lead to the discovery of admissible evidence.”).

The second subset of records pertains to an account listed in the name of “Malgorzata
Rybska: DBA Malgorzata Rybska Quality Construction.” (Ms. Rybska is denoted as “owner”
and Mr. Kawa is an “authorized signer”). The addresses given for “Malgorzata Rybska: DBA
Malgorzata Rybska Quality Construction” and “Marek Kawa: DBA Marek Kawa Quality
Construction” are identical—4207 Newland in Harwood Heights, Illinois. Given that the
Laborers’ Funds are asserting that Defendant Quality Construction, Inc. has not paid all lawfully
owed union contributions, this second subset of records also seems squarely relevant.

At the March 25 hearing, counsel for the Objectors contended that Ms. Rybska has her
own property management business, which conducts business in a similar line of work as Mr.
Kawa’s, but that Ms. Rybska’s business is not properly subject to union-related contributions.
That may be true—and the Court takes no position on that assertion. Of relevance here,
however, is the fact that Ms. Rybska’s business is also entitled “Quality Construction” and
appears to be based in the same location as Mr. Kawa’s. Given that the Laborers’ Funds want to
determine whether Defendant has been shirking its union contributions, the records of
“Malgorzata Rybska: DBA Malgorzata Rybska Quality Construction” are germane. In this
regard, it bears note that the Objectors previously represented to Judge Manning that the
subpoena in question was overbroad because it covered “accounts held by Marek Kawa’s wife,
Malgorzata Rybska, on which Marek Kawa is an authorized signer. These accounts have no
connection to Quality General Construction, Inc.” (D.E. 17 at 1.) Further investigation may help
reveal whether this statement was correct or not (again, the Court takes no position), but for the

present purposes of resolving this discovery dispute, the fact that one of the accounts held by Ms.



in September 2003, despite apparent in-hand service of the rule to show cause (D.E. 13), which
required Judge Manning to order the U.S. Marshals Service “to arrest Marek Kawa and bring him
before the Court at the earliest possible time.” (D.E. 14.) In conjunction with that order, Judge
Manning also issued a corresponding writ of body attachment as to Mr. Kawa. (D.E. 14.)

Mr. Kawa came to court “voluntarily” after learning of the outstanding writ of body
attachment.! On October 2003, Mr. Kawa came to court and agreed to submit books and records
for an audit as previously ordered. (D.E. 21 at 2.) He also then “advised the Court and
Plaintiffs’ counsel that Quality General Construction had not performed any covered work and
submitted books and records to Plaintiffs’ counsel that Mr. Kawa represented as the complete
records responsive to the Court’s Order.” (/d.)

As explained above, there is meaningful circumstantial evidence casting at least some
doubt on whether Mr. Kawa’s representation was correct. That factor, combined with Mr.
Kawa’s prior behavior in this case, counsels against expecting the Laborers’ Funds to rely on the
Objectors’ present contention that the bank records at issue are irrelevant to Plaintiffs’ suit.

The final subset of documents is comprised of five sheets of paper relating to an account
entitled “Betancourt Realty Network FBO Marek Kawa.” The Objectors’ objection, by its terms,
does not seem applicable to these documents, because this final account is not an “accoun[t] held
by Marek Kawa’s wife, Malgorzata Rybska, on which Marek Kawa is an authorized signer.”

(D.E. 17 at 1.) That fact, and the fact that the address for the business is also listed as 4207

! The docket is unclear as to whether Mr. Kawa came “voluntarily” or was arrested, but
at the March 25, 2004, status, it was represented that Mr. Kawa “did voluntarily respond after
being alerted to the issuance of the body attachment.” (03/25/04 Hr’g Tr. at 2.) The Court will
resolve this ambiguity in Mr. Kawa’s favor.


DE. 1.)

At the March 25, 2004 status hearing, counsel for the Objectors agreed that the in camera
review promised by Judge Manning required an attempt to carve out documents relating to
matters that were clearly personal to Mr. Kawa and Ms. Rybska and therefore are unrelated to the
instant dispute. (3/25/04 Hr’g Tr. at 1-2.) This Court agreed to complete the in camera review
to see what documents, if any, could reasonably be screened out as “personal only,” consistent
with the liberal discovery policies underlying the federal civil litigation system.

I. Ruling on the Motion to Quash

Having reviewed the records in question, the Court notes that the records—mostly
printouts of computerized bank account summaries in the form of monthly statements—do not
contain details such as the origin of deposits or destination of withdrawals or copies of checks.
(The bank is prepared to provide copies of checks—but, as is typically the case with bank
subpoenas, the bank instructs that retrieval and copying will take substantial time that warrants
prepaid compensation). Nothing in the bank documents at issue identifies “clearly personal”
matters such as perhaps checks to healthcare or psychiatric care providers. Thus, the nature of
the documents at issue militates against a “clearly personal” carve-out from records to be seen by
the Laborers’ Funds, at least when considered in light of the other factors in the case, as
explained below.

There are four subsets of records. The first subset relates to an account listed in the name
of “Marek Kawa: DBA Marek Kawa Quality Construction.” These records seem squarely
relevant, given the issues in the suit. See generally Fed. R. Civ. P 26(b)(1) (“Relevant

information need not be admissible at the trial if the discovery appears reasonably calculated to


Rybska is entitled “Malgorzata Rybska: DBA Malgorzata Rybska Quality Construction” stands
in at least some tension with the Objectors’ prior representation. In addition, since the time that
the Objectors asserted to Judge Manning that accounts held by Ms. Rybska “have no connection
to Quality General Construction, Inc.” (id.), Ms. Rybska has since been identified (in a joint
status report to this Court dated March 22, 2004, that was signed by Defendant’s counsel) as “the
secretary of Quality General Construction, Inc.” (D.E. 21 at 3.) This too counsels in favor of
allowing the Laborers’ Funds to see the second subset of bank records.

A third subset of records relates to what appears to be a checking account held in the
names of both Mr. Kawa and Ms. Rybska. A quick review of the monthly statements for this
account, when compared with the records for the account held in the name of “Malgorzata
Rybska: DBA Malgorzata Rybska Quality Construction,” indicates that on at least three
occasions, involving sums of $15,000, $10,000, and $10,000, respectively, there are withdrawals
from the “Malgorzata Rybska: DBA Malgorzata Rybska Quality Construction” account and
deposits on the same respective dates and in the same respective amounts in the Kawa/Rybska
account. (The Court stopped its comparison after three such corresponding entries were quickly
found in the months of August and September 2002; there may or may not be more). These three
incidents may ultimately prove to be coincidences, in that the monies coming from the
“Malgorzata Rybska: DBA Malgorzata Rybska Quality Construction” account were not the same
monies that went into the Kawa/Rybska account. Or, perhaps there is nothing illicit about taking
money from the “Malgorzata Rybska: DBA Malgorzata Rybska Quality Construction” account
and transferring it to the Kawa/Rybska account. Again, the Court need not resolve any of those

issues to resolve the pending discovery dispute. There is sufficient circumstantial evidence of


Newland in Harwood Heights, counsels against precluding the Laborers’ Funds from seeing the
records on any basis of alleged overbreadth of the subpoena.

Accordingly, for the reasons listed above, the Objectors’ Motion to Quash is respectfully
denied. See generally Swierkiewicz v. Sorema N.A., 122 8. Ct. 992, 998 (2002) (noting the
“tiberal discovery rules” around which the federal civil litigation system is structured).

As the Court indicated at the March 25, 2004 hearing, if the Objectors elect to do so, they
may move for entry of a protective order if they believe their privacy interests or personal affairs
are impermissibly compromised by this discovery. The Objectors are respectfully counseled,
however, that the Seventh Circuit has repeatedly instructed against entry of unwarranted
protective orders. See, e.g., Citizens First Nat’l Bank of Princeton v. Cincinnati Ins. Co., 178
F.3d 943, 946 (7th Cir. 1999). Any request for entry of a protective order will need to be

evaluated against the applicable standards.

Counsel for the Objectors are instructed to pick-up the copies of the subpoenaed
documents and to promptly turn them over to the Plaintiffs within ten days from entry of the
order corresponding to this opinion. See generally Simmons v. City of Racine, PFC, 37 F.3d 325,

327-28 (7th Cir. 1994); E.H. Reise v. Bd. of Regents of the Univ. of Wisconsin Sys., 957 F.2d 293,

Lh,

Mark Filip i
United States District Judge
Northern District of Illinois

295-96 (7th Cir. 1992).

Enter: APR 2 0:


Minute Cider Form (06/97)

United States District Court, Northern District of Hlinois

me of Assigned Jud ili Sitting Judge if Other
sai Magistrate Judge Mark Filip than assigned Judge
CASE NUMBER 02 C 7374 DATE 4/2/2004
|
CASE Laborers’ Pension Fund,etc.,et al vs. Quality General Construction
TITLE

of the motion being presented.

[In the following box (a) indicate the party filing the motion, e.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature

QFRCP4(m) CO Local Rule 41.

(10) MH [Other docket entry] ENTER MEMORANDUM OPINION AND ORDER: Counsel for Defendant
and Objectors has confirmed in writing that Defendant does not intend to appeal this Court’s March 29,
2004, denial of Defendant’s request to transfer this case back to Judge Manning. Accordingly, this Court
issues its ruling and denies Objectors’ Motion to Quash Plaintiffs’ Subpoena for bank records. Counsel
for the Objectors is respectfully instructed to retrieve copies of the records in question and to provide them
to Plaintiffs Laborers’ Funds within tens days of entry of this Order.

MOTION:

DOCKET ENTRY:

(1) oO Filed motion of [ use listing in “Motion” box above.]}

(2) oO Brief in support of motion due

(3) oO Answer brief to motion due___. Reply to answer brief due__.

(4) QO Ruling/Hearing on___ set for at

(5) Oo Status hearing(held/continued to} [set for/re-set for] on set for at

(6) oO Pretrial conference[held/continued to] [set for/re-set for] on setfor ss at_
(7) Q Trial[set for/re-set for]on ss at_—

(8) oO [Bench/Jury trial] [Hearing] held/continuedto__aat.

(9) ia This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to}

1 OFRCP41(a)\(1) OO FRCP41(a)(2).

No notices required, advised in open court

No notices required,

Notices mailed by judge’s staff.

Notified counsel by telephone.

wv | Docketing to mail notices

Mail AO 450 form.

Copy to judge/magistrate judge.

courtroom
TBK doputy’s

(al af [For further detail see order attached to the original minute order.]
r

initials

Date/time received in*
central Clerk’s Office:

Document
Number
umber of notices
% “yey
AP. R a eh
date docketed
“
dockets el fists a 5

date mailed notice

mailing deputy initials



commingling to justify letting the Laborers’ Funds have access to the documents at issue, given
the opportunities and financial incentives for a union-affiliated company to use a “shadow
company” to avoid union-related contributions if possible. The impropriety of precluding the
Plaintiffs from even seeing these records is confirmed by the history of the Defendant’s behavior
in this case. In summary, the Laborers’ Funds are entitled to see the records from the
Kawa/Rybska account so as to help determine whether the Objectors were commingling and
transferring money to avoid the union-related obligations of the Defendant.

One further point about the Kawa/Rybska account deserves mention. The account
statements for this account reflect that in March 2003, there was a $376,000 deposit into this
account and a $200,000 withdrawal from this account. In and of itself, that transaction history
proves nothing, but common sense counsels that most people do not typically have deposits and
withdrawals of this size in a “personal only” checking account. The transactions may involve
something completely unrelated to any business of the Objectors, but the very size of these
transactions raises issues about whether the Kawa/Rybska account is being used to conduct
commercial affairs and provides further reason not to preclude Plaintiffs from seeing the
Kawa/Rybska records.

As alluded to above, Mr. Kawa’s past behavior (on behalf of Defendant, Quality General
Construction, Inc.), demonstrates what at best can be described as his indifference to legal
obligations—and helps to inform whether the Laborers’ Funds should be precluded from even
seeing the records at issue. In July, 2003, Judge Manning was required to issue a rule to show
cause why Marek Kawa “should not be held in contempt of court for failure to submit books and

records to an audit.” (D.E. 12.) Mr. Kawa failed to appear as required on the rule to show cause



IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

DOCKETED

APR - 2 2004

LABORERS’ PENSION FUND and
LABORERS’ WELFARE FUND OF THE
HEALTH AND WELFARE DEPARTMENT
OF THE CONSTRUCTION AND GENERAL
LABORERS’ DISTRICT COUNCIL OF
CHICAGO AND VICINITY, and JAMES S.
JORGENSEN, Administrator of the Funds,
Case No. 02 C 7374
Plaintiffs,
Judge Mark Filip “%
¥. APR2

QUALITY GENERAL CONSTRUCTION,
INC., an Ilinois corporation,

SSS ES SS SH SS SH SS SY

Defendant.

MEMORANDUM OPINION AND ORDER

Before the Court is the motion of Defendant Quality General Construction, Inc., to quash
Plaintiffs’ third-party subpoena to Mid-America Bank in Clarendon Hills, Illinois. Prior to
transfer of this case, the Honorable Blanche M. Manning of the United States District Court for
the Northern District of Illinois agreed to conduct an in camera review of documents responsive
to the subpoena so as to address an overbreadth objection made to the subpoena. This Court has
conducted the in camera review, and the Court has found that the documents are properly
discoverable by Plaintiffs. Accordingly, Defendant’s overbreadth objection is rejected and

Defendant’s motion to quash the subpoena is denied.

L Procedural History

The relevant procedural history of this case was set forth in this Court’s opinion of March

29, 2004—familiarity with which is presumed. As for the pending motion, and in summary, on

Q5


January 15, 2004, Defendant Quality General Construction, Inc. filed a motion to quash
Plaintiffs’ third-party subpoena to Mid-America Bank. (D.E. 17.) That subpoena commanded
production of “[a]ll records including bank statements and canceled checks for any accounts held
by Quality General Construction, Inc. a/k/a Quality Construction and/or Marek Kawa from the
period of June 18, 2002 forward.” (/d. at 1.) Defendant; Marek Kawa, Defendant’s president and
apparent owner; and Malgorzata Rybska, Secretary of Defendant and Mr. Kawa’s wife (all three
collectively, “Objectors”), contend that the subpoena is overbroad because it fails to distinguish
between corporate accounts and personal accounts of Mr. Kawa. (/d.) As a result, the Objectors
contend, the subpoena covers “accounts held by Marek Kawa’s wife, Malgorzata Rybska, on
which Marek Kawa is an authorized signer. These accounts have no connection to Quality
General Construction, Inc.” (/d.) In January 2004, in response to the Objectors’
relevance/overbreadth objection, Judge Manning ordered that “[t]he response of third party
recipient Mid America Bank to Plaintiff's subpoena duces tecum . . . shall be delivered to this
Court’s chambers for an in camera inspection... .” (D.E. 18.)

At a status hearing on March 25, 2004, counsel for the Objectors renewed their objection.
Counsel for Plaintiffs (two union pension and welfare funds and the administrator of those funds,
collectively “Plaintiffs” or “Laborers’ Funds”) responded that Plaintiffs want the documents
because the Laborers’ Funds believe that there are substantial signs that the Defendant and the
other Objectors have been commingling monies and using their various bank accounts so as to
avoid union contributions lawfully owed. (3/25/04 Hr’g Tr. at 2-3.) The documents in question
may produce evidence of such commingling and evasion, Plaintiffs contend, which is relevant to

this suit, which involves whether any union contributions are owed. (Jd. at 2-3, 6-7; see also