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Goldstein v. Colborne Acquisition Co., LLC

United States District Court for the Northern District of Illinois, Eastern Division

June 1, 2012, Decided; June 1, 2012, Filed

Case No. 10 C 6861

Opinion

 [*933]  MEMORANDUM OPINION AND ORDER

Before the Court is Defendants' Motion for a Protective Order and Plaintiff's Cross-Motion/Response  [**2] to Compel. For the reasons contained herein, the Plaintiff's Motion to Compel is granted. The Motions of Defendant Colborne Acquisition Company, LLC ("CAC") and Individual Defendants Richard Hoskins III's ("R3"), Richard Hoskins IV ("R4") and Lysa Hoskins ("Lysa") for a Protective Order is denied.

I. BACKGROUND

Familiarity with the Court's previous background statements in its rulings of March 11, 2011 and July 27, 2011 is presumed. The Court therefore, provides only a minimum of facts necessary to this opinion.

R3, R4 and Lysa were all shareholders in Colborne Corp. ("Colborne 1"). R3 was the president and owner (90 percent shareholder) of Colborne 1. R4 and Lysa (who are siblings and the daughter of R3) each owned 5 percent and were officers of Colborne 1. In 2008, a New Jersey court entered judgment against Colborne 1 for $538,167.08 for a former Colborne 1 customer, Mamacita, Inc. ("Mamacita"). After appeal and further court proceedings, Plaintiff says, the judgment tripled. (R3 denied this alleged fact in his answer, but enunciated no basis for the denial.) Mamacita pursued Colborne 1 to the Lake County, Illinois courts in an effort to collect, but was thwarted by a Uniform Commercial  [**3] Code sale of all Colborne 1 assets to Colborne Acquisition Company, LLC ("Colborne 2") on May 19, 2009. R3 consented in writing to the sale of Colborne 1's assets.

Mamacita filed the instant lawsuit on October 25, 2010, alleging the UCC sale was a fraudulent effort to avoid judgment. On November 29, 2010, Colborne 1 filed for Chapter 7 bankruptcy. The Bankruptcy Trustee stepped into Mamacita's shoes as Plaintiff. The Trustee has been attempting, both in Bankruptcy Court and here, to obtain the pre-UCC sale company e-mails of Colborne 1. Colborne 2, as purchaser of Colborne 1's assets, is in possession of the e-mails. See Colborne 2's Reply, 7 (stating "there is no contractual provision whereby [Colborne 2] agreed that pre-UCC sale emails would remain the property of [Colborne 1]. To the contrary, the Bill of Sale provides that all assets were sold to [Colborne 2], and that [Colborne 2] has full right and title to those assets.").

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873 F. Supp. 2d 932 *; 2012 U.S. Dist. LEXIS 75743 **

ILENE F. GOLDSTEIN, not individually. but solely in her capacity as Trustee of the Estate of Cold 2005, Inc., Plaintiff, v. COLBORNE ACQUISITION COMPANY, LLC, d/b/a COLBORNE FOODBOTICS, LLC, an Illinois Limited Liability Company; RICHARD HOSKINS III; LINDA HOSKINS; RICHARD HOSKINS IV; LYSA HOSKINS; and HOSKINS PROPERTY, LLC, a Delaware Corporation, Defendants.

Subsequent History: Motion denied by Goldstein v. Colborne Acquisition Co., LLC, 2012 U.S. Dist. LEXIS 108960 (N.D. Ill., Aug. 3, 2012)

Prior History: Stein v. Colborne Acquisition Co., LLC, 2011 U.S. Dist. LEXIS 82321 (N.D. Ill., July 27, 2011)

CORE TERMS

e-mails, confidential, waived, attorney-client, factors, Defendants', discovery, disclose, parties, disclosure, messages, motion for a protective order, third party, communications, monitored

Civil Procedure, Discovery, Privileged Communications, Attorney-Client Privilege, Evidence, Burdens of Proof, Allocation, Privileges, Attorney-Client Privilege, General Overview, Waiver, Sanctions, Misconduct & Unethical Behavior, Discovery & Disclosure, Disclosure, Sanctions, Misconduct During Discovery