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Certain Underwriters at Lloyd's, London v. Ssdd, LLC

United States District Court, E.D. Missouri, Eastern Division

July 10, 2014

SSDD, LLC, Defendant.


CHARLES A. SHAW, District Judge.

This is a declaratory judgment matter that arises out of a commercial property insurance policy issued by plaintiffs Certain Underwriters at Lloyd's, London Subscribing to Certificate No. IPSI 12559 (collectively, "Underwriters") to defendant SSDD, LLC ("SSDD"), for a building located in St. Louis, Missouri. The matter is before the Court on SSDD's Motion for Sanctions and/or Motion in Limine Pursuant to Rule 37 to Exclude the Testimony of Mr. Andrew Fowles and Mr. Anthony Milo at Trial. Underwriters oppose the motion and it is fully briefed. For the following reasons, SSDD's motion will be granted and Mr. Fowles and Mr. Milo will not be permitted to testify at trial.

Legal Standard

Rule 26(a)(1)(A) requires a party to provide to the other parties "the name and, if known, the address and telephone number of each individual likely to have discoverable information - along with the subjects of that information - that the disclosing party may use to support its claims or defenses, unless the use would be solely for impeachment." Fed.R.Civ.P. 26(a)(1)(A)(i).

A party who has disclosed information under Rule 26(a) or responded to an interrogatory, request for production or request for admission "must supplement or correct its disclosure or response... in a timely manner if the party learns that in some material respect the disclosure or response is incomplete or incorrect, and if the additional or corrective information has not otherwise been made known to the other parties during the discovery process or in writing." Fed.R.Civ.P. 26(e). "If a party fails to provide information or identify a witness as required by Rule 26(a) or (e), the party is not allowed to use that information or witness to supply evidence on a motion, at a hearing, or at a trial, unless the failure was substantially justified or is harmless." Fed.R.Civ.P. 37(c)(1). "One of the purposes of discovery is to eliminate unfair surprise. Rule 37's enforcement mechanism helps accomplish this purpose." Doe v. Young , 664 F.3d 727, 734 (8th Cir. 2011) (internal citation omitted).

The Eighth Circuit has provided this guidance to district courts in determining an issue of a failure to disclose or supplement:

When a party fails to provide information or identify a witness in compliance with Rule 26(a) or (e), the district court has wide discretion to fashion a remedy or sanction as appropriate for the particular circumstances of the case. Fed.R.Civ.P. 37(c)(1); Trost v. Trek Bicycle Corp. , 162 F.3d 1004, 1008 (8th Cir. 1998) ("failure to disclose in a timely manner is equivalent to failure to disclose"). The district court may exclude the information or testimony as a self-executing sanction unless the party's failure to comply is substantially justified or harmless. Fed.R.Civ.P. 37(c)(1). When fashioning a remedy, the district court should consider, inter alia, the reason for noncompliance, the surprise and prejudice to the opposing party, the extent to which allowing the information or testimony would disrupt the order and efficiency of the trial, and the importance of the information or testimony. Sellers v. Mineta , 350 F.3d 706, 711-12 (8th Cir. 2003); see also Marti v. City of Maplewood , 57 F.3d 680, 683 (8th Cir. 1995) (setting forth a variety of possibly relevant factors).

Wegener v. Johnson , 527 F.3d 687, 692 (8th Cir. 2008). A district court's ruling under Rule 26(e) is reviewed for "gross abuse of discretion, " and is reversed only if "fundamental unfairness" results. Kahle v. Leonard , 563 F.3d 736, 740 (8th Cir. 2009).

The Parties' Arguments

The discovery deadline in this case was January 21, 2014. See Case Management Order at 2 (Doc. 28). Trial is scheduled to begin on July 21, 2014. SSDD's motion states that on June 3, 2014, Underwriters served Supplemental Responses to SSDD's First Set of Interrogatories, identifying for the first time Mr. Fowles and Mr. Milo as witnesses that will testify on Underwriters' behalf at trial. SSDD argues that Underwriters have no justification for their failure to disclose the identity of these witnesses, of whom they have been aware for months or years. SSDD asserts that the untimely disclosures prejudice it because it has had no opportunity to depose either witness, to subpoena documents from them, to use their testimony in dispositive motions, or to question other witnesses about them. SSDD asserts that Underwriters' actions result in unfair surprise because unlike SSDD, Underwriters know what the witnesses will say at trial.

SSDD states that while Underwriters never disclosed Mr. Fowles in its Rule 26(a)(1) disclosures to identify him as someone with knowledge of the facts in this case, Underwriters obtained Mr. Fowles' Declaration on January 29, 2014 and used the Declaration to oppose SSDD's motion for summary judgment on March 28, 2014. Underwriters' Supplemental Responses state that Mr. Fowles "is the person responsible for preparing the binding authority entered into between International Placement Services, Inc. and Canopius Syndicate 4444." SSDD argues the fact that Underwriters obtained Mr. Fowles' Declaration in January 2014 clearly indicates he had discoverable information and should have been disclosed in the Rule 26(a)(1) disclosures, and also that Underwriters intended as of January 2014 to use his testimony. SSDD contends that Underwriters' belated disclosure of Mr. Fowles months later and close to trial indicates they concealed their intention of calling him as a witness to prevent it from conducting discovery into his knowledge of the facts of the case.

SSDD asserts that Underwriters never previously identified Mr. Milo, an employee of Madsen, Kneppers & Associates, Inc. ("MKA"), in any prior discovery responses, including their Rule 26(a)(1) disclosures and initial responses to SSDD's interrogatories, but state in their Supplemental Responses that Mr. Milo inspected the building's roof in the fall of 2012 and prepared the report for SSDD's hail claim on the building. SSDD argues that Underwriters therefore knew of Mr. Milo's identity at least since 2012 but did not disclose him or timely supplement the disclosures to identify him even though they knew he had discoverable information.

Underwriters respond that they had no duty to supplement regarding either witness, and that even if they did have such a duty, the failure to substitute was substantially justified and harmless. Underwriters assert they had no duty to supplement regarding Mr. Fowles because SSDD learned of him more than four months ago when Underwriters submitted Mr. Fowles' Declaration to rebut SSDD's "imputation of knowledge" defense. Underwriters contend they never intended to have Mr. Fowles be a witness until he became necessary as a result of SSDD's defense, which was first raised by SSDD during Mr. Gerald Rogers' deposition on January 21, 2014, the day before discovery closed. Underwriters state that SSDD never expressed any interest in taking Mr. Fowles' deposition and in fact moved to strike his Declaration.[1] Underwriters assert SSDD is not prejudiced because "it is the party that induced the involvement of Mr. Fowles by an eleventh hour defense and it elected to defer depositions of any of Underwriters' witnesses involved in the details of the claims." Pls.' Mem. Opp. at 2.

Underwriters assert they had no duty to supplement regarding Mr. Milo because he is simply a "replacement witness" for Mr. Frederick Gunvaldsen of MKA, as the person with knowledge regarding SSDD's hail claim. Underwriters state they disclosed Mr. Gunvaldsen almost a year ago in their Rule 26(a)(1) initial disclosures, and only identified Mr. Milo because they recently learned Mr. Gunvaldsen is no longer employed by MKA. Underwriters assert that because Mr. Milo merely replaces Mr. Gunvaldsen, SSDD suffers no prejudice and its objection is "form over substance." Underwriters state that ...

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