Free Motion for Miscellaneous Relief - District Court of Arizona - Arizona

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Wayne Gill, Esq. (Fla Bar. No. 114953) WALTON LANTAFF SCHROEDER & CARSON LLP 1700 Palm Beach Lakes Boulevard, 7th Floor West Palm Beach, Florida 33401 Telephone: (561) 689-6700 Facsimile: (561) 689-2647 Steven Plitt, Esq. (State Bar No. 007481) Daniel Maldonado, Esq. (State Bar No. 018483) BESS KUNZ, A Professional Corporation 3838 North Central Avenue, Suite 1500 Phoenix, Arizona 85012-1092 Telephone: (602) 331-4600 Facsimile: (602) 331-8600 Attorneys for Defendant/Counter-Plaintiff IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA U-Haul International, Inc.; U-Haul Company Of Pennsylvania; U-Haul Company Of Florida; and Republic Western Insurance Company, Plaintiffs, vs. Lumbermens Mutual Casualty Company, Defendants. No. CIV 04-0662 PHX DGC (Maricopa County Superior Court Cause No. CV 2004-002438) DEFENDANT'S MOTION TO EXCLUDE DOUGLAS M. BELL'S ADDITIONAL TESTIMONY (Assigned to the Honorable David G. Campbell)

Defendant, Lumbermens Mutual Casualty Company ("LMC") by and through its
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undersigned counsel, and pursuant to Fed.R.Civ.P. 37(c) moves the court for an order excluding the part of Douglas M. Bell's trial testimony that is described in plaintiffs' pre-trial witness list as being testimony ". . . as to plaintiffs' indemnity and LAE
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payments in connection with the Nelson and Fernandez claims, and as to the damages due and owing from LMC in connection with such claims." In support thereof, LMC states as follows:

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FACTS 1. Such testimony has not been disclosed to LMC in plaintiffs' Rule 26

Disclosure during the course of discovery, or in plaintiffs' responses to discovery including plaintiffs' answers to interrogatories, plaintiffs' response to request for

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production, or in the deposition testimony given by Mr. Bell in his capacity as one of plaintiffs' two designated 30(b)(6) witnesses. Also, the actual substance of Mr. Bell's additional testimony was not included in the description of his testimony that accompanied plaintiffs' trial witness list.

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2.

The only Rule 26 Disclosure provided by plaintiffs is plaintiffs' initial

Rule 26 Disclosure which was served on May 28, 2004. That disclosure did not list Mr. Bell as a witness for any purpose and did not disclose the identity of any witnesses having knowledge pertaining to Republic Western's damages claim or Republic Western's indemnity and LAE payments. Instead, paragraph 9 of the witness disclosure section of plaintiffs' Rule 26 Disclosure merely listed "Representatives of U-Haul, RWIC, LMC, and AON Risk Services, Inc. with knowledge of the facts, circumstances, issues and evidence relating to the claims, counterclaims and defenses asserted by the parties herein." Interrogatory 28 of LMC's first set of interrogatories asked plaintiffs to: "State the names and last known addresses of all representatives of 'U-Haul,' Republic

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Western Insurance Company, LMC and AON Risk Services, Inc. referred to in paragraph enumerated 9 of plaintiffs' Rule 26(a)(1)(A) disclosures." Plaintiffs' answer to interrogatory 28 did not disclose or name Mr. Bell. Instead, plaintiffs' answer to

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interrogatory 28 stated:

"See General Responses and Objections.

Subject to and

without waiving their objections, plaintiffs respond as follows: Holly L. ThorkildsonReed, Ronald K. McCarty, Elvia Aespuro, Stephen Tibbs, Augie Vega, Lesley Eickert, Mae Sandoval, Michael Mizrachi, at the last known address noted above."

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3.

Included within LMC's first set of interrogatories (which were served on

December 1, 2004) were interrogatories 5, 6, 9, 21, and 23 which asked plaintiffs to provide the names and addresses of persons with knowledge pertaining to the various allegations of LAE and indemnity payments alleged and/or referred to in plaintiffs'

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complaint. Republic Western's assistant vice president of claims, Thomas Matush, was the only person disclosed in plaintiffs' answers to those interrogatories. 4. LMC's notice of deposition duces tecum of plaintiffs' 30(b)(6) witness

was served on December 6, 2004. Attachment "A" to that deposition notice listed thirteen (13) topics upon which examination of Republic Western Insurance Company was requested. Paragraphs 4, 5, 10, and 13 of that list of topics pertained to plaintiffs' damages claims and to Republic Western's payments of LAE and indemnity regarding the underlying lawsuits. 5. Republic Western produced Thomas Matush in response to those parts of

LMC's notice for Republic Western's 30(b)(6) witness deposition that pertained to

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plaintiffs' damages claims and Republic Western's LAE and indemnity payments. Republic Western produced its vice president of marketing and U-Haul insurance programs Douglas M. Bell in response to those parts of the topic list for Republic

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Western's 30(b)(6) witness deposition that did not pertain to plaintiffs' damages claims or to Republic Western's LAE and indemnity payments. Republic Western's counsel took the position during Mr. Bell's deposition that Mr. Bell was being presented as Republic Western's 30(b)(6) witness only with respect to topics 6 and 7 of LMC's topic

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list for the deposition. (Topic 6 was the insurance policies issued by Republic Western to U-Haul for the April 1, 1999 to April 1, 2000 policy year and for the April 1, 2000 to April 1, 2001 policy year. Topic 7 was the insurance policies by LMC to U-Haul for those two policy years.) Mr. Bell's deposition was therefore limited to topics not

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involving plaintiffs' damages claims or Republic Western's LAE and indemnity payments. 6. Non expert discovery was closed in this case as of March 1, 2005. LEGAL MEMORANDUM 7. A case involving very similar facts is Depew v. ShopKo Stores, Inc., 2006

WL 47357 (D. Idaho). Plaintiffs filed a motion in limine seeking to exclude certain of defendant's witnesses on the ground that defendant failed to timely disclose the identity of the witnesses. The court noted that Rule 26(a)(1) requires the parties to disclose the identity of "each individual likely to have discoverable information that the disclosing party may use to support his claims or defenses. . ." and that pursuant to Rule 26(f), this

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disclosure must occur "at least 21 days before a scheduling conference is held" unless otherwise ordered. The court also noted that the parties are under a continuing duty to supplement these disclosures under Rule 26(e) if they learn that (1) their initial

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disclosures are "incomplete or incorrect," and (2) "the additional or corrective information has not otherwise been made known to the other parties during the discovery process or in writing." The court further noted that ". . . the proffering party may be absolved of its duty to file a supplemental disclosure under Rule 26(e)

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identifying a certain person only if the other parties have learned through other means that the person might have discoverable information regarding the proffering party's claims or defenses." and that "As trial approaches, the parties must then choose their trial witnesses from this list of persons they have disclosed pursuant to Rule 26." The

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court further stated that: "Failure to follow the dictates of Rule 26 could result in sanctions under Rule 37(c)(1) unless the proffering party can show that it had a substantial justification for its failure, or that its failure is harmless." The court then set forth the following as what it termed the "decision tree" for resolving whether a witness designation is timely: "(1) Was the person identified in the Rule 26(f) initial

disclosures? (2) If not, was the person identified in a supplemental disclosure pursuant to Rule 26(e)? (3) If not, has the person and his connection to the claims or defenses of the proffering party 'otherwise been made known to the other parties during the discovery process or in writing' thereby excusing the failure to supplement under Rule 26(e)? (4) If not, has the proffering party shown that its failure was substantially

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justified to avoid Rule 37 sanctions? (5) If not, has the proffering party shown that its failure was harmless to avoid Rule 37 sanctions?" The court, after applying the above five-step "decision tree," excluded several

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witnesses pursuant to Rule 37(c). The court explained that a party's duty to supplement its witness disclosure under Rule 26(e) does not end just because the opposing party knew the witness's identity. The court stated that the party facing the sanction had not explained why the party moving to exclude the witness should have known that the

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witness had discoverable information that the party facing sanctions may use to support its claims or defenses. The court held that in the absence of such a showing, the party facing sanctions had a continuing duty to supplement under Rule 26(e). The court noted that the witness's name was never identified in any Rule 26 filing, that no showing of

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substantial justification had been made, and that the disclosure two weeks prior to trial, "and long after discovery has closed ­ is clearly harmful." The court further said that where a witness is disclosed after the close of discovery, the prejudice is the same as if no disclosure whatsoever was made prior to trial. The court said: "In both

circumstances, the opposing party is put to the Hobson's choice of either flying blind on cross examination or asking for a delay to conduct discovery." 8. In Greenberg v. Paul Revere Life Ins. Co., 91 Fed. Appx. 539 (9th Cir.

2004), the court excluded a witness' "additional" testimony where the additional testimony was not disclosed until the eve of trial. The court stated: ". . . The district court properly barred Dr. Steven Pitt from testifying about his impressions of

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Greenberg's demeanor during a deposition because Paul Revere failed to disclose this additional testimony until the eve of trial." 9. In Yeti by Molly, Ltd. v. Deckers Outdoor Corp., 259 F.3d 1101 (9th Cir.

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2001), the court granted a motion in limine pursuant to Fed.R.Civ.P. 37(c) to exclude a witness from testifying due to failure to timely disclose the expert's rebuttal report until "almost two years after the close of discovery" and 28 days prior to trial. The court stated that Fed.R.Civ.P. 37(c) "gives teeth" to the disclosure requirements of Federal

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Rule of Civil Procedure 26(a) ". . . by forbidding the use at trial of any information required to be disclosed by Rule 26(a) that is not properly disclosed." The court stated that Fed.R.Civ.P. 37(c)(1) is a broadening of the court's sanctioning power, that "The Advisory Committee Notes describe it as a 'self-executing,' 'automatic' sanction to

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'provide [ ] a strong inducement for disclosure of material . . .,'" that "Courts have upheld the use of a sanction even when a litigant's entire cause of action or defense has been precluded," and that exclusion is an appropriate remedy for failing to fulfill the required disclosure requirements of Rule 26(a) even where there has been no violation of an explicit court order and even absent a showing in the record of bad faith or willfulness. The court further held that the party facing sanctions has the burden of proving that the failure to comply with the disclosure requirements of Rule 26(a) was not harmful to the opposing party. 10. Paragraph 4 of this court's October 13, 2006 ORDER SETTING FINAL

PRETRIAL CONFERENCE states:

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The Court will not allow the parties to offer any exhibit, witness, or other evidence that was not disclosed in accordance with the provisions of this Order and the Federal Rules of Civil Procedure and listed in the Proposed Final Pretrial Order, except to prevent manifest injustice. CONCLUSION 11. LMC respectfully submits that, based on the above, the court should

exclude the aforesaid proposed additional testimony of Douglas M. Bell because: a) Such testimony was never disclosed by plaintiffs in their Rule 26 Disclosure. b) Such testimony was never disclosed by plaintiffs during the course of discovery, or while discovery remained open. c) Mr. Bell was never disclosed during the course of discovery, or while discovery remained open, as a witness who has any knowledge regarding plaintiffs' damages claims and/or Republic Western's LAE and indemnity payments. d) Although plaintiffs' trial witness list states that Mr. Bell will provide testimony regarding damages, LAE and indemnity payments, said description of his testimony does not give the substance thereof. e) Plaintiffs' late disclosure (almost approximately two years after the close of discovery) of Mr. Bell as a person having knowledge pertaining to plaintiffs' damages claim, LAE and indemnity

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payments, is harmful and prejudicial to defendant LMC in view of the March 8, 2007 trial date. f) LMC's motion to exclude Mr. Bell's said additional testimony meets each part of the five-step test set forth by the court in Depew v. ShopKo Stores, Inc., supra. WHEREFORE, defendant, Lumbermens Mutual Casualty Company, respectfully requests the court to exclude, as a sanction under Federal Rule 37(c), any testimony of

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Douglas M. Bell regarding plaintiffs' damages claim and Republic Western's LAE and indemnity payments.

LOCAL RULE CERTIFICATION I HEREBY CERTIFY that I have conferred with opposing counsel in a good faith effort to resolve the issue raised by this motion, and that counsel have been unable to agree on the resolution of the motion.

DATED this 13th day of February, 2007. WALTON LANTAFF SCHROEDER & CARSON LLP Wayne Gill, Esq. 1700 Palm Beach Lakes Boulevard, 7th Floor West Palm Beach, Florida 33401

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KUNZ PLITT HYLAND DEMLONG & KLEIFIELD, P.C.

By:

/s Daniel Maldonado Steven Plitt Daniel Maldonado 3838 N. Central Avenue, Suite 1500 Phoenix, AZ 85012-1902 Attorneys for Defendant

ORIGINAL electronically filed with the USDC this 13th day February, 2007, and a Copy delivered to Judge Campbell; and a COPY electronically served/mailed to: Gerald Gaffaney, Esq. David J. Ouimette, Esq. MARISCAL, WEEKS, MCINTYRE & FRIEDLANDER, P.A. 2901 North Central, Suite 200 Phoenix, Arizona 85012 Attorneys for Plaintiff Bruce Friedman, Esq. Mark S. Fragner, Esq. RUBIN, FIORELLA & FRIEDMAN, LLP 292 Madison Avenue, 11th Floor New York, New York 10017 Attorneys for Plaintiff

/s Tracey Barnes

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