United States District Court, E.D. Michigan, Southern Division
MEMORANDUM AND ORDER DENYING PLAINTIFF'S MOTION
FOR CONTEMPT (DOC. 45) 
COHN UNITED STATES DISTRICT JUDGE.
a contract case. It has moved sideways rather than forward.
Plaintiff Bio-Behavioral Care Solutions, LLC is suing
defendant Doctors Behavioral Hospital, LLC claiming that
defendant breached a contract (Marketing Agreement) between
the parties in which plaintiff provided management and
consulting services to defendant.
says that it provided the required services under the
Marketing Agreement and defendant has refused to pay. The
complaint (Doc. 1) is in four counts:
Count I - Account Stated
Count II - Breach of Contract
Count III - Unjust Enrichment/Quantum Meruit
Count IV - Promissory Estoppel
filed a one count counterclaim, stating that plaintiff
breached the Marketing Agreement by failing to fulfill its
obligations. (Doc. 3). Both sides seek money damages.
the Court is plaintiff's motion for contempt on the
grounds that defendant has failed to comply with Court
ordered discovery. For the reasons that follow, the motion
will be denied.
after the complaint was filed, plaintiff filed a motion for
summary judgment (Doc. 12) claiming that there is no genuine
issue of material fact that defendant has breached the
Marketing Agreement and owes plaintiff $195, 000.00 in
damages. In response, defendant filed a motion to
strike portions of the affidavit testimony of two individuals
or to compel answers to deposition questions (Doc.
then filed a filed a motion to compel, contending that
discovery requests sent to defendant after it filed its
motion for summary judgment are relevant to plaintiff's
claims for liability and damages. (Doc. 39). The motion to
compel sought several documents in response to
plaintiff's June 30, 2016 discovery request. The Court
granted the motion and directed defendant to produce the
1. Ledgers, spreadsheets, or other writings showing accounts
payable by defendant for years 2012-2015, with redaction of
names other than plaintiffs
2. Copies of tax returns for the same years, and work papers
showing reconciliation between the amounts shown on the
Accounts Payable Ledger and the related deductions and
liabilities on the tax returns.
Court also found that defendant's position in refusing to
produce the requested relevant discovery was not
substantially justified and therefore granted plaintiff's
request for attorney fees and costs in bringing the motion to
compel. (Doc. 43).
date, plaintiff says that defendant has not produced the
ordered discovery. Specifically, plaintiff says that after
the Court's October 28, 2016 order granting its motion to
compel, on December 6, 2016 defendant produced tax returns of
Doctors Development Company, LLC, a different company than
the named defendant-Doctors Behavioral Hospital, LLC-for tax
years ending 2013, 2014, and 2015. Plaintiff also says that
defendant failed to produce any documents showing the
reconciliation between the amounts shown owed to plaintiff on
defendant's Accounts Payable Ledgers and deductions taken
on defendant's federal tax returns.
receiving the responses to the discovery, counsel for
plaintiff advised counsel for defendant that tax returns for
the named defendant were not produced. In response, counsel
for defendant explained that Doctors Development Company, LLC
owned Defendant Doctors Behavioral Hospital, LLC and that no
tax returns had to be filed by the named defendant.
counsel, disputing defendant's contention, wrote to
counsel for defendant pointing out the deficiencies in the
produced documents. The December 14 letter also noted that in
response to questions regarding other entities owned by
Doctors Development Company, LLC, the named defendant Doctors
Behavioral Hospital, LLC was not listed. Plaintiff's
counsel found this curious, to say the least:
...on each of the returns filed by Doctors Development
Company, LLC, Schedule B, question 4, Page 2 of Form 1065
asks the following question:
At the end of the tax year, did the partnership . . . b. Own
directly an interest of 20% or more, or own, directly or
indirectly, an interest of 50% or more in the profit, loss,
or capital in any foreign or domestic partnership (including
an entity treated as a partnership) or in the beneficial
interest of a trust?
The response to this question was checked “No” on
the 2014 and 2015 returns indicating that Doctors Development
Company did not own any interest in another partnership such
as the named defendant Doctors Behavioral Hospital, LLC. On
the 2013 return the response was “Yes” and
referred to Statement 4. Statement 4 identified ...