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Burch-Lucich v. Lucich

United States District Court, D. Idaho

January 5, 2015

GARY L. LUCICH; MARCAE LUCICH; MICHELLE LUCICH NIECE; LUCICH FAMILY LIMITED PARTNERSHIP, an Idaho limited partnership; and NORTHWEST FUNDING, LLC, formerly known as LUCICH LLC, an Idaho limited liability company, Defendant.


B. LYNN WINMILL, Chief District Judge.


The Court has before it cross-motions to compel discovery responses, and plaintiff's motion to compel compliance with the Court's Order regarding discovery of certain material. The Court's staff attempted a mediation session that was partially successful, and the parties then briefed their remaining disputes. The motions are now at issue. For the reasons explained below, the Court will grant in part and deny in part each of the cross-motions, and will grant plaintiff's motion to compel compliance with the Court's Order.


Plaintiff Beau Burch-Lucich alleges that his grandparents and aunt collected an inheritance from his father meant for him. He brings this action to recover damages for their fraud.

Beau was Troy Lucich's only child. Troy died in 1998 when Beau was eight years old, although Beau did not realize it because his mother was raising him without any assistance from Troy.

Beau alleges that his grandparents, defendants Gary and Marcae Lucich, knew he was Troy's son, but probated Troy's estate as though he had no children. As a result, Troy's assets were allegedly distributed to (1) Gary and Marcae; (2) Troy's sister, Michelle; (3) Michelle's children; and (4) the Lucich Family Limited Partnership. See Complaint (Dkt. No. 1) at ¶ 18. Beau alleges that all of Troy's assets should have gone to him because, at the time of Troy's death, Troy had no will, no spouse, and no other children.

During the summer of 2004, when Beau was fourteen years old, he wanted to meet his father. After learning that Troy had died six years earlier, he decided to visit his grandparents - Troy's parents - Gary and Marcae Lucich. Part of that visit included a paternity test, which Beau alleges established that Troy was Beau's father. During the visit, Beau's grandparents told him he was entitled to an 11% interest in the Lucich Family Limited Partnership, which was created in 1999, after Troy's death. That 11% interest was allegedly conveyed to Beau during a family meeting. See Complaint, supra, at ¶ 3.

Beau claims he did not learn about the probate of his father's estate until March 2013. To recover his share of Troy's estate, Beau sued (1) his grandparents, Gary and Marcae Lucich; (2) his aunt - Troy's sister - Michelle Lucich; and (3) the Lucich Family Limited Partnership ("Partnership"). Beau alleges seven claims against these defendants: (1) probate fraud under Idaho Code § 15-1-106; (2) conspiracy to commit probate fraud; (3) breach of fiduciary duty; (4) conspiracy to breach "partnership fiduciary duties"; (5) constructive trust; (6) declaratory judgment; and (7) a "partner's direct action" under Idaho Code 53-2-1001.


Plaintiff's Motion to Compel - Bank Records

To pursue his claims, plaintiff needs to value his interest in the Partnership and trace its assets and liabilities. To that end, he has made discovery requests of defendants seeking bank records pertaining to the Partnership. The record at least raises questions concerning whether the Partnership used four bank accounts: (1) two accounts with Idaho Independent Bank, one with an account number ending in 4054 and the other ending in 9295; and (2) an account with U.S. Bank, with an account number ending in 2585; and (3) an account referred to as the Gem account.

The defendants provided information in their possession regarding two of these accounts - those with the Idaho Independent Bank. But there are gaps in the documents provided. The gaps make it difficult for plaintiff to trace the flow of funds and assets into and out of the Partnership. This case is all about tracing - tracing those funds and assets to determine their source and ownership. Plaintiff is entitled to discovery to close the gaps that exist in the financial information.

The defendants represent that they have no more information on these four accounts, and they offered to provide a consent so that plaintiff could obtain whatever information the banks have retained. But the consent offered by defendants was unduly narrow and required plaintiff to identify specific documents. The defendants must provide a full and unconditional consent to allow plaintiff to obtain the following: (1) All information concerning Idaho Independent Bank account number ending in 4054 from the date the account was opened through December 30, 2001; and (2) All information concerning Idaho Independent Bank account number ending in 9295 for the period between March 28, 2011 and May 25, 2011, and the period between June 27, 2011, and December 26, 2011.

With regard to the other two accounts - the U.S. Bank account and the Gem account - the defendants assert that they were never used for any Partnership purpose and were at all times used as the personal account of Gary and Marcae Lucich. But deposition testimony and handwritten documents raise a question whether these two accounts were used for Partnership purposes, and that is sufficient to make them discoverable. For that reason, the Court will order that the defendants (1) turn over any information in their possession concerning the U.S. Bank account number ending in 2585 and the Gem account for the entire period the accounts were open, and (2) provide a full and unconditional consent for plaintiff to obtain from the banks information concerning U.S. Bank account number ending in 2585 and the Gem account, for the entire period the accounts were open.

Plaintiff's Motion to Compel - Columbia Investments

Plaintiff is seeking all documents including tax returns and K-1's relating to Columbia Investments. That entity was originally formed in 1997 by Gary and Marcae Lucich and Buzz Woods, and its principal assets were parcels of real property. In late 1997, the partners gifted a 5% interest to Troy Lucich. When Troy passed away in 1998, Gary Lucich was appointed personal representative of Troy's estate. Gary testified in his deposition that he paid the liabilities of Troy's estate out of his own funds because the estate's assets were not sufficient to cover the liabilities. To reimburse himself for the payment of those liabilities, Gary - in his capacity as personal representative of Troy's estate - directed Buzz Woods to transfer Troy's 5% interest in Columbia Investments to himself and his wife Marcae. The Luciches then transferred the 5% interest to their daughter Michelle.

Plaintiff is seeking all Columbia Investment records, including IRS Form K-1s for each member of the Partnership. A partnership uses IRS Form K-1 to report, for each partner, his or her share of the partnership's income, deductions, credits, etc. The K-1 forms for Columbia Investments would assist plaintiff in valuing Troy's 5% share, and to test Gary Lucich's statement that Troy's 5% share was fair reimbursement for Gary's payment of the estate's debts.

There are indications in the record of an intermingling of funds between Columbia Investments and the Partnership that supports plaintiff's attempts to discover the Columbia documents and the K-1 forms. For example, the Partnership may have been paying Columbia's debts. See Exhibit Z (Dkt. No. 41-28). There are also indications in the record that between 1997 and 2005, Columbia Investments purchased and sold real property worth over two million dollars, and that Gary, Marcae, and Michelle may have contributed their gains from those sales into the Partnership.

Plaintiff is entitled to trace the flow of assets and funds, and to accomplish that tracing, he is entitled to examine the Columbia Investment documents from 1997 to 2005, including all K-1s issued by Columbia and the tax returns requested.

Plaintiff's Motion to Compel - Attorney Fees

The Court finds that no award of attorney fees is warranted here, and will deny plaintiff's request for fees contained in their motion to compel.

Defense Motion to Compel - Privilege Log

The Court turns next to the defendants' motion to compel. The defendants note first that plaintiff has claimed privilege for many documents but never filed a privilege log. Plaintiff recognizes his obligation to produce a privilege log under Rule 26(b)(5)(A), but argues that he is not required to prepare one until defendants initiate the conference required by Local Rule 37.1. That Local Rule applies to "discovery" motions, however, and this is a privilege issue governed by Rule 26(b)(5)(A), which requires the preparation of a privilege log. The Court will so order.

Defense Motion to Compel - Paternity Contention

In Interrogatories 7 & 8, and Request for Production 3, defendants seek all facts, documents, and persons with knowledge, that would support plaintiff's assertion that (1) he is the biological son of Troy Lucich, and (2) defendants had been told by Troy, prior to 2004, that Beau was his son. These are relatively narrow factual discovery requests seeking discoverable material - plaintiff's paternity is a key issue in this case. The requests are not, on their face, seeking any material protected by privilege or the work product doctrine.

Under the proportionality test in Rule 26(b)(2)(C), the benefits of this discovery would be very high while the burden of responding would be comparatively low because the amount of material at issue cannot be large. The plaintiff has provided vague responses to these questions that are insufficient. The Court will compel more detailed answers to these questions.

Defense Motion to Compel - Estate Assets & Liabilities

In Interrogatory 10, defendants seek information from plaintiff concerning the assets and liabilities of Troy's estate. These are fact interrogatories, rather than contention interrogatories, and do not seek on their face any material covered by privilege or the work product doctrine.

In answering this Interrogatory, the plaintiff referred the defendants to the records already produced to calculate the estate's assets and liabilities. Under Rule 33(d), where the burden of sorting through a mass of business records to answer a fact interrogatory is substantially the same for either party, the responding party may answer by identifying those records and making them available for the responding party. Autex North America Inc.v. Mitchell Intern., Inc., 2014 WL 4961437 (S.D.Cal. 2014). Here the burden of finding the answer in the assembled discovery would be roughly the same for either party. The defendant Gary Lucich was the personal representative of the estate and so was positioned to have existing knowledge about the estate's assets and liabilities. Thus, the Court finds that Rule 33(d) governs here, and the plaintiff's answer is sufficient.

Defense Motion to Compel - Forgery Claim

In interrogatory 11 and request for production 15, defendants seek discovery concerning the plaintiff's allegations that documents were forged by defendants or Sunny Lucich. These requests seek discoverable information, and the interrogatory questions are contention interrogatories authorized by Rule 33(a)(2), as discussed above, and their collection by plaintiff's counsel will not implicate the work protect doctrine.

Turning to the proportionality test in Rule 26(b)(2)(C), the benefit of having the forgeries identified is very high, and the burden would be minimal, as the requests do not ask for a large amount of material. Once again, plaintiff invokes Rule 33(d) by referring defendants to the documents already produced in discovery. But this time - unlike the case with the assets and liabilities of Troy's estate - the burden of finding an answer is not shared equally. The defendants cannot search those records and find forgeries - they depend on the plaintiff to identify the forgeries, and then the defendants can have their ...

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