In Hallmark v. Cohen & Slamowitz, Midland Funding LLC, — F.R.D. —-, 2014 WL 5017859 (W.D.N.Y. 2014), Judge Froschio did not require an FDCPA class action defendant to prepare audited financial statements where there were none, but, mere production of financial statements did not preclude plaintiff’s inquiry into defendants raw data to allow Plaintiff to challenge defendant’s valuation of its own business.

It is basic that in responding to a document production request, pursuant to Fed.R.Civ.P. 34(a) (“Rule 34(a)”), “a party is not required to create documents meeting the document requests, only to produce documents already in existence.” BaickerMcKee Janssen Corr, FEDERAL CIVIL RULES HANDBOOK, Thompson Reuters (2014) at 889) citing caselaw. See also Breedlove v. Mandell, 2008 WL 596864, at *2 (W.D.N.Y. Feb. 29, 2008) (denying motion to compel based on requested party’s representation that it had no record of requested document, and in the absence of any reason to doubt such representation, because the “[c]ourt cannot compel production of what does not exist.” (quoting American Banana Co., Inc. v. Republic National Bank of New York, N.A., 2000 WL 521341, at *3 (S .D.N.Y. May 1, 2000))). Thus, in the instant case, while this court sought to dispose of Plaintiff’s motion to compel consistent with Godson, by directing C & S to produce audited financials which do not presently exist, to do so would be contrary to the general rule that defendants are only required to produce previously prepared audited financials. Therefore, the court’s recent rulings in Godson provide clarification of the prior Godson decision regarding discovery of defendant’s financial documents, consistent with this general rule. Although production by C & S of audited financials, the ‘gold standard’ of accounting practice, could, if accepted by Plaintiff in lieu of Plaintiff’s discovery requests, obviate the need for discovery of the C & S’s underlying financial records relevant to C & S’s net worth which remain the subject of Plaintiff’s motion to compel, nevertheless, as discussed, supra, the court is required to avoid directing discovery beyond that permitted by Rule 34(a).   The question remains, however, whether Plaintiff’s motion to compel, left unresolved by the court’s April 2, 2014 ruling, seeking such underlying information should be granted in light of C & S’s proffer of its financial statements that have been reviewed, but not audited, by C & S’s outside accountant. See Sayles Declaration Exhs. A–D (Independent Accountant Review Report for C & S’s Unconsolidated and Consolidated Financial Statements for Fiscal Years ending December 31, 2011 and 2012, respectively) (“Reviewed Statements”). While such Reviewed Statements are certainly helpful in providing a definitive answer to the question of C & S’s net worth, they are not dispositive, and, for that matter, neither would audited statements. Significantly, Defendant cites to no authority holding that the production of such Reviewed Statements forecloses further discovery on the issue of a defendant’s net worth and the court’s research reveals none. On the other hand, to illustrate the need for further fact discovery in this case directed to whether the Reviewed Statements accurately describe C & S’s net worth, Plaintiff questions whether C & S has fairly stated the value of its Portfolio Investments, the underlying defaulted debt instruments acquired by C & S as a major asset of its collections business which C & S attempts to collect thereby producing significant revenue to C & S, which C & S stated at cost on the Reviewed Statements, as a significant C & S asset, or whether the value of these assets are substantially understated by C & S. See Plaintiff’s Memorandum at 17. Additionally, in FDCPA class action cases seeking damages pursuant to § 1692K(a)(2)(B) courts permit discovery of a defendant’s underlying financial data relevant to the issue of defendant’s net worth. See Anchondo v. Anderson, Crenshaw & Associates, L.L. C., 256 F.R.D. 661, 669 (D.N.M.2009) (court “will ultimately determine how to calculate net worth and whether any documents produced in response to [plaintiff’s] request are admissible”); Miller v. Abrams, Fensterman, et al., 2011 WL 6105033, at *1 (“ ‘Plaintiff need not accept defendant’s interpretation of its financial data … but is entitled … to examine the data underlying defendant’s statement of net worth.’ “ (quoting Mailloux v. Arrow Financial Services, L.L.C., 2002 WL 246771, at *1 (E.D.N.Y. Feb. 21, 2002))). In Miller, the court permitted deposition questions directed to certain deductions on defendant’s tax returns challenged by plaintiff as improperly understating defendant’s net worth. Miller, 2011 WL 6105033, at *1. In Mailloux, the court enforced plaintiff’s discovery requests “related to defendant’s net worth.” Mailloux, 2002 WL 246771, at *1. Thus, production of the & S’s Reviewed Statements, although relevant to the question of C & S’s net worth, does not foreclose Plaintiff’s discovery of C & S’s financial information upon which such Reviewed Statements were based. Accordingly, Defendant’s motion for reconsideration should be GRANTED and, sua sponte, the court finds Plaintiff’s motion to compel, should also be GRANTED.