Lupe Development Partners, LLC v. Penny Baird

── Lupe Development Partners, LLC v. Penny Baird ── Court: Court of Appeals for the Eighth Circuit Date: May 07, 2026 Category: General United States Court of Appeals For the Eighth Circuit ___________________________ No. 25-1566 ___________________________ Lupe Development Partners, LLC; Steven Minn Plaintiffs - Appellants v. Penny Baird Third Party Defendant - Appellee Dessins, LLC Third Party Defendant ____________ Appeal from United States District Court for the District of Minnesota ____________ Submitted: December 17, 2025 Filed: May 7, 2026 ____________ Before LOKEN, SMITH, and KOBES, Circuit Judges. ____________ SMITH, Circuit Judge. Plaintiffs Lupe Development Partners, LLC and Steven Minn (collectively, “Plaintiffs”) sought to enforce judgments that they have against defendant Fred Deutsch, the husband of third-party defendant Penny Baird. This case involves the unusual scenario of a judgment creditor seeking to depose its former legal counsel. Plaintiffs moved for leave to depose the Scher Law Firm, LLP (Scher), as part of their ongoing efforts to enforce the judgments against Deutsch. The proposed deposition focused on Scher’s prior lawsuit against Baird and her children for allegedly receiving fraudulent conveyances from Deutsch. Plaintiffs’ motion for leave to depose Scher followed a prior order of the district court 1 in which it “cautioned” Plaintiffs “that no further discovery into Baird’s finances will be permitted absent new evidence of fraudulent or voidable transactions.” R. Doc. 59, at 19. The district court denied Plaintiffs’ motion for leave to depose Scher and held Plaintiffs jointly and severally liable for Baird’s costs and fees in responding to Plaintiffs’ motion. Plaintiffs appeal, arguing that the district court abused its discretion in (1) denying their motion for leave to depose Scher and (2) imposing a sanctions award against them. We affirm. I. Background This case arises from “nearly two decades of litigation history” and requires substantial summarization of that history. R. Doc. 78, at 1. In 2007, Plaintiffs sued Deutsch and his development companies in Minnesota state court, alleging contract breaches in a real estate development project. The Minnesota state court dismissed Baird as a defendant in that lawsuit after she established that she had not signed a guaranty. In 2010, the Minnesota state court entered two judgments for Plaintiffs against Deutsch and his companies totaling over $1.9 million (2010 Judgments). In 2009, Scher, in its representative capacity for Plaintiffs and other claimants, sued Baird and her children in New York state court “for accepting over $1,000,000 in fraudulent transfers from Deutsch and/or his business” (2009 Lawsuit). R. Doc. 68, at 2. The complaint alleged that “Deutsch fraudulently transferred over $20,000,000, which were the proceeds of the sale of the Park Lex office building, to a shell entity solely owned by Deutsch.” Id. It further alleged that “Deutsch used a 1 The Honorable Paul A. Magnuson, United States District Judge for the District of Minnesota. -2- portion of those fraudulently-received funds [through the shell entity] to purchase extravagant ‘gifts’ for his family.” Id. at 3. Specifically, the complaint “alleged that Baird accepted over a million dollars in fraudulent conveyances from Deutsch and/or his business, as a ‘gift’ for the purchase of a Paris apartment.” Id. It also alleged that Baird “received an opule