-BLM Leeds, LP v. United States of America, No. 3:2008cv00100 - Document 81 (S.D. Cal. 2010)
Court Description: ORDER Granting in part and Denying in part 57 Motion to Strike Witnesses and Exhibits. Signed by Judge Barry Ted Moskowitz on 6/1/10. (vet) (jrl).
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-BLM Leeds, LP v. United States of America Doc. 81 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 LEEDS LP, Case No. 08cv100 BTM (BLM) Plaintiff, 12 ORDER GRANTING IN PART AND DENYING IN PART MOTION TO STRIKE WITNESSES AND EXHIBITS v. 13 14 UNITED STATES OF AMERICA, Defendant. 15 16 Defendant United States of America moves to strike certain witnesses and exhibits 17 belatedly disclosed by Plaintiff [Doc. 57]. For the following reasons, the Court GRANTS in 18 part and DENIES in part the motion. 19 I. BACKGROUND 20 21 This is a quiet title suit challenging tax liens placed on Plaintiff’s property by the United 22 States. Defendant’s motion before the Court seeks to exclude two witnesses from testifying 23 at trial, declarations from a now-deceased witness,1 and several exhibits. The United States 24 claims that Plaintiff failed to timely disclose these witnesses and exhibits. Plaintiff argues 25 that its failure was harmless or substantially justified. 26 27 28 1 G. William Dunster, died during the briefing of this motion. The United States originally moved to prevent him from testifying at trial. That portion of its motion is moot. But the United States also opposes introduction of two declarations Dunster made. The Court therefore only addresses the two declarations. 1 08cv100 BTM (BLM) Dockets.Justia.com 1 II. LEGAL STANDARD 2 A party must disclose documents and the identity of witnesses likely to have 3 discoverable information that the party may use to support its claims. Fed. R. Civ. P. 4 26(a)(1)(A)(i)–(ii). This is a continuing duty, and the disclosure must be supplemented if the 5 party later learns of additional witnesses or responsive information. See Fed. R. Civ. P. 6 26(e); Hoffman v. Constr. Protective Servs., Inc., 541 F.3d 1175, 1179 (9th Cir. 2008). A 7 party must also disclose the identity of each expert witness and their written reports at the 8 time and in the sequence that the court orders. Fed. R. Civ. P. 26(a)(2)(A)–(C); Yeti by Molly 9 Ltd. v. Deckers Outdoor Corp., 259 F.3d 1101, 1106 (9th Cir. 2001). 10 Failure to make the required disclosures has its consequences. “Rule 37(c)(1) gives 11 teeth to these requirements by forbidding the use at trial of any information . . . that is not 12 properly disclosed.” Yeti by Molly Ltd. v. Deckers Outdoor Corp., 259 F.3d 1101, 1106 (9th 13 Cir. 2001). Courts have “particularly wide latitude” to issue sanctions under Rule 37(c)(1) 14 because it is a “self-executing, automatic sanction to provide a strong inducement for 15 disclosure of material.” Id. (quoting Fed. R. Civ. P. 37 advisory committee’s note (1993)) 16 (emphasis added and internal quotation marks omitted). The automatic sanction will not be 17 applied if the failure to disclose was either substantially justified or harmless. Yeti, 259 F.3d 18 at 1106; Fed. R. Civ. P. 37(c)(1). “[T]he burden is on the party facing sanctions to prove 19 harmlessness [or justification].” Yeti, 259 F.3d at 1107. 20 III. DISCUSSION 21 22 Plaintiff concedes that their required disclosures were late. So the only issue before 23 the Court is whether Plaintiff has met its burden of proving substantial justification or 24 harmlessness. The Court evaluates each belatedly disclosed witness and exhibit below. 25 26 1. Expert Witness Disclosures 27 The magistrate judge set a deadline of March 30, 2009 for all Rule 26(a)(2) expert 28 disclosures. Although Plaintiff timely disclosed the identities of some experts, it was not until 2 08cv100 BTM (BLM) 1 November 17, 2009 that Plaintiff disclosed that it intended to use Pete Cavanagh and Julie 2 Sullivan2 as expert witnesses. This was the first time Plaintiff disclosed them as experts in 3 the case. They would testify about a property appraisal from March 1996. 4 Plaintiff must establish that its late disclosure of these experts was either harmless or 5 substantially justified in order to avoid their exclusion. See Yeti, 259 F.3d at 1106. The 6 Court finds that there is some harm to the United States caused by Plaintiffs’ failure. It must 7 now depose those experts and may have to designate a rebuttal expert of its own. 8 Nevertheless, the United States had the appraisal report since April 29, 2009. Both Ms. 9 Sullivan and Mr. Cavanagh signed the report, so the United States knew their identities and 10 that they would have to testify to give a foundation for the appraisal report. And the Court 11 can remedy the harm without pushing back the trial date. So although there has been some 12 harm, the Court declines to exclude Ms. Sullivan and Mr. Cavanagh. 13 Plaintiff must produce the expert reports of Ms. Sullivan and Mr. Cavanagh within 14 twenty-one days of the filing of this order. Plaintiff must make them available for depositions 15 within forty-five days of the filing of this order. The United States, if it chooses to do so, may 16 designate a rebuttal expert and file an expert report within thirty days of deposing Plaintiffs’ 17 experts. Due to time constraints, Plaintiff may not depose the United States’s rebuttal expert. 18 This order is without prejudice to the United States seeking alternative sanctions. The 19 United States only sought the sanction of exclusion. 20 // 21 // 22 // 23 // 24 // 25 2. Declarations of G. William Dunster 26 2 27 28 There is some confusion regarding these two experts’ names. Plaintiff refers to them as Julie Sullivan and Pete Cavanaugh in its November 17, 2009 Pretrial Memorandum of Contentions of Facts and Law, but switches their last names in the opposition to the present motion, calling them Julie Cavanaugh and Pete Sullivan. The Court will use the names from the Memorandum. 3 08cv100 BTM (BLM) 1 Plaintiff disclosed that it intended to call Mr. Dunster as a fact witness on November 2 17, 2009, over a year after the deadline for initial disclosure of fact witnesses. Mr. Dunster 3 died while the parties briefed this motion, and Plaintiff now seeks to introduce two of his 4 declarations at trial. Plaintiff again does not dispute the late disclosure, and can only 5 introduce the evidence if it establishes harmlessness or substantial justification. See Yeti, 6 259 F.3d at 1106. 7 Plaintiff fails to show, and barely even addresses, harmlessness or substantial 8 justification. Instead, Plaintiff focuses on the United States’s conduct during discovery. 9 Plaintiff also cites United States v. Bachsian, 4 F.3d 796, 799 (9th Cir. 1993) to support its 10 argument that because Plaintiff included the declarations as trial exhibits, the United States 11 had notice of them and could not be surprised. That case, however, does not address 12 automatic Rule 37(c) exclusions. See id. It only addresses the residual hearsay exception. 13 The United States would be harmed by allowing these declarations because it cannot depose 14 Mr. Dunster. Although the United States asked to depose Mr. Dunster during discovery, it 15 appears Plaintiff led the United States to believe that Mr. Dunster was too ill to be deposed 16 and also would not be used as a witness at trial. Plaintiff gives no justification for its failure 17 to identify Mr. Dunster as a witness or to timely disclose the declarations when they were 18 made. And Plaintiff cannot now use his declarations after disclosing them after the deadline 19 and denying the United States an opportunity to depose him. 20 But even if Plaintiff could establish harmlessness or justification, the declarations 21 would still be inadmissible. Plaintiff claims they are admissible under Federal Rule of 22 Evidence 807, the residual hearsay exception. But one of the exception’s elements is that 23 the “evidence must have circumstantial guarantees of trustworthiness.” Bachsian, 4 F.3d at 24 798. Here, the evidence lacks any guarantee of trustworthiness. 25 Documents prepared for purposes of litigation lack the guarantee of trustworthiness 26 that Rule 807 requires. See Wilander v. McDermott Int’l, Inc., 887 F.2d 88, 91–92 (5th Cir. 27 1989) (residual exception did not apply because statement prepared in anticipation of 28 litigation and was later contradicted by witness). Mr. Dunster signed these declarations in 4 08cv100 BTM (BLM) 1 the course of this litigation to help prepare Plaintiff’s Rule 30(b)(6) witness for a deposition. 2 Moreover, he was “[f]or many years . . . a close personal friend of Don and Susanne 3 Ballantyne.” (Dunster Decl. re McCall St. & Fourth Ave. Properties ¶ 2.) The Ballantynes 4 are the people that owed the IRS money and the reason why the IRS placed a lien on the 5 property at issue here. Mr. Dunster could therefore have an interest in the outcome of the 6 litigation. 7 guarantees of trustworthiness. 8 9 For these reasons, Mr. Dunster’s declarations do not have circumstantial The Court excludes Mr. Dunter’s declarations under Rule 37(c), and also finds that they would not qualify under the residual hearsay exception. 10 11 3. Other Trial Exhibits 12 The United States also moves to exclude four trial exhibits based on their late 13 disclosure: (1) photographs of real property located at 3207 McCall Street, San Diego, CA 14 (Trial Exs. 1054–1080, 4035–4047) ; (2) photographs of real property located at 1280 Fourth 15 Ave., San Diego, CA (Trial Exs. 4048–4057); (3) a spreadsheet summarizing costs of 16 remodeling the McCall Street property; and (4) a title report for the McCall Street property. 17 Again, Plaintiff does not dispute late disclosure, and must therefore show harmlessness or 18 substantial justification. 19 20 A. Photographs 21 When the United States filed its reply brief, Plaintiff still had not produced several of 22 the photographs to the United States. Plaintiff only listed them in its pre-trial disclosures. 23 Plaintiff provides no justification for its failure to disclose and produce these photographs in 24 a timely manner. 25 Plaintiff does, however, argue that its failure is harmless. Plaintiff focuses on the 26 United States’s failure to take its own photographs during discovery. But that is largely 27 irrelevant to whether Plaintiff’s failure to disclose was harmless. Nevertheless, the Court 28 finds that the late disclosure of the photographs is relatively harmless because the United 5 08cv100 BTM (BLM) 1 States may now take its own photographs if it wishes to do so. 2 photographs, the United States discovers changed circumstances or other grounds for 3 showing harm, it may renew its motion to strike on this ground. 4 5 If upon taking its Plaintiff must make the McCall Street and Fourth Ave. properties available for photographing within thirty days of the filing of this order. 6 7 B. Spreadsheet of Remodeling Costs 8 Plaintiff intends to have Clark Ballantyne testify about the costs of remodeling the 9 McCall Street property. To support his testimony, Plaintiff has created a spreadsheet of 10 those costs, which summarizes the receipts and other documents associated with the 11 remodel. Plaintiff disclosed neither the underlying documents nor the spreadsheet on time. 12 Plaintiff does not explain why it failed to timely disclose the documents, but argues that its 13 failure is harmless because it will allow the United States to review the underlying 14 documents. 15 The Court finds that Plaintiff’s failure was not harmless. Although the United States 16 deposed Clark Ballantyne, it did not have the opportunity to ask him, or anyone else, 17 questions about the documents comprising the spreadsheet. The United States therefore 18 cannot adequately probe the accuracy of the spreadsheet. Plaintiff has failed to establish 19 harmlessness. 20 21 C. Title Report for McCall Street Property 22 Plaintiff seeks to introduce at trial a title report for the McCall Street property which 23 was not timely disclosed. In fact, when the parties briefed this motion, Plaintiff had not yet 24 obtained it. Plaintiff makes virtually no effort to show that its untimely disclosure was either 25 harmless or justified. It merely argues that because the title report will be produced at some 26 point before trial, the United States cannot be surprised or unable to prepare for it. 27 The Court finds that whether or not the title report is harmful depends on its contents. 28 It may contain information that the United States would have asked deponents about, or it 6 08cv100 BTM (BLM) 1 may not. And the title report might be harmful in other ways that the parties have not 2 considered because Plaintiff has not produced it. Plaintiff must produce the title report within 3 thirty days of the filing of this order. The United States may then renew its motion to strike 4 if it wishes to do so. 5 6 IV. CONCLUSION 7 The Court GRANTS in part and DENIES in part Defendant’s motion to strike [Doc. 8 57]. The Court excludes the two Dunster declarations and the spreadsheet representing 9 remodeling costs. The Court orders Plaintiff to produce its title report within thirty days of the 10 filing of this order. Plaintiff must make the McCall Street and Fourth Ave. properties available 11 for photographing within thirty days of the filing of this order. 12 Plaintiff must also produce the expert reports of Ms. Sullivan and Mr. Cavanagh within 13 twenty-one days of the filing of this order. Plaintiff must make them available for depositions 14 within forty-five days of the filing of this order. The United States, if it chooses to do so, shall 15 designate a rebuttal expert and file an expert report within thirty days of deposing Plaintiffs’ 16 experts. Due to time constraints, Plaintiff may not depose the United States’s rebuttal expert. 17 Lastly, the United States has leave to file a motion for alternative sanctions under Rule 37(c). 18 19 IT IS SO ORDERED. 20 21 DATED: June 1, 2010 22 23 Honorable Barry Ted Moskowitz United States District Judge 24 25 26 27 28 7 08cv100 BTM (BLM)
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