United States District Court, N.D. Texas, Dallas Division
EDGEFIELD HOLDINGS as successor in interest to Regions Bank, Plaintiff,
KENNETH J. GILBERT, et al., Defendants.
MEMORANDUM OPINION AND ORDER
L. HORAN UNITED STATES MAGISTRATE JUDGE.
Kenneth J. Gilbert and Non-Party Helen K. Gilbert
(collectively, the “Gilberts”) have filed a
Motion to Quash Subpoena and Objection to Document Requests
in response to a subpoena (the “Subpoena” [Dkt.
No. 15, Ex. 1]) issued to Non-Party Helen K. Gilbert by
Plaintiff Edgefield Holdings as successor in interest to
Regions Bank (“Edgefield” or
“Plaintiff”). See Dkt. No. 2 (the
“Motion to Quash”).
States District Judge David C. Godbey has referred the Motion
to Quash to the undersigned United States magistrate judge
for hearing, if necessary, and determination under 28 U.S.C.
§ 636(b). See Dkt. No. 5.
filed a response, see Dkt. No. 14, and the Gilberts
filed a reply, see Dkt. No. 18.
reasons and to the extent explained below, the Court GRANTS
in part and DENIES in part the Gilberts' Motion to Quash
Subpoena and Objection to Document Requests [Dkt. No. 2].
Edgefield explains the background to the Motion to Quash,
[o]n July 8, 2010, the United States District Court - Eastern
District of Louisiana, in Civil Action No. 2:09-cv-03560,
entered a judgment against Defendant KENNETH J. GILBERT in
favor of Regions Bank in the amount of $1, 348, 099.00 plus
interest, attorney's fees, and expenses (hereinafter the
“Louisiana Federal Judgment”). The Louisiana
Federal Judgment was subsequently assigned to Plaintiff.
In an unrelated case, on November 29, 2010, the 415th
Judicial District Court, Parker County, Texas, in Cause
Number CV-10-0929, entered a final judgment in favor of
Regions Bank against Defendant KENNETH J. GILBERT in the
amount of $1, 972, 645.58 plus interest, late charges,
attorney's fees, and court costs (hereinafter the
“Texas State Judgment”). The Texas State Judgment
was subsequently assigned to Plaintiff.
On December 17, 2010, Regions Bank attempted to domesticate
the Louisiana Federal Judgment in Parker County, Texas but
did not pursue enforcement of the Louisiana Federal Judgment
in Texas state court thereafter. Nevertheless, the
domestication in state court of the Louisiana Federal
Judgment is invalid because an exemplified copy of the
Louisiana Federal Judgment was not filed as required by Texas
law. Tex. Civ. Prac. & Rem Code § 35.003.
On April 19, 2016, Plaintiff commenced enforcement of the
Texas State Judgment by serving Defendant KENNETH J. GILBERT
with post-judgment discovery requests. Plaintiff further
attempted to collect the Texas State Judgment by employing
enforcement tools allowed by law, including gamishment and
third-party discovery. Through postjudgment discovery in the
Texas State Judgment matter, Plaintiff discovered that
Defendant KENNETH J. GILBERT has been fraudulently
transferring his community property income to his wife, HELEN
K. GILBERT, and non-party entities owned and controlled by
On or about April 6, 2017, Plaintiff acquired Regions
Bank's interest in the Louisiana Federal Judgment and
filed its Motion to Substitute Parties-in-Interest in the
Eastern District of Louisiana case. Thereafter, on May 12,
2017, the Eastern District of Louisiana Court entered an
order allowing Plaintiff to substitute as judgment creditor
in accordance with Federal Rule of Civil Procedure 25(c).
On September 29, 2017, Plaintiff registered the Louisiana
Federal Judgment in this Court pursuant to 28 U.S.C. §
On November 13, 2017, after proper notice, Plaintiff issued
its Subpoena to Non-Party HELEN K. GILBERT (hereinafter the
“Subpoena”). A true and correct copy of the
Subpoena is attached to Plaintiffs accompanying Appendix as
Exhibit “1" [Appendix pgs.3-161 and incorporated
herein by reference.
On December 5, 2017, counsel for the GILBERTS proposed
producing certain documents responsive to the Subpoena in
exchange for Plaintiff s agreement to enforce the Louisiana
Federal Judgment in Parker County state court only. Plaintiff
agreed regarding the production of certain documents but did
not agree regarding venue.
Dkt. No. 14 at 2-4.
Gilberts contend that
[t]his case was commenced for the sole purpose of compelling
post-judgment discovery from a non-judgment debtor, Helen K.
Gilbert (“Mrs. Gilbert”). However, such discovery
should be undertaken through the lawsuits currently pending
in Parker County, Texas, not in federal court in Dallas.
Parker County is where (a) the [Gilberts] reside, (b)
Edgefield's judgments were entered or are registered, (c)
Edgefield has been conducting collection efforts since 2016,
(d) Edgefield, and its predecessor in interest have taken
extensive discovery from the judgment debtor, Kenneth J.
Gilbert (“Mr. Gilbert”), and (e) Edgefield issued
the very same post-judgment discovery request to Mrs. Gilbert
the day before this action was commenced. Additionally, the
documents requested in the Subpoena should be narrowed and
specifically tailored to the facts of the matter to seek (a)
information about assets that could be used to satisfy
Edgefield's debt, rather than the carpet-bombing approach
of sending 112 broad requests for information about Mrs.
Gilbert's separate and solely managed property, and (b)
information not already provided by Mr. Gilbert or available
from, the judgment debtor.
Edgefield allegedly holds two judgments taken against Mr.
Gilbert by Regions Bank. One was entered by the 4151 Judicial
District Court of Parker County, Texas on November 29, 2010
in the amount of $1, 972, 645.58 (“Judgment
One”). The other was entered by the United States
District Court for the Eastern District of Louisiana on July
8, 2010 in the amount of $1, 348, 099.00 (“Judgment
Two”). As discussed below, Regions Bank,
Edgefield's alleged assignor, has already domesticated
Judgment Two in Parker County.
Edgefield has no judgments against Mrs. Gilbert.
Nevertheless, Edgefield has twice sent the same set of 112
document requests to Mrs. Gilbert, asking for a broad range
of financial and personal information, including documents
that pertain to her separate property and her solely managed
community property. The document production Edgefield seeks
to compel is, to a large extent, irrelevant and not
discoverable, because Mrs. Gilbert's separate and solely
managed community property are not subject to her
husband's debts. The document production is also overly
burdensome. Because the discovery sought is extremely broad,
Mrs. Gilbert will incur substantial expense providing
extensive information in furtherance of the collection of a
debt she does not owe about assets that are not liable for
her husband's debt or to protect herself from having to
do so. The Subpoena is also unduly burdensome because it is
unnecessary. Edgefield also seeks to compel production of
documents and information that Edgefield has already received
from Mr. Gilbert or that it was given the opportunity to
inspect and chose not to.
The Court should order Edgefield to pay Mrs. Gilbert's
expenses in moving to quash the Subpoena, because it did not
take reasonable steps to avoid imposing undue burden or
expense on Mrs. Gilbert; rather, the Subpoena is part of a
pattern intended to harass the [Gilberts], especially Mrs.
Gilbert. In addition to the Subpoena, Edgefield has taken
extensive discovery from Mr. Gilbert and has made other
extensive production demands on Mrs. Gilbert. Edgefield has
demanded to inspect and video the [Gilberts'] home,
including private areas, which the [Gilberts] agreed to, but
Edgefield never did an inspection. Edgefield has
unnecessarily used four different courts to assist in
collection, which has increased costs and stress to the
Edgefield has issued a notice of subpoena containing 112
document requests directed to Mrs. Gilbert in one of the
Parker County actions, but decided not to serve the subpoena
issued from the court in the place of her residence. Instead,
the very next day, Edgefield registered Judgment Two in this
Court and now seeks to compel production of the same 112
documents through this Court. This forum shopping and
procedural maneuvering is intended to harass Mrs. Gilbert and
to increase expense, and is therefore an abuse of the Federal
Rules of Civil Procedure.
Dkt. No. 2 at 1-3. And the Gilberts offer their own
procedural background to their Motion to Quash:
On November 29, 2010, Regions Bank obtained Judgment One
against Kenneth J. Gilbert in Regions Bank v. Kemmerer
BLM, L.L.C. and Kenneth J. Gilbert from the 4151
Judicial District Court of Parker County in Cause No.
CV-10-0929, [Exhibit 1; App . 001 to 003). On March 10, 2016,
Regions Bank is alleged to have assigned Judgment One to
Edgefield.1 Edgefield as taken many actions to obtain
post-judgment discovery and to collect Judgment One, and
which are described below.
To collect Judgment One, in April 2017, Plaintiff filed in
Parker County an Application and Affidavit for Writ of
Garnishment (the “Garnishment Action”) against
UBS AG and UBS Financial Services, Inc. (“UBS”)
in the 4151 Judicial District of Parker County in Cause No.
CV-17-0406. [Exhibit 2; App. 004 to 009]. One of the accounts
at UBS was the [Gilberts'] joint checking account.
[Exhibit 35; App.332]. Another of the accounts is Mr.
Gilbert's Individual Retirement Account (the
“IRA”). [Exhibit 35; App. 332]. The third account
is held for the benefit of the [Gilberts] in an account in
the name of the Gilbert Real Estate Brokers Defined Benefit
Pension Plan (the “Pension Plan”). [Exhibit 35;
App. 332]. The Garnishment Action was resolved with Edgefield
agreeing not to collect any of the Pension Plan or IRA funds,
but taking the funds in the [Gilberts'] joint checking
account at UBS. [Exhibit 3; App. 010 to 011].
To collect Judgment One, on June 28, 2016, Plaintiff filed in
Parker County Edgefield Holdings, LLC, as assignee of Regions
Bank v. Kenneth J. Gilbert, Helen K. Gilbert, Chandler
Estates, LTD., and Parker County Real Estate Investments,
Inc. in Cause No. CV16- 0784 in the 43rd Judicial District
Court of Parker County, Texas (the “Fraudulent Transfer
Action”). [Exhibit 4; App. 012 to 021]. Edgefield
asserted that transfers of funds into the Pension Plan for
the benefit of the [Gilberts] constituted fraudulent
transfers under Texas law. [Exhibit 4; App. 017 to 019].
[The Gilberts] made counterclaims in the Fraudulent Transfer
Action, one of which was a counterclaim for declaratory
judgment that the Pension Plan account at UBS is exempt from
execution. [Exhibit 5; App. 022 to 026]. On August 3, 2017,
[the Gilberts] sought summary judgment on the counterclaim
for declaratory judgment that the Pension Plan is exempt from
execution based on the Employee Retirement Income Security
Act (29 U.S.C. §§1001-1461) (“ERISA”) .
[Exhibit 6; App. 027 to 038].
On August 7, 2017, Edgefield filed a Notice of Removal in the
United States District Court for the Northern District of
Texas, Fort Worth Division, improperly casting itself as the
defendant for purposes of 28 U.S.C. §§ 1441(a)
based on the [Gilberts'] counterclaim. [Exhibit 7; App.
039 to 046]. After considerable and unnecessary expense to
the [Gilberts], Edgefield conceded that a plaintiff who chose
its own venue for a suit cannot later remove an action under
28 U.S.C. §1441(a). The parties filed an agreed motion
to remand on August 21, 2017, which was granted by the Court.
[Exhibits 8 and 9; App. 047 to 050].
Once the fraudulent transfer action was remanded to the 43rd
Judicial District Court in Parker County and a hearing was
set on the [Gilberts'] summary judgment motion, on
September 14, 2017, Edgefield asked to transfer the case it
filed in the 43rd Judicial District Court of Parker County to
the 4151 Judicial District Court of Parker County. [Exhibit
10; App. 051 to 063]. The transfer request was denied.
[Exhibit 11; App. 064]. Then, on September 18, 2017,
Edgefield non-suited its claims in the Fraudulent Transfer
Action in an attempt to get the 43rd Judicial District Court
to dismiss the entire action, including [the Gilberts']
counterclaims. [Exhibit 12; App. 065 to 066]. That request
was denied. [Exhibits 13 and 14; App. 067 to 069]. Finally,
on September 28, 2017, the 43rd Judicial District Court of
Parker County held a hearing on the [Gilberts'] summary
judgment request, granting the motion on October 28, 2017
[Exhibit 15; App. 070 to 071], and entering a final judgment
for the [Gilberts] on November 2, 2017. [Exhibit 16; App. 072
As discussed below, Edgefield served a notice of subpoena on
Mrs. Gilbert the same day as the hearing on the summary
In another attempt to collect Judgment One, on May 19, 2017,
Edgefield filed a motion in the 4151 Judicial District Court
of Parker County, Case No. CV-10-0929, to inspect the
[Gilberts'] home in Aledo and to videotape the
inspection, including the opening, videotaping and
inventorying of all drawers and closets. [Exhibit 17; App.
074 to 075]. On June 22, 2017, Edgefield amended its
inspection request. [Exhibit 18; App. 076 to 078]. The
[Gilberts] responded and sought protection from that request
on June 6, 2017. [Exhibit 19; App. 079 to 082]. By July 28,
2017, the parties negotiated a resolution by agreeing to less
onerous terms for inspection and videotaping that would have
more respect for the [Gilberts'] privacy. [Exhibit 20;
App. 083 to 086]. After causing the [Gilberts] to incur
significant expense and after creating a stressful situation
for the [Gilberts], Edgefield never bothered to do the
inspection. The only rational conclusion to draw from this is
that Edgefield had no real interest in inspecting the
[Gilberts'] residence and pursued the inspection solely
as a means of harassing the [Gilberts], and in particular
Aside from the home inspection request discussed above,
Edgefield (and its predecessor, Regions Bank) have done
extensive post-judgment discovery of Mr. Gilbert and related
entities in the 415th Judicial District Court of Parker
County, Texas in Case No. 10-0929.
On February 2, 2011, Mr. Gilbert responded to requests for
production and interrogatories served on him by Regions Bank,
answering 38 interrogatories about his income and assets and
providing documents. [Exhibit 21; App. 087 to 107].
In the same Parker County case, on April 25, 2016, Edgefield
served eighty-four (84) interrogatories on Mr. Gilbert about
his income and assets, which he answered on May 23, 2016 .
[Exhibit 22; App. 108 to 131].
In the same Parker County case, on July 12, 2016, Edgefield
sent a notice of subpoena to Ray & Associates, PLLC (Mr.
Gilbert's counsel and accountant) seeking seventy- six
(76) document requests about Mr. Gilbert's assets, which
Ray & Associates responded to on August 9, 2016. [Exhibit
23; App. 132 to 138].
In the same Parker County case, on September 29, 2016,
Edgefield sent a notice of subpoena to third-party Morgan
Stanley Smith Barney, LLC seeking eleven (11) categories of
documents related to accounts in the name of Mr. Gilbert.
[Exhibit 24; App. 139 to 157].
In the same Parker County case, on May 19, 2017, Edgefield
sent a second post-judgment request for production to Mr.
Gilbert requesting ten (10) categories of information about
his Pension Plan, which Mr. ...