Clothing store owner found liable to pay cost of documents request

U.S. District Court for the NMI Chief Judge Ramona V. Manglona has found the owner of a Garapan clothing store that burned down last year liable to pay an insurance company the costs of filing a motion to compel the corporation to produce some documents.

Manglona determined that FirstNet Insurance Co. complied with federal and local procedure rules to confer in good faith to obtain discovery without court action.

Manglona found that defendant Zhen Rui Brother Corp. is liable to pay FirstNet with its costs in filing the motion.

“Having granted FirstNet’s motion to compel, the court must impose reasonable expenses, including attorney’s fees, on the party or attorney, or both, who resisted disclosure unless exceptional circumstances exist,” said Manglona in an 11-page written order issued yesterday.

BL Clothing Store, owned by Zhen Rui Brother Corp., burned down in a fire on Oct. 30, 2010.

In March 2011, fire policy insurer FirstNet, through counsel Richard W. Pierce, sued Zhen Rui Brother Corp. for allegedly deliberately setting off the fire so that the owner could claim $404,718.53 in insurance.

Zhen Rui Brother Corp., through counsel Ramon Quichocho, filed a counterclaim against FirstNet, alleging breach of contract, breach of implied covenant of good faith and fair dealing, insurance bad faith, and unfair or deceptive business practices.

FirstNet filed the motion to compel Zhen Rui Brother Corp. to produce all documents, to overrule defendant’s objections to producing its retainer agreement with Quichocho, its tax returns, and to answer the interrogatories.

In Zhen Rui Brother’s opposition, Quichocho asserted that the motion was premature because the parties have not yet met and conferred as required by the Local Rule.

Quichocho argued that its delay in providing discovery was excusable because of an unanticipated extended absence from the CNMI by the corporation’s sole representative, Zheng Biao, and counsel’s need for an interpreter to communicate with Biao.

In her order, Manglona determined that FirstNet made good-faith efforts to confer to resolve the parties’ discovery disputes before filing the motion to compel.

Manglona found that Zhen Rui’s failure even to attempt to carry its burden on its claim of attorney-client privilege, its delayed response to requests for action by FirstNet, and its last-minute objection to interrogatories do not substantially justify Zhen Rui’s resistance to FirstNet’s request for disclosures.

“The court finds that making Zhen Rui pay for FirstNet’s reasonable expenses and attorney’s fees is just,” Manglona said.

The judge ordered FirstNet to submit an accounting of those expenses and fees to the court and serve the accounting on Zhen Rui by Oct. 28, 2011.

Zhen Rui, Manglona said, may file and serve any objection to the accounting by Nov. 4, 2011.