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Civil Procedure Keyed to Spencer
American Roller Co., LLC v. Foster-Adams Leasing, LLP
Facts
American Roller Co., LLC (Plaintiff), contracted to buy Champion Roller, LLC (Champion) from Russell M. Foster, Larry H. Adams, Foster-Adams Leasing, LLP, and Foster-Adams LLP (Defendants). CM Acquisitions (CM), an investor in Plaintiff’s parent company, acted as guarantor. CM negotiated the purchase of Pillar Industries by Pillar Induction, in which it is also an investor. Plaintiff sued Defendants for misrepresentation and breach of warranty. Defendants counterclaimed for payments already due. During discovery Defendants sought information related to the settlement of a dispute between CM and Pillar Industries, even though neither was a party. Defendants argued Plaintiff habitually bought companies and then sued in bad faith to get better terms. Specifically, Defendants hoped to depose the former president of Pillar Industries, Mark Skiba, in order to find evidence of Plaintiff’s business practices and motivations for suing. Defendants thought such discovery could provide grounds for further claims against Plaintiff. Plaintiff sought to block the discovery on the ground that the Pillar transaction was not relevant, because Skiba had no involvement with Plaintiff or Champion, nor did Pillar Industries. Plaintiff asked the court for a protective order prohibiting discovery related to the Pillar deal.
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