United States District Court, D. Arizona
ORDER
Honorable Steven P. Logan United States District Judge
Plaintiff
Prosight-- Syndicate 1110 At Lloyd's (the
“Plaintiff”) filed suit against American Builders
and Developers LLC (“ABD”) seeking a declaratory
judgment that it is not liable to indemnify ABD for any
damages awarded pursuant to Maria Virginia Huizache and
Florenciano Axinicuilteco's (the “Claimants”)
lawsuit.[1] The Court issued an Order (Doc. 143)
granting the Claimants' motion for summary judgment (the
“SJ Motion”) (Doc. 74). The Plaintiff filed a
motion for reconsideration (Doc. 146), and the Court granted
the motion for reconsideration and vacated its Order granting
the SJ Motion. (Doc. 184) After the Court's ruling on the
SJ Motion, the Claimants supplemented their discovery
disclosures with several documents (the
“Documents”), including correspondence between
Claimants' counsel and ABD's counsel.
The
Plaintiff filed this motion for sanctions (the
“Motion”) seeking sanctions against the Claimants
for their delayed disclosure of the Documents. (Doc. 181) The
Plaintiff argues that the Claimants waited to disclose the
Documents in order to influence the Court's ruling on the
SJ Motion. (Doc. 181-1 at 6) The Motion was fully briefed on
July 8, 2019, and oral argument was requested. (Docs. 186,
187) Because it would not assist in resolution of the instant
issues, the Court finds the pending motion is suitable for
decision without oral argument. See LRCiv. 7.2(f);
Fed.R.Civ.P. 78(b); Partridge v. Reich, 141 F.3d
920, 926 (9th Cir. 1998). The Court's ruling is as
follows.
A party
that fails to provide information required by Rule 26(a) or
(e) “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). A district court has
“particularly wide latitude” in its discretion to
issue sanctions under Rule 37(c)(1). Ollier v. Sweetwater
Union High Sch. Dist., 768 F.3d 843, 859 (9th Cir.
2014).
The
Plaintiff moves for sanctions against the Claimants, arguing
that they failed to produce the Documents in discovery until
after the Court had ruled on the Claimants' SJ Motion.
(Doc. 181 at 2) The Plaintiff argues that the Claimants
intentionally withheld the Documents in order to obtain a
favorable ruling on the SJ Motion based on “an
incomplete and inaccurate record of the facts.” (Doc.
181 at 3) The Plaintiff does not address whether the
Claimants' delayed disclosure was substantially
justifiable. Instead, the Plaintiff argues that the
Claimants' delayed disclosure was not harmless because
the delayed disclosure (i) prevented the Court from
considering the withheld evidence in deciding the SJ Motion;
(ii) provided evidence that is dispositive of the
Claimants' counterclaims; and (iii) prevented the
Plaintiff from asserting arguments related to the
Claimants' stipulated judgment with ABD. (Doc. 181-1 at
14)
In
response, the Claimants argue that the Motion should be
denied because they did not violate FRCP 37. (Doc. 186 at 9)
The Claimants state that the Documents were not requested by
the Plaintiff, and the Claimants only disclosed the Documents
in order for the record in this case to remain consistent
with the records in two related cases pending before the
Maricopa County Superior Court. (Doc. 186 at 3) The Claimants
do not substantively address whether their delayed disclosure
was substantially justified. Instead, the Claimants provide
the Court with a detailed explanation of the timing of their
supplemental disclosures of the Documents. (Doc. 186 at 3-6)
Separately, the Claimants argue that their delayed disclosure
was harmless because (i) the Plaintiff was able to depose
witnesses about the Documents; (ii) the Documents were
disclosed prior to the discovery deadline on July 26, 2019;
and (iii) the Court has already vacated its ruling on the SJ
Motion.
At this
time, the Court declines to exercise its discretion to impose
sanctions against the Claimants. The Court is persuaded by
the Claimants' statement that the Documents, which are
primarily communications between Claimants' counsel and
ABD's counsel, are not the type of material that is
generally or immediately discoverable. The Court is not
persuaded by the Plaintiffs arguments related to the SJ
Motion, as the Court has already granted the Plaintiffs
motion for reconsideration and vacated its Order granting the
SJ Motion. (Doc. 184) Furthermore, the Court's review of
the Documents demonstrates that the correspondence between
Claimants' counsel and ABD's counsel did not harbor
any “smoking gun” statements or admissions about
the viability of this case. The correspondence reflected
expected conversations amongst counsel seeking to develop a
litigation strategy. The Court also finds that the Documents
were disclosed prior to the discovery deadline, and the
Plaintiff has not been prejudiced because it has been able to
depose multiple people on the issues described in the
Documents. (Doc. 179 at 2; Doc. 187 at 5) For all of these
reasons, the Court finds that the delayed disclosure of the
Documents was harmless and does not require sanctions under
FRCP 37. Accordingly, IT IS ORDERED that
Plaintiffs Motion for Sanctions (Doc. 181) is
denied.
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Notes:
[1] In January 2016, the employee of a
subcontractor was killed while working at the location of
ABD's construction project. The Claimants, as the
decedent's parents, brought a wrongful death action
against ABD, among others, in Arizona state court. The
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