Meller v. Meller Management, LLC et al
MEMORANDUM OPINION AND ORDER denying 37 Motion for Partial Summary Judgment; granting in part and denying in part 52 Motion for Summary Judgment; denying 60 Motion to Strike ; denying 66 Motion to Strike ; granting in part and denying in part 30 Motion for Summary Judgment. Signed by Honorable Robert T. Dawson on June 8, 2011. (dmc)
IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF ARKANSAS
HOT SPRINGS DIVISION
STEPHEN A. MELLER, INDIVIDUALLY;
AS TRUSTEE OF STEPHEN A. MELLER
TRUST; AND AS TRUSTEE OF STEPHEN
A. MELLER DESCENDANTS SEPARATE TRUST
Civ. No. 10-6018
MELLER MANAGEMENT, LLC;
SALLY W. MELLER, L.P.; AND
COMMUNITY FIRST TRUST COMPANY
MEMORANDUM OPINION AND ORDER
Currently before the Court are Separate Defendants Meller
Management, LLC (“MM, LLC”) and Sally W. Meller, L.P.’s (“SWM, LP”)
Motion for Summary Judgment and supporting documents (Docs. 30-32)
and the parties’ responses and replies (Docs. 40-42 & 44); Plaintiff
supporting documents (Docs. 37-39) and the parties’ responses and
replies (Docs. 45-49 & 51); Separate Defendant Community First Trust
Company’s (“Community”) Motion for Summary Judgment and supporting
documents (Docs. 52-54) and the parties’ responses and replies (Docs.
57-58 & 68); Plaintiff Stephen A. Meller’s Motion to Strike and
supporting documents (Docs. 60-61) and the parties’ responses and
replies (Docs. 62-64); and Separate Defendant Community’s Motion to
Strike and supporting documents (Docs. 66-67) and Plaintiff’s
response (Doc. 76).
Page 1 of 24
For the reasons reflected herein, Separate Defendants MM, LLC
and SWM, LP’s Motion for Summary Judgment (Doc. 30) is GRANTED in
part and DENIED in part; Plaintiff’s Motion for Partial Summary
Judgment (Doc. 37) is DENIED; Separate Defendant Community’s Motion
for Summary Judgment (Doc. 52) is GRANTED in part and DENIED in part;
Plaintiff’s Motion to Strike (Doc. 60) is DENIED; and Separate
Defendant Community’s Motion to Strike (Doc. 66) is DENIED.
Sally W. Meller created several entities as part of her estate
plan to serve the purpose of transferring significant assets.
W. Meller had three children: Carol Sue Meller, Stephen Andrew
Meller, and Lucinda Meller-Miller.
The assets from her estate were
to be distributed to specific devisees, with the balance to be
distributed to Carol, Lucinda, and the Stephen A. Meller Trust (“SAM
trust”) and Stephen A. Meller Descendants Separate Trust (“SAM
On December 31, 1999, Sally W. Meller restated the Sally W.
Meller Living Trust (“SWM Living Trust”) which was originally created
on February 5, 1993.
Sally W. Meller also formed the SWM, LP for
the purpose of holding most of her assets.
SWM, LP was comprised
of MM, LLC as 1% owner and general partner; the Sally W. Meller Family
Trust (“SWM Family Trust”) as 99% owner and limited partner; and other
Page 2 of 24
From its creation, Carol, Sally W. Meller’s oldest daughter,
served Trustee for the SWM Living Trust.
At the time, Carol also
served as the managing member of MM, LLC.
Sometime after August 24,
2000, Sally amended both the SWM Living Trust and MM, LLC to remove
Carol as trustee of the SWM Living Trust and managing manager of MM,
On October 24, 2000, Sally executed the Second Amendment to the
SWM Living Trust, which among other things established two trusts,
the SAM Trust and the SAM Descendants Separate Trust, for the benefit
The amendment placed Stephen’s inheritance in the two
trusts until certain requirements were met.
Stephen’s son, served as trustee of these trusts.
On or about September 20, 2001, Community was named successor
trustee to the SWM Living Trust and operating manager of MM, LLC,
the general partner and managing member of the SWM, LP.
Sally W. Meller died.
On or about June 29, 2009, Spirit Meller
declared that Stephen had complied with the requirements to enable
him to receive his inheritance held in trust.
On or about September
15, 2009, Community resigned as operating manager of MM, LLC.
1 The parties dispute whether Stephen, individually, or the SAM Trust and/or SAM
Descendants Separate Trust are limited partners of the SWM LP.
2 Article XIII of the Second Amendment to the SWM Living Trust states that Stephen’s
inheritance would be held in trust until the “completion of the re-hab program
and eighteen (18) months of clean and sober living[.]”
Page 3 of 24
Following Community’s resignation,
Lucinda, Sally W. Meller’s
youngest daughter, became operating manager of MM, LLC.
On March 4, 2010, Plaintiff, Stephen, individually and in his
stated capacity as trustee of SAM Trust and SAM Descendants Separate
Trust, filed his Original Complaint (Doc. 1).
Stephen filed an Amended Complaint.
On April 29, 2010,
In his stated
capacity as trustee he sought an accounting, dissolution, and winding
up of SWM, LP.
In his stated individual capacity he claimed damages
for breach of fiduciary duty against MM, LLC and Community.
STANDARD OF REVIEW
A. Motion for Summary Judgment
Summary judgment is appropriate “if the pleadings, depositions,
answers to interrogatories, and admissions on file, together with
the affidavits, if any, show that there is no genuine issue as to
any material fact and that the moving party is entitled to a judgment
as a matter of law.”
Fed. R. Civ. P. 56(c).
The court must view
the facts and inferences from the facts in the light most favorable
to the non-moving party, and the burden is placed on the moving party,
to establish both the absence of a genuine issue of material fact
and that it is entitled to judgment as a matter of law.
Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986);
Nat’l Bank of Commerce of El Dorado, Arkansas v. Dow Chem. Co., 165
F.3d 602 (8th Cir. 1999).
Page 4 of 24
Once the moving party has met this burden, the non-moving party
may no longer rest on the allegations in its pleadings, but must set
forth specific facts by affidavit and other evidence, showing that
a genuine issue of material fact exists.
See Fed. R. Civ. P. 56(e);
City of Mt. Pleasant v. Associated Elec. Coop., 838 F.2d 268, 273-74
(8th Cir. 1988).
In order to withstand a moving party’s motion for
allegations with “sufficient probative evidence that would permit
a finding in his favor on more than mere speculation, conjecture,
Gregory v. Rogers, 974 F.2d 1006, 1010 (8th Cir. 1992).
B. Motion to Strike
Federal Rule of Civil Procedure 12(f) allows a district court
to “strike from a pleading an insufficient defense or any redundant,
immaterial, impertinent, or scandalous matter.”
A court enjoys
liberal discretion under Rule 12(f); however, motions to strike are
viewed with disfavor and rarely granted.
Stanbury Law Firm v.
I.R.S., 221 F.3d 1059, 1063 (8th Cir. 2000)(citing Lunsford v. United
States, 570 F.2d 221, 229 (8th Cir. 1977)(citing 5 Wright & Miller,
Federal Practice and Procedure: Civil § 1380 at 783 (1969))).
A. Motion for Summary Judgment by Meller Management, LLC and
Sally W. Meller, L.P.
Separate Defendants MM, LLC and SWM, LP, move the Court for
Page 5 of 24
summary judgment incorporating their arguments in their motion to
dismiss for failure to state a claim.
MM, LLC and SWM, LP contend
Plaintiff’s claims for alleged breach of fiduciary duties are subject
to the three year statute of limitation pursuant to Arkansas Code
wrongdoings not prosecuted by the then acting trustee, Spirit Meller,
are waived against them, and any action could only lie against Spirit
Meller as trustee.
Separate Defendants alternatively argue that any
acts of self-dealing and mismanagement with respect to the SWM LP,
the SWM Living Trust, and the Meller Family Trust, by and through
its managers, Carol and Separate Defendant Community First Trust
Company, were authorized by the Settlor of the Trust, Sally W. Meller.
Separate Defendants further argue that Plaintiff lacks standing to
sue as his actions are impermissible derivative actions and that
Plaintiff has forfeited any interest he may have had in the SWM Living
Trust, or the Meller Family Trust by violating the in terrorem or
Finally, Separate Defendants argue Plaintiff’s
action for dissolution and winding up of the SWM, LP may only be based
upon a finding under Arkansas Code Annotated § 4-47-802.
Plaintiff responds that although the three year statute of
limitations applies to allegations for breach of fiduciary duties,
it does not bar his individual causes of action for breach of
fiduciary duties against MM, LLC and SWM, LP for they did not accrue
Page 6 of 24
until June 29, 2009, the date he complied with the terms of the Second
Further, Plaintiff argues that the statute of limitation
does not bar his claims because his incompetency tolled the statute
of limitations, for himself as beneficiary and trustee, and the
Plaintiff also argues that Separate Defendants misstate his
claims because the transactions complained of were unauthorized by
the trust, made in bad faith, and unfair to the trust.
contends a direct action is permissible because the transactions
complained of were not injuries suffered by the limited partnership
as a whole.
Plaintiff also argues that he has not forfeited his
interest in the SWM Living Trust due to a no-contest provision because
he does not seek to impair or invalidate the provision of the SWM
Living Trust; further, the actions taken by Defendants were not in
good faith, and no provision provides against attacking or seeking
to impair a gift allegedly pursuant to the SWM Living Trust.
limitations bars Plaintiff’s claims against them.
submitted detail physical, mental, and psychological conditions that
sufficiently set forth specific facts reflecting that a genuine issue
of material fact exists as to whether Stephen was incapacitated and
at what time he recovered.
(See Doc. 41, Exhibits G through N).
Specifically, Plaintiff’s submissions detail a history of traumatic
Page 7 of 24
disorder, chronic substance abuse, comas, and seizures, among other
In light of the evidence, the Court finds that there
is a genuine issue of material fact as to whether Plaintiff was
incapacitated as to toll the applicable statute of limitations.
The fact that there is an issue as to Plaintiff’s competency
does not end the inquiry.
Relying on Montin v. Estate of Dale
Johnson, 636 F.3d 409 (8th Cir. 2011), the Court will defer ruling
on the issue of Plaintiff’s competency for the pretrial hearing
scheduled for Friday, June 10, 2011 at 1:00pm.
Id. at 415 (holding
“[w]e adopt the view . . . [that] the court rather than the jury is
to resolve the factual questions surrounding a plaintiff’s mental
The parties are instructed to present any and all
evidence concerning the Plaintiff’s competency relating to the issue
of equitable tolling.
The Court advises the parties that although
other issues may be addressed at the pretrial hearing, the primary
issue will be Plaintiff’s competency.
The Court further advises the
parties that a finding of competency could result in the applicable
statute of limitation barring much of Plaintiff’s claims.
Second, and notwithstanding the Court’s finding above, the
Court declines to the adopt Separate Defendants’ argument that
tolling does not apply to the former trustee therefore Plaintiff’s
Page 8 of 24
reliance on Mason v. Sornell, 260 Ark. 27 (1976), is misplaced as
it deals with a guardianship relationship and the incapacity of the
ward, and unlike a guardian, the trustee has the right by statute
to sue and be sued in his name.3
law directly on point.
The parties however cite to no case
The Court, reviewing the arguments under the
summary judgment standard cannot conclude that Stephen’s claims are
barred by the statute of limitations as to himself as the beneficiary
or trustee, or were waived by the former trustee’s failure to
See Mason, 260 Ark. at 28 (1976)(holding a minor may sue
within the statutory period after attaining his majority, even where
the representative or trustee is barred by statute); see also Mason
v. Ford Motor Co., 755 F.2d at 121 (8th Cir. 1985)(holding the general
rule is that appointment of a guardian does not cause the statute
notwithstanding the Court’s reservation of a ruling on the issue of
Plaintiff’s competency--as to this argument and all remaining
incompetency tolls the statute of limitations for both Plaintiff and
the former trustee.
3 In its motion for summary judgment Separate Defendant Community similarly argues
the distinction between a guardian and a trustee in its discussion of Mason v.
Ford Motor Co., 755 F.2d 120 (8th Cir. 1985) and Emerson v. Southern Ry. Co., 404
So. 2d 576 (Ala. 1981), noting that where the legal title or right of action lies
in the guardian/trustee and not in the infant or incompetent, the statute of
limitations is not tolled.
Page 9 of 24
Third, as to Separate Defendants’ assertion that Plaintiff
lacks standing to sue and that any self-dealing was authorized, the
Court finds Plaintiff has met his burden to survive summary judgment
on these grounds.
As to Plaintiff’s claims relating to the
$50,000.00 reduction, the unpaid balance of certain promissory
notes, and the Grand Point property (including the alleged missing
sum of $161,000.00) Plaintiff has set forth sufficient facts that
show there are genuine issues of material fact. 4
Plaintiff points out there is a fact issue relating to the provision
in the SWM Living Trust which reduced Plaintiff’s inheritance by
Similarly, Plaintiff has shown there to be fact issues
relating to certain promissory notes alleged to be owing to the SWM
Living Trust and whether the respective “gift” provisions were indeed
Likewise, Plaintiff has shown there to be fact issues
relating to the Grand Point property and whether the transactions
involved were authorized.
Furthermore, as to these transactions,
Plaintiff has set forth sufficient facts for a finding that the
injuries suffered were unique to himself, and not shared by the SWM,
LP as a whole.
The Court however does not find Plaintiff, as the
4 The Court notes that the $50,000.00 deduction in Plaintiff’s inheritance appears
to have occurred on or about January 22, 2004; the Grand Point property transactions
complained of occurred on or about April and May of 2000; and the transactions
involving certain promissory notes occurred at their latest in 2004 (commencing
at the final distribution of the SWM Living Trust). Based on the date of these
occurrence; a finding by the Court that Plaintiff was competent during the relevant
times; Plaintiff’s claims would be barred by the applicable statute of limitations.
Page 10 of 24
Defendants’ motion concerning the 725 Quapaw property therefore
finds it appropriate to grant the motion as to this property.
Fourth, the Court finds Plaintiff met his burden to survive
summary judgment on the issue of the no-contest clause and alleged
Accordingly, Separate Defendants MM, LLC and SWM, LP’s Motion
for Summary Judgment is GRANTED in part and DENIED in part.5
Defendants’ Motion for Summary Judgment is GRANTED as to it relates
to the transaction involving the 725 Quapaw property.
Defendants’ Motion for Summary Judgment is DENIED as it relates to
the $50,000.00 reduction in Stephen’s inheritance, the unpaid
balance of certain promissory notes, and the Grand Point property
(including the alleged missing sum of $161,000.00).
B. Motion for Partial Summary Judgment by Stephen A. Meller
Plaintiff moves the Court in his Partial Summary Judgment Motion
(Doc. 37) to order an accounting and dissolution and the winding up
of the SWM LP.
Plaintiff cites section 4-47-802 of the Arkansas Code
for the proposition that upon application by a partner a court may
order the dissolution of a limited partnership if it is not reasonably
practicable to carry on the activities of the limited partnership
5 Insofar as Separate Defendants MM, LLC and SWM, LP have incorporated their
arguments in their Motion to Dismiss (Doc. 3), that Motion is hereby DENIED.
Page 11 of 24
Plaintiff contends that Lucinda’s statement during her deposition
is an admission that renders dissolution of the limited partnership
(Doc. 39-2, Exhibit B).
Separate Defendants MM, LLC and SWM, LP (Doc. 45-48) deny that
a family member currently controls the SWM LP in spite of Sally
Meller’s wishes and denies an admission was made that it is
impractical to carry on the activities of the limited partnership.
Separate Defendants argue the alleged admission when presented in
its entirety shows that Lucinda’s statement expresses an opinion that
any impracticality to carry on the activities of the partnership as
intended was because of Plaintiff’s unreasonable conduct.
Separate Defendants also plead the affirmative defense of
unclean hands alleging Plaintiff made intentional attempts to
disrupt and frustrate the activities of the SWM, LP.
application by a partner the circuit court may order dissolution of
a limited partnership if it is not reasonably practicable to carry
on the activities of the limited partnership in conformity with the
A.C.A. § 4-47-802.
Paragraph 2 of the SWM,
LP Agreement of Limited Partnership, Character of Business, states
“[t]he character of the business of the Partnership shall be to: (a.)
acquire, hold, own subdivide, develop, maintain, manage, lease, and
Page 12 of 24
operate real property (b.) acquire, hold, own, invest and re-invest
publicly traded assets as well as other items of tangible and
intangible personal property, and (c.) to engage in all general
activities related or incidental thereto.”
Lucinda states in her affidavit that due to Plaintiff’s conduct,
the previous operating manager, Community, resigned, and because of
this, she had to occupy the position.
(Doc. 45, Exhibit A).
nonetheless states that it is not impractical to carry on the SWM,
LP with herself or another family member serving as the operating
manager of MM, LLC if Plaintiff ceases and desists certain conduct.
Lucinda also states that Sally Meller’s intention in the limited
partnership was to provide for her heirs over time and not for any
heir to “cash out”.
The Court viewing the facts and inferences from the facts in
the light most favorable to the non-moving party, finds it reasonably
practicable to carry on the activities of the limited partnership
in conformity with the partnership agreement.
Further, the Court
finds the statements by Lucinda were not a “pivotal admission” which
makes dissolution “obvious”.
Furthermore, pursuant to A.C.A. §
4-47-802 the Court has the discretion to order dissolution, which
it declines to exercise at this time.
Accordingly, Plaintiff’s Motion for Partial Summary Judgment
(Doc. 37) is DENIED.
Page 13 of 24
C. Motion for Summary Judgment by Community First Trust Company
Separate Defendant Community moves the Court for Summary
Judgment in its favor.
Community contends that its role
in the matter relates to a series of transactions which were carried
out pursuant to the terms of the SWM Living Trust.
these transactions involved property belonging to the SWM, LP,
occurred while Spirit Meller served as the Trustee for the trusts,
and that a majority of the transactions occurred well beyond the
applicable statute of limitations.
Community further argues the
management agreement of MM, LLC contains an exculpatory clause that
limits Community’s liability as manager of the SWM, LP to acts of
gross negligence, willful neglect of duty or fraudulent intent, and
Plaintiff has made no such claims.
Community also argues that
Plaintiff lacks standing to bring this suit as it is a derivative
action in which the SWM, LP is the proper plaintiff.
further argues that in any event the acting trustee, Spirit Meller,
executed a release in favor of Community which bars Plaintiff’s
Plaintiff contends in his Response (Doc. 57) that Separate
Defendant Community’s Motion for Summary Judgment (Doc. 52) should
Plaintiff argues he was incapacitated from December 1993
through June 29, 2009, therefore the statute of limitations to bring
suit for any wrongdoing is tolled.
Plaintiff also argues that he
Page 14 of 24
has standing to bring this suit because the injuries he claims are
unique to him and are not injuries to the SWM, LP.
argues that the exculpatory clause contained in MM, LLC’s organizing
documents does not protect Community from liability for gross
negligence, which is alleged in this matter.
argues that the release executed by Spirit Meller does not protect
Community because it is invalid and inapplicable to the injuries in
In its Reply to Plaintiff’s Response (Doc. 68) Community argues
Plaintiff fails to address paragraphs 24 through 29 of its summary
judgment motion, and summary judgment should be granted as it relates
to those claims. Community further argues that the remaining issues,
the $50,000 reduction, the use of proceeds from partnership property
to pay off the “Grand Point Property” and the failure to collect
promissory notes are barred by the statute of limitations.
addition, Community argues that the exhibits supplied by Plaintiff
in his Response, Exhibits G, H, I, J, K, L, M, and N should be stricken
and ignored by the Court pursuant to Rule 56 of the Federal Rules
of Civil Procedure.
Community argues that Plaintiff’s mental
capacity is immaterial as his claims belong to the SAM Trust and the
SAM Descendants Separate trust, both of which were controlled by
Spirit Meller and that therefore the statute of limitations bars the
Page 15 of 24
The Court first addresses Community’s argument that Plaintiff’s
claims are barred by the statute of limitations.
previously discussed the same argument made by Separate Defendants
MM, LLC and SWM, LP, and similarly denies Community’s motion for
summary judgment on this ground.
In addition, summary judgment on
grounds that Plaintiff’s claims are barred by the statute of
limitations because the previous trustee’s claims are barred by the
statute of limitations is also denied.
Second, Community’s motion for summary judgment on grounds that
the alleged exculpatory clause in the partnership agreement releases
liability is denied.
Paragraph 15.4 of the SWM LP Agreement of
Partnership states “[t]he General Partner shall not incur liability
to the Partnership or any other Partner for any mistakes or errors
in judgment or for any act or omission believed by the General Partner
in good faith to be within the scope of authority conferred upon him
by this Agreement; provided, however, that the General Partner may
be liable for any losses, costs or damages resulting from conduct
with respect to the Partnership amount to fraud, dishonesty, willful
neglect of duty, gross negligence, or a breach of his fiduciary duty
to the other Partners.”
(Doc. 1-1; ¶ 15.4).
Community identifies the sale of four specific parcels of real
estate (Lake Hamilton Self Storage, Salvatierra, Grand Point,
Cooper Creek), a transaction involving a debt to Regions bank, the
Page 16 of 24
promissory notes, as transactions forming the basis of Plaintiff’s
As previously discussed, viewing the evidence before the
Court in a light most favorable to the non-moving party, the Court
finds that there are genuine issues of material facts relating to
whether the transactions involving the $50,000.00 reduction, Grand
Point property, and certain promissory notes.
Court finds fact issues relating to whether Community’s conduct rose
to a level of misconduct that would remove the protections of the
exculpatory clause therefore summary judgment is denied as to these
Third, Community argues Plaintiff lacks standing to bring the
suit as a direct action because Plaintiff’s injuries are as a limited
partner and therefore should be brought as a derivative action.
Court finds that Community, as the moving party, has met its initial
burden in its motion for summary judgment, and that Plaintiff as the
non-moving party has failed to set forth specific facts by affidavit
and other evidence to show that a genuine issue of material fact
exists as to the issue of a direct action.
has not set forth sufficient facts to meet its burden that the
transaction involving the Lake Hamilton Self Storage, Salvatierra
property, and Cooper Creek property, and Regions Bank debt, are not
injuries suffered by the SWM, LP as a whole.
Page 17 of 24
See Golden Tee, Inc.
v. Venture Golf Schools, Inc., 333 Ark. 253, 260 (1998)(holding the
“prevailing criterion is whether the claimed injury is primarily to
the partnership and only indirectly to the partners through their
interest in the partnership–-a partnership claim-or is direct and
Accordingly, Community’s Motion for Summary Judgment is
granted as to the transactions involving Lake Hamilton Self Storage,
Salvatierra property, and Cooper Creek property, and the Regions Bank
See Fed. R. Civ. P. 56(e); City of Mt. Pleasant v. Associated
Elec. Coop., 838 F.2d 268, 273-74 (8th Cir. 1988).
Finally, Community argues that any liability has been waived
by a release executed by Spirit Meller.
(Doc. 52-12, Exhibit L).
The Court finds Plaintiff has met his burden to survive Community’s
Summary Judgment Motion as he has shown a genuine issue of material
fact as to the validity of the alleged waiver and/or release.
Accordingly, Community’s Motion for Summary Judgment (Doc. 52)
is GRANTED in part and DENIED in part.
Community’s Motion for
Hamilton Self Storage, Salvatierra property, Cooper Creek property,
and the Regions Bank debt is GRANTED.
Community’s Motion for Summary
Judgment as to the $50,000.00 reduction in Stephen’s inheritance,
the Grand Point property,
and the unpaid balance of certain
promissory notes is DENIED.
Page 18 of 24
D. Motion to Strike Affidavit of Janet K. Moore by Stephen A.
Plaintiff moves this Court to strike the affidavit of Janet K.
Moore which was attached to Community’s Motion for Summary Judgment.
(Doc. 52, Exhibit M).
Plaintiff argues that Community’s failure to
identify Moore as a potential expert witness until after the close
of discovery caused prejudice in that he was unable to depose Moore.
Separate Defendants MM, LLC and SWM, LP argue that Moore was
identified as a potential expert witness prior to the expiration of
the discovery deadline.
Furthermore, Separate Defendants do not
object to Plaintiff deposing Moore and therefore there are no grounds
for striking Moore’s affidavit or prohibiting testimony.
On January 13, 2011, this Court granted Plaintiff’s Motion (Doc.
28) seeking an extension of the discovery deadline and a continuance
of the trial date.
The Court rescheduled the trial date
to begin the week of June 20, 2011, and extended the discovery
deadline through March 21, 2011.
Federal Rules of Civil Procedure
Rule 37(c) states, in part, “[i]f 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).
The Court finds Separate Defendants MM, LLC and SWM, LP met the
Page 19 of 24
disclosure deadline for expert witness Moore.
MM, LLC and SWM, LP’s
Third Amended Response to Plaintiff’s first set of interrogatories
and request for production, its cover letter, and Certificate of
Service are all dated March 18, 2011.
(Doc. 63-2, Exhibit B).
Lucinda’s verification and cover letter of MM, LLC and SWM LP’s Third
Amended Response, sent separately along with a copy of the Response,
is dated March 22, 2011.
(Doc. 63-2, Exhibit B).
The Court does
not conclude that a failure to include the verification of Lucinda
along with the Amended Response disclosing Moore as a potential
expert witness renders the disclosure noncompliant with Rule 26(a)
or (e), nor has it prejudiced the Plaintiff.6
The Court finds MM, LLC and SWM, LP’s disclosure of witness Moore
timely and pursuant to applicable rules.
Motion to Strike the Affidavit of Janet K. Moore (Doc. 60) is DENIED.
E. Motion to Strike Exhibits G through N by Community First Trust
Separate Defendant Community moves the Court to strike Exhibits
G through N of Plaintiff’s Response to Community’s Motion for Summary
Community argues Exhibits G through N fail
to comply with Federal Rules of Evidence Rule 803(6) because they
6 The Court notes that Plaintiff argues that he has been prejudiced because he
could not have deposed Moore within the allotted time, however no efforts known
by the Court to depose Moore have been attempted, although the parties moved the
Court to extend the discovery deadline to depose Carol (Doc. 55) to which the Court
granted. Furthermore, MM, LLC and SWM, LP, state in their Response that they have
no objection to Plaintiff taking the deposition of Moore.
Page 20 of 24
are not certified by a custodian of records and are inadmissible
hearsay, and therefore should be stricken pursuant to Rule 56 of the
Federal Rules of Civil Procedure.
Plaintiff argues in his response that the records in question
are verified by the affidavit of Stephen, who has knowledge of the
contents of the same. Plaintiff also argues that Rule 56 contemplates
that a Response to Motion for Summary Judgment may include materials
that are unsupported by an affidavit.
Plaintiff further argues that
the records referenced by Community are not hearsay because they
contain statements made for the purpose of medical diagnosis.
Rule 56(c)(4) states “[a]n affidavit or declaration used to
support or oppose a motion must be made on personal knowledge, set
out facts that would be admissible in evidence, and show that the
affiant or declarant is competent to testify on the matters stated.”
Fed. R. Civ. P. 56(c)(4).
requirements of Rule 56(c)(4) for Exhibits G through N by submission
of a Verification along with his Statement of Facts associated with
his Response to Separate Defendant MM’s Motion for Summary Judgment,
which detail the origins and contents of Exhibits G through N.
In addition, the Court finds the foundation for which Community
moves to strike Exhibits G through N, i.e., they are inadmissible
hearsay, fails as medical records are admissible under Federal Rules
of Evidence 803(4) and 803(6) and may be considered for summary
Page 21 of 24
See Buttice v. G.D. Searle & Co., 938 F.Supp. 561, 566
(E.D. Mo., 1996)(citing Hughes v. Joliet Correctional Center, 931
F.2d 425, 428 (7th Cir. 1991)); see also Van Horn v. Best Buy Stores,
L.P., 526 F.3d 1144, 1147-48 (8th Cir. 2008).
In addition, Plaintiff’s Response to Community's Motion to
Strike includes affidavits of the Custodian of Records for Santa
Monica Hospital, Daniel Freeman Marian Hospital, and the Los Angeles
County Sheriff’s Department Medical Services.
B, C, D).
(Doc. 76, Exhibits
Also included are supplemental affidavits by the Los
Angeles County Department of Health Downtown Mental Health Center,
Dr. Edward Cavanaugh and Dr. George K. Henry (Doc. 76, Exhibits E
& F) and the affirmation by the Custodian of Record for the Los Angeles
County Department of Mental Health Downtown Mental Health Center.
(Doc. 76, Exhibit G).
The affidavit, supplemental affidavits, and
affirmations provided by the Plaintiff from the custodians above
relate to their respective and relevant portions of Exhibits G
Therefore, notwithstanding the Court’s finding that
Plaintiff’s submissions of Exhibits G through N have been submitted
pursuant to Rule 56 for consideration in Plaintiff’s Motion for
supplemental affidavits and declarations are sufficient to “cure”
the complained of deficiency.
See DG&G, Inc. v. FlexSol Packaging
Page 22 of 24
2009)(“[s]ubsequent verification or reaffirmation of an unsworn
expert’s report, either by affidavit or deposition, allows the court
to consider the unsworn expert’s report on a motion for summary
Accordingly, Separate Defendant Community’s Motion to Strike
Exhibits G through N of Plaintiff’s Response to Community’s Motion
for Summary Judgment (Doc. 66) is DENIED.
For the reasons stated above, Separate Defendants MM, LLC and
SWM, LP’s Motion for Summary Judgment (Doc. 30) is GRANTED in part
and DENIED in part; Plaintiff’s Motion for Partial Summary Judgment
(Doc. 37) is DENIED; Separate Defendant Community’s Motion for
Summary Judgment (Doc. 52) is GRANTED in part and DENIED in part;
Plaintiff’s Motion to Strike (Doc. 60) is DENIED; and Separate
Defendant Community’s Motion to Strike Exhibits G through N (Doc.
66) is DENIED.
The Court advises the parties that notwithstanding the Court’s
ruling, either side may request the Court reconsider its ruling in
view of the evidence presented at trial.
This matter remains set for a jury trial to begin Monday, June
A pre-trial conference is set for Friday, June 10, 2011
at 1:00 p.m.
Page 23 of 24
IT IS ORDERED this 8th day of June, 2011.
/s/ Robert T. Dawson________
Honorable Robert T. Dawson
United States District Judge
Page 24 of 24
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