Smith v. Walley et al
ORDER denying without prejudice 35 State Farm's Motion to Exclude evidence of its settlement with Fannie Burks; pltf's Motions to Compel 29 30 are granted as stated herein. Signed by Judge Susan Webber Wright on 10/13/11. (vjt)
IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF ARKANSAS
WILLIAM DON SMITH,
TIMOTHY WALLEY and
STATE FARM FIRE AND CASUALTY
Plaintiff William Don Smith brings this action for civil damages against Timothy Walley
and State Farm Fire and Casualty Company (State Farm) alleging that he began investing in
State Farm at the behest of Walley, at the time an agent for State Farm, but that he subsequently
learned in 2010 that Walley was operating a “Ponzi/Madoff scheme under State Farm’s
umbrella.” Plaintiff asserts fraud, tort of outrage, breach of contract, and Arkansas’s crime
victims civil liability statute (Ark. Code Ann. § 16-118-107) against Walley, and breach of
contract, negligence, negligent supervision, and negligent retention against State Farm.1
By Order entered July 26, 2011 [doc.#26], the Court granted State Farm’s motion
[doc.#20] for a Protective Order and that same day entered a Protective Order Regarding
Confidential Information [doc.#27]. Subsequently, the parties encountered difficulties with
discovery and filed the following motions: (1) Plaintiff’s first motion to compel w/brief
incorporated [doc.#29]; (2) Plaintiff’s second motion to compel [doc.#30]; and (3) State Farm’s
The parties have informed the Court that Walley died apparently of a heart attack following the filing of
motion to exclude evidence of its settlement with Fannie Burks and brief in support [doc.#’s 35,
36]. State Farm filed a response and brief in support to Plaintiff’s motions to compel [doc.#’s
31, 32] and Plaintiff filed a reply to State Farm’s response [doc.#33], a supplemental brief in
support of Plaintiff’s first and second motions to compel [doc.#41], and a response to State
Farm’s motion to exclude evidence of its settlement with Fannie Burks [doc.#42].
The Court commenced a telephone conference on these motions on the afternoon of
September 26, 2011, but it soon became apparent that a live hearing would be required to
adequately address the parties’ discovery disputes. That hearing was held on the afternoon of
October 11, 2011.
For reasons stated from the bench at the conclusion of the hearing, IT IS HEREBY
(1) Defendant State Farm's motion to exclude evidence of its settlement with Fannie
Burks [doc. #35] is DENIED WITHOUT PREJUDICE.
(2) Plaintiff's first and second motions to compel [doc. #'s 29, 30] are GRANTED as
follows: (a) Defendant State Farm is directed to prepare a privilege log as to matters it deems
protected under the attorney client privilege or work product doctrine and shall submit the
privilege log to opposing counsel; (b) Defendant State Farm is directed to provide Plaintiff unredacted copies of documents concerning Walley and other State Farm customers or purported
customers;2 and (c) Defendant State Farm is directed to provide Plaintiff a copy of its settlement
As stated from the bench, the identities of third parties who had dealings with Walley
will not be revealed without leave of Court.
agreement/release concerning Fannie Burks.3
IT IS SO ORDERED this 13th day of October, 2011.
/s/Susan Webber Wright
UNITED STATES DISTRICT JUDGE
As stated from the bench, the Court makes no ruling at this time regarding the
admissibility of the Fannie Burks' settlement agreement. However, the Court finds that the
agreement is relevant and reasonably calculated to lead to the discovery of admissible evidence.
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