-2.
As mentioned above, the Broad Defendants consist of a Florida law firm, Broad and Cassel, and two of its partners, Ronald Gache and Carl Romano. In 2008, the firm represented one of Hutchens' entities known as 308 Elgin Street, Inc. ("308 Elgin"). As part of this representation, the firm was involved in providing assurances that 308 Elgin's principal, Moishe Alexander (one of Hutchens' aliases), "was a respected businessman of honesty and high character" and that he had the ability to make a loan to the Crescent Sound Yacht Club in the amount of $44.8 million. The borrower accepted 308 Elgin's loan commitment and paid advance fees in the amount of $265, 000 after receiving assurances from Romano that "Alexander" had the ability to make the loan. "However, Romano did not inform [the borrower's lawyer] that Alexander was actually Hutchens or that he was a convicted criminal." Id. at 4-6. The Broad Defendants withdrew from representing Hutchens and his entities after six months "and, in particular, after whatever occurred during the September 14, 2008 meeting" between the Broad Defendants and one of Hutchens' attorneys. Prior to their testaments to "Alexander's" integrity and their eventual withdrawal from representing 308 Elgin, the Broad Defendants had been made aware of a "Jewish Whistleblower" website which exposed "Moishe Alexander" as Sandy Hutchens, "a man who had committed crimes of fraud in 2000 and drug trafficking in 2001." Id. at 4-5.
Plaintiffs' claims against the Broad Defendants were dismissed without prejudice by Order [#513] of the Court dated January 27, 2015. Plaintiffs and the Broad Defendants subsequently entered into a "Stipulation of Settlement, " which was approved by the court on August 5, 2015. Order [#560].
II. Procedural Background
The procedural history of the discovery dispute addressed in this Order is complicated. In response to Plaintiffs' request for production of documents, the Broad Defendants asserted various legal bases for protection of certain documents, and eventually submitted approximately 1500 pages to the Court for in camera review.
As outlined by the Broad Defendants, the dispute arose as follows:
During the course of discovery in this case, Plaintiffs demanded documents from the Broad Defendants, including [alleged] attorney-client privileged documents. The parties and the Court discussed and dealt with the privilege concerns more than two years ago, and in March of 2013, the Broad Defendants served two letters to the Court and parties explaining the Broad Defendants' position regarding the attorney-client privilege and attorney work product. At that time, the Broad Defendants also provided the Court with four CD's that contained documents... to review on an in camera basis.... In this same March of 2013 time frame, the various Defendants filed petitions with the United States Court of Appeals for the Tenth Circuit. The Tenth Circuit granted the Defendants' request for an appeal and as a result the District Court action was stayed before the Court resolved the document production issues and the privilege issues that had been identified shortly before the stay. After this matter was remanded by the Tenth Circuit, the District Court resurrected the document production and privilege issues at a status conference on April 23, 2015. At that time, the Court ordered the Defendants and the Broad Defendants to review documents that Plaintiffs had requested prior to the stay of this matter and identify which documents remain privileged in light of the Court's rulings.... The Broad Defendants acknowledge that even though they are technically no longer parties to this action, in the interests of preserving the resources of the Court and all parties, they agree to continue to respond to the prior requests for production (which were originally requested in 2013) without the need for the documents to be subpoenaed.
[#538] at 2-3. The Broad Defendants' post-appeal, post-settlement response to the outstanding Requests for Production consists of the privilege logs and documents at issue here. See [#538-3, #538-4, #538-5]. The privilege logs recite the "joint defense privilege, " "common interest doctrine, " and attorney work product as the basis for withholding ...