Court Opinion

ID: 4277316
Source: CourtListenerOpinion
Date Created: 2018-05-22 15:00:35.187598+00
Date Added: 2024-06-11T14:34:08.638560
License: Public Domain

Case: 17-12177   Date Filed: 05/22/2018   Page: 1 of 4

                                                     [DO NOT PUBLISH]

            IN THE UNITED STATES COURT OF APPEALS

                    FOR THE ELEVENTH CIRCUIT
                      ________________________

                            No. 17-12177
                      ________________________

        D.C. Docket Nos. 1:16-cv-03719-LMM; 15-bkc-64711-MGD

IN RE: HAMPTON ISLAND OWNERS’ ASSOCIATION, INC.

                                              Debtor,
_____________________________________________________

HAMPTON ISLAND HOLDINGS, LLC,
THE HAMPTON ISLAND CLUB, LLC,
BLUE HERON INVESTMENTS, LLC,
FULCRUM LOAN HOLDINGS, LLC,
HAMPTON ISLAND CLUB, LLC,
HAMPTON ISLAND, LLC,
LIBERTY CAPITAL, LLC,
REFLECTIONS HOUSE, LLC,
TURTLE LAKE HOLDINGS, LLC,

                                                     Plaintiffs - Appellants,

HAMPTON LAND HOLDINGS, LLC,

                                                     Plaintiff,

                                  versus

LEE BURTON,
THOMAS BURTON,
                Case: 17-12177        Date Filed: 05/22/2018      Page: 2 of 4

SPOTTAIL LANDING, LLC,
REBECCA TALLMAN,
EDWARD TALLMAN, et al.,

                                                                   Defendants - Appellees.

                               ________________________

                      Appeal from the United States District Court
                         for the Northern District of Georgia
                            ________________________

                                       (May 22, 2018)

Before ROSENBAUM and JILL PRYOR, Circuit Judges, and BARTLE, * District
Judge.

PER CURIAM:

       This appeal arises out of a protracted, multi-fora dispute between a number

of property owners (the “Property Owners,” who are appellees in this case) on

Hampton Island, a residential real estate development on the Georgia coast, and

real estate developer Ron Leventhal (who is not a party to this appeal), along with

several entities he owns and controls, including Hampton Island Owner’s

Association, Inc. (“HIOA,” also a non-party) and the appellants in this case

(together, the “Leventhal entities”). In the midst of state-court litigation among

these parties, HIOA filed Chapter 11 bankruptcy. Seeking to identify HIOA’s

assets and liabilities, particularly amounts owed to or by the Leventhal entities, the

Property Owners sought discovery under Bankruptcy Rule 2004 from the
       *
        Honorable Harvey Bartle III, United States District Judge for the Eastern District of
Pennsylvania, sitting by designation.
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Leventhal entities. See Fed. R. Bankr. P. 2004 (authorizing the bankruptcy court to

“order the examination of any entity” by “any party in interest” so long as the

examination “relate[s] only to the acts, conduct, or property or to the liabilities and

financial condition of the debtor, or to any matter which may affect the

administration of the debtor’s estate, or to the debtor’s right to a discharge”). The

bankruptcy court granted the Property Owners’ discovery requests. After finding

that the Leventhal entities failed to comply with its order compelling production of

certain documents, the bankruptcy court imposed sanctions, jointly and severally,

on the Leventhal entities. The Leventhal entities appealed the sanctions order to

the district court, which affirmed. See Order Affirming Sanctions Award,

Hampton Island Holdings, LLC et al. v. Burton et al., No. 1:16-CV-03719-LMM

(N.D. Ga. April 12, 2017). The Leventhal entities then appealed to this Court.

      After careful review of the record, and with the benefit of oral argument, we

agree with the district court’s analysis and adopt its reasoning as our own, with the

exception of a portion of Part III.c of the district court’s order that addresses the

Leventhal entities’ argument that the bankruptcy court failed to make a finding that

each entity violated its discovery obligations such that it properly could be held

jointly and severally liable for the sanctions award. The district court determined

that the Leventhal entities had failed to argue to the bankruptcy court that some

entities had not violated any discovery obligation, and the Leventhal entities

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therefore had failed to preserve any such argument. The Leventhal entities appear

to us to have sufficiently preserved this argument, however, at least with respect to

some of the entities’ failure to produce tax returns. Nevertheless, we agree with

the district court’s alternative ruling that the Leventhal entities’ argument fails on

the merits. The bankruptcy court found that all of the Leventhal entities failed to

comply with their discovery obligations, and that finding is supported by the

record. Even if not all of the Leventhal entities were required to or could produce

tax returns, they all were required to produce general ledgers in compliance with

the court’s order and the Federal Rules of Civil Procedure—that is, in the

electronic form in which the ledgers were “ordinarily maintained or in a reasonably

usable form,” Fed. R. Civ. P. 34(b)(2)(E)(ii)—and all failed to do so by the

deadline the bankruptcy court set.

      We affirm the district court’s order upholding the bankruptcy court’s

imposition of sanctions, jointly and severally, upon the Leventhal entities.

      AFFIRMED.

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