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Heartland Materials, Inc. v. Warren Paving, Inc.

United States District Court, W.D. Kentucky, Paducah Division

December 30, 2019



          Lanny King, Magistrate Judge.

         Chief Judge Greg N. Stivers referred this matter to Magistrate Judge Lanny King for resolution of all litigation planning issues, entry of scheduling orders, consideration of amendments thereto, and resolution of all non-dispositive matters, including discovery issues. (Docket # 16). This matter was later reassigned to Senior Judge Thomas B. Russell. (Docket # 66).

         Before the Court is a Motion to Produce Production Numbers, filed by Plaintiffs Heartland Materials, Inc., William R. Frazer, LLC, and Southern Aggregate Distributors, Inc. (Docket # 131). Defendants Warren Paving, Inc. and Slats Lucas, Inc. have filed a Response (Docket # 133) and Plaintiffs have submitted a Reply. (Docket # 134). Fully briefed, this matter is ripe for adjudication.

         For the reasons described herein, Plaintiffs' Motion to Produce Production Numbers is DENIED. (Docket # 131).


         A full recitation of the factual and procedural background of this case may be found in Judge Russell's Memorandum Opinion and Order on the parties' cross-motions for summary judgment (Docket # 67), Heartland Materials Inc. v. Warren Paving, Inc., No. 5:16-CV-00146-TBR, 2018 WL 2324075, at *1 (W.D. Ky. May 22, 2018). On May 22, 2018, this Court granted Plaintiffs' motion for summary judgment regarding their request for declaratory judgment and their claim for breach of the Amended Assignment Contract due to Defendants' failure to make royalty payments after June 2016. Under the Amended Assignment Contract, Defendants must pay $0.2667 per ton of limestone mined from the property that is subject to the agreement. Id. at *3.

         In the Current Litigation, this Court granted summary judgment to Plaintiffs on their breach of contract claim with regard to the lack of royalty payments since June 2016. The Court also held that “Warren Paving and Slats Lucas are contractually obligated to pay royalties for all limestone mined and shipped or loaded for transport from the Property pursuant to the terms of the Amended Assignment Contract and the royalty obligation enumerated therein.” (Docket #67 at 28). This Court did not grant summary judgment on Plaintiffs' claim that Defendants breached the contract by underpaying royalties prior to June 2016. (Id. at 26). After this Court granted partial summary judgment, Plaintiffs filed a motion to dismiss their remaining claim for underpayment of royalties. (Docket # 75). This Court granted Plaintiffs' motion to dismiss. (Docket # 84).[1]

         Then, on April 11, 2019, this Court ordered that Defendants must pay Plaintiffs compensatory damages, legal fees, pre-judgment interest, and post judgment interest as explained at (Docket # 109); Heartland Materials, Inc., No. 5:16-CV-00146-TBR, 2019 WL 1576990, at *11 (W.D. Ky. Apr. 11, 2019). On May 10, 2019, Defendants filed their notice of appeal of: (1) the Court's May 22, 2018 memorandum opinion and order (Docket # 67), and (2) the Court's April 11, 2019 memorandum opinion and order (Docket # 109). (Docket # 127).

         On June 10, 2019, this Court entered an Order requiring Defendants to provide bond or security in the amount of $3, 054, 254.53 in order to obtain a stay of execution of judgment. (Docket # 127). On June 14, 2019, in compliance with Judge Russell's Order, the Defendants filed a supersedeas bond (the “Bond”) with the Court in the amount of $3, 054, 254.53. On June 19, 2019, the Court entered an Order allowing Plaintiffs until June 21, 2019 to file any objections regarding perceived deficiencies in the execution of the Bond document or concerns regarding its future enforceability. (Docket # 129). Plaintiffs did not file any objections. The Court granted Defendants' Motion to Approve Security and Stay Execution of Judgment (Docket # 128). (Docket # 130). In the same Order, the Court approved the Bond, stayed execution of any judgments pending disposition of any appeal by the Sixth Circuit and/or the Supreme Court, and denied Plaintiff's Motions for Writ of Execution and Garnishment (Docket # 115, Docket # 119). (Docket # 130).

         Now pending before the Court is Plaintiffs' Motion to Produce Production Numbers (Docket # 131). Therein, Plaintiffs argue that Defendants should be required to produce records detailing the monthly production of the quarry at the core of this dispute, so that they might account for payments owed while the appeal is pending at the Sixth Circuit. (Docket # 131-1 at 2). In support, Plaintiffs argue that Defendants have produced such information after discussions between the parties in the past[2], that Defendants now refuse to produce the continued reports, and that they are entitled to the information, so that they may verify the adequacy of the Bond. (Id. at 6). Further, Plaintiffs allege that this process would avoid “a long delay in gathering production date to determine the amount that will then be owed.” (Id.). They state further that “[I]t is just easier and simpler, and does no harm to the Appellant [Defendants], to process these numbers as they are available rather than to wait to the very end.” (Id.). Plaintiffs argue that this dispute does not concern the merits of the appeal and thus, the reports should be produced. (Id. at 5).

         Defendants dispute Plaintiffs contentions. First, Defendants argue that the appeal has transferred jurisdiction to the Sixth Circuit, meaning that the Court may not address this issue. (Docket # 133 at 3). “While the district court may retain limited jurisdiction to decide certain collateral matters, such as fees, costs, and sanctions, it is divested of jurisdiction over the substantive matters in a case.” (Id.) (citing Fieldturf, Inc. v. Sw. Recreational Indus., Inc., 212 F.R.D. 341, 343 (E.D. Ky. 2003); ATAC Corp. v. Arthur Treacher's Inc., 280 F.3d 1091, 1102 (6th Cir. 2002)). The further argue that any finding in Plaintiffs' favor would be supplemental findings on substantive issues, which would violate the automatic stay put into place upon the filing of appeal by Federal Rule of Civil Procedure 62(b). They contend that any post-judgment discovery under Federal Rule of Civil Procedure 69(a)(2) would violate the automatic stay put into place upon filing of the Bond under Rule 62. (Docket # 133 at 4-5).

         Legal Standard

         The Federal Rules of Civil Procedure provide a mechanism for discovery by a creditor in the post-judgment stage of litigation. Rule 69(a)(2) states that “in aid of the judgment or execution, the judgment creditor … may obtain discovery from any person-including the judgment debtor-as provided in these rules or by the procedure of the state where the court is located.” FED.R.CIV.P.69(a)(2). Compared to discovery during litigation, post-judgment discovery is “very broad.” United States v. Conces, 507 F.3d 1028, 1040 (6th Cir. 2007) (citations omitted).

         However, Federal Rule of Civil Procedure 62(b) operates to automatically stay a case upon filing of an appeal. FED.R.CIV.P.62(b). Typically, “[t]he filing of a timely and sufficient notice of appeal in a district court has the effect of immediately transferring jurisdiction from the district court to the court of appeals.” In re Chandler, 902 F.2d 43 (Table), 43 (Fed. Cir. ...

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