Three consolidated disputes among members and former members of a closely held medical corporation reached the Superior Court on a discovery motion. The central disagreements involved alleged freeze-out of certain members, wage claims, and counterclaims regarding regulatory compliance and payments made within the company.
The court ordered production of state and federal tax returns for two defendants covering 2008 through 2014, finding that the plaintiff satisfied the heightened standard for tax return discovery by demonstrating the returns could reveal payments at issue in a counterclaim and shed light on how certain receipts were treated relative to wage claims. The court also required the defendants to produce the company’s general ledger updated to the current date in native format, concluding the request was neither unduly burdensome nor calculated to cause undue prejudice.
However, the court denied the plaintiff’s request for internal communications between defendants and their FDA compliance consultant on work product grounds. Although the plaintiff claimed substantial need to defend against claims that he caused regulatory deficiencies, the court found he possessed sufficient information from the FDA’s letter itself to rebut those assertions and therefore lacked adequate justification to overcome the privilege.
The full text of the opinion follows below. Slip opinions are subject to formal revision; the official version is published in the official reports.
COMMONWEALTH OF MASSACHUSETTS
SUFFOLK, ss. SUPERIOR COURT
SUCV2014-3509
BRYAN ABRANO, BRIDGET RODRIGUE, and DENNON RODRIGUE
Plaintiffs
vs.
FRANK ABRANO, KIM ABRANO, EDWARD HOLZEK and GARY TRAINOR
Defendants
CONSOLIDATED WITH SUCV2015-1339
LYMOL MEDICAL CORPRATION,
Plaintiff,
vs.
BRYAN ABRANO, BRIDGET RODRIGUE and DENNON RODRIGUE,
Defendants
CONSOLIDATED WITH SUCV2015-1367
BRYAN ABRANO, and BRIDGET RODRIGUE ,
on behalf of LYMOL MEDICAL CORPORATION,
Plaintiffs and Counterclaim-Defendants
FRANK ABRANO, KIM ABRANO, EDWARD HOLZEK,
GARY TRAINOR, and LYMOLD MEDICAL CORPORATION,
Defendants and Counterclaim-Plaintiffs
MEMORANDUM OF DECISION AND ORDER
ON PLAINTIFF BRYAN ABRANO’S MOTION
TO COMPEL PRODUCTION OF DOCMENTS
These three consolidated cases arise out of disputes among members and former members of a closely held corporation. The matter is now before the Court on a Motion by plaintiff Bryan Abrano (Bryan) to Compel production of certain classes of documents from Lymol Medical Corporation (the Company ) as well as Kim Abrano (Kim) and Frank Abrano (Frank) (collectively, the defendants). After hearing this Court rules as follows:
- State and Federal Tax returns for Frank and Kim for the Years 2008-2014: This Court recognizes that tax returns are subject to a more stringent test for assessing discoverability. In this Court’s view, however, the plaintiff has satisfied this higher standard. Specifically, the tax returns may yield information regarding certain payments that were made to Frank which are at issue in his counterclaim. They may also shed light on how Kim treated payments that she received from Bryan, such payments being relevant to Bryan’s wage claim. Accordingly, the Motion is ALLLOWED as to these returns.
- The Company’s General Ledger: Defendants have produced the Company’s general ledger for dates before June 2014. Plaintiff seeks to have that updated to the current date, all in native format. Plaintiff seeks that information to support Bryan’s and plaintiff Bridge Rrodrigue’s freeze out claims as well as the derivative claim that Bryan asserts on behalf of the Company – specifically, the damages and equitable relief sought in connection with those claims. This Court concludes that this request is not unduly burdensome and is reasonably calculated to lead to admissible evidence. Accordingly, the Motion is ALLOWED as to the current general ledger, which shall be produced in native format.
- Defendants’ Communications with Parexel Regarding an FDA Investigation: After this litigation began, the Company hired Parexel to respond to a letter from the FDA citing the Company for certain regulatory deficiencies. Defendants contend that these alleged deficiencies occurred as a result of Bryan’s actions when he was with the Company. Defendants have already produced all of Parexel’s and the Company’s communications with the FDA but object to internal communications between the defendants and Parexel on grounds of work product. The plaintiffs do not dispute that the communications come within that qualified privilege but contend that they have a “substantial need” for the information in order to defend against the Company’s claims [1] This Court disagrees. Bryan has all the information that he rebut the defendants’ assertion that he was responsible for the deficiencies that the FDA cited in its letter. Accordingly, this request is DENIED.
SO ORDERED.
_________________________________
Janet L. Sanders
Justice of the Superior Court
Dated: July 13, 2017
[1] Since there is no real dispute that the documents withheld are subject to a work product privilege, this Court sees no need for a privilege log.