Chen v. Cayman Arts, Inc et al
Filing
145
ORDER granting 120 Third-Party Plaintiff Cayman Arts, Inc.'s Motion to Withdraw Admissions (as to Third-Party Defendants' Requests for Admission); granting 123 Defendants', Cayman Arts,Inc. and Scott R. Steele, Motion to Withdraw Admissions as to Plaintiff's First Request for Admissions. Please see Order for details. Signed by Magistrate Judge Barry S. Seltzer on 6/29/2011. (kas)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 10-80236-CIV-COHN/SELTZER
CAREY CHEN,
Plaintiff,
vs.
CAYMAN ARTS, INC., a Florida corporation,
and SCOTT R. STEELE, an individual,
Defendants.
____________________________________/
CAYMAN ARTS, INC., a Florida corporation,
Counter-Plaintiff,
vs.
CAREY CHEN,
Counter-Defendant,
____________________________________/
CAYMAN ARTS, INC., a Florida corporation,
Third-Party Plaintiff,
vs.
FISHER BLUE WATER GALLERIES, LLC, a
Florida limited liability company, MONIQUE
COMFORT, individually, GRAY INGRAM,
individually, and JOHN AND JANE DOE,
unknown entities,
Third-Party Defendants,
____________________________________/
ORDER ON MOTIONS TO WITHDRAW ADMISSIONS
THIS CAUSE is before the Court on Third-Party Plaintiff Cayman Arts, Inc.’s Motion
to Withdraw Admissions (as to Third Party Defendants’ Requests for Admissions) (DE 120)
and Defendants’ (Cayman Arts and Scott R. Steele) Motion to Withdraw Admissions as
to Plaintiff’s First Request for Admissions (DE 123) and the Motions having been fully
briefed and the Court being sufficiently advised, it is hereby Ordered that the Motions are
GRANTED for the reasons set forth below.
BACKGROUND
1.
On April 6, 2011, both Plaintiff Carey Chen (“Chen”) and Third-Party
Defendants, Fisher Blue Water Galleries, LLC, Monique Comfort, and Gray Ingram
(collectively, “Fisher”), served on Defendant/Third-Party Plaintiff, Cayman Arts, Inc. and
Defendant Scott R. Steele1 (collectively, “Cayman”) Requests for Admissions; Cayman’s
responses to the Requests for Production were due May 9, 2011.2
2.
On April 22, 2011 (before Cayman’s and Steele’s responses to the Requests
for Admissions were due), the District Court permitted counsel for Cayman Arts, Inc. and
Scott R. Steele to withdraw its representation and gave them until May 6, 2011, to obtain
substitute counsel; the Court also extended the discovery deadline (which had already
ended on October 29, 2010) to May 13, 2011. Subsequently, on April 27, 2011, the District
Court extended the deadline for Cayman Arts and Steele to obtain counsel to May 23,
2011, and it reset the discovery deadline to June 10, 2011, and the trial for the two-week
1
Scott Steele is the owner and principal of Cayman Arts, Inc.
2
Under Federal Rules of Civil Procedure 36(a)(3), a party is required to respond
to a Request for Admission within 30 days of service. Here, the Requests for Admissions
were served on Cayman on April 6, 2011; 30 days from that date would have been May
6, 2011. However, under Federal Rule of Civil Procedure 6(d), 3 days are added to the 30day period where (as here) the discovery requests are served by mail. Cayman Arts and
Steele’s responses, therefore, were due on May 9, 2011.
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period commencing September 6, 2011.
3.
When Cayman failed to respond to Plaintiff’s and Fisher’s Request for
Production by the due date (May 9, 2011), the matters contained therein were deemed
admitted. Fed. R. Civ. P. 36(a)(3).
4.
On May 23, 2011, two weeks after Cayman’s and Steele’s responses to the
Requests for Admissions were due, new counsel entered a Notice of Appearance on their
behalf.
5.
On June 10, 2011, Third-Party Defendant Fisher filed its Motion to Deem
Request for Admissions Admitted and Motion to Compel Responses to Interrogatories and
Requests to Produce, and on June 17, 2011, Plaintiff Chen filed his Motion to Compel
Response to Interrogatories and Requests for Production and Motion to Deem Request
for Admissions Admitted.
6.
One June 15, 2011, Third-Party Plaintiff Cayman Arts filed its instant Motion
to Withdraw Admissions (as to Third Party Defendants’ Requests for Admissions) (DE 120)
and on June 16, 2011, Defendants Cayman Arts and Scott R. Steele filed their instant
Motion to Withdraw Admissions as to Plaintiff’s First Request for Admissions (DE 123).
Simultaneously with filing the Motions to Withdraw, Cayman Arts (as part of its response
to Fisher’s discovery motion) filed its Answers to Fisher’s First Request for Admission (DE
119-3), and Cayman Arts and Steele (as part of their response to Plaintiff’s discovery
motion) filed their Answers to Plaintiff’s First Request for Admission (122-1 and 122-2,
respectively).
MOTIONS TO WITHDRAW ADMISSIONS
Federal Rule of Civil Procedure 36(a) authorizes a party to serve any other party
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with a written request to admit the truth of matters relating to “facts, the application of law
to fact, or opinions about either” and “the genuineness of any described documents.” Fed.
R. Civ. P. 36(a)(1)(A) and (B). The party upon whom a request for admission is served has
30 days from service of the request to respond by a written answer that must “specifically
deny [the request], . . . state in detail why the answering party cannot truthfully admit or
deny it,” or assert an objection. Fed. R. Civ. P. 36(a)(3) and (4). If a party fails to respond
within the 30-day period (or within such time as the court permits or to which the parties
agree), the “matter is admitted.” Fed. R. Civ. P. 36(a)(3). “A matter admitted under [Rule
36] is conclusively established unless the court, on motion, permits the admission to be
withdrawn or amended.” Fed. R. Civ. P. 36(b). Withdrawal or amendment is permitted “if
it would promote the presentation of the merits of the action and if the court is not
persuaded that it would prejudice the requesting party in maintaining or defending the
action on the merits.” Id. As the Eleventh Circuit has noted, “[e]ssentially, Rule 36 is a
time-saver, designed ‘to expedite the trial and to relieve the parties of the cost of proving
facts that will not be disputed at trial.’ That is, when a party uses the rule to establish
uncontested facts and to narrow the issues for trial, then the rule functions properly.”
Perez v. Miami-Dade County, 297 F.3d 1255, 1268 (11th Cir. 2002) (emphasis in original)
(quoting 8A Charles Alan Wright, Arthur R. Miller, & Richard L. Marcus, Federal Practice
and Procedure § 2252 (2d ed.1994)).
Consistent with Rule 36(b), the Eleventh Circuit has set forth a two-prong test
governing the determination of whether a party should be permitted to withdraw or amend
admissions: “First, the court should consider whether the withdrawal will subserve the
presentations of the merits, and second, it must determine whether the withdrawal will
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prejudice the party who obtained the admissions in its presentation of the case.” Perez,
297 F.3d at 1264. “Rule 36(b)’s two-part test is much more than merely hortatory; it
emphasizes the importance of having the action resolved on the merits, while at the same
time assuring each party that justified reliance on an admission in preparation for trial will
not operate to his prejudice.’” Id. at 1265 (emphasis in original) (quoting Smith v. First Nat’l
Bank of Atlanta, 837 F.2d 1575, 1577-78 (11th Cir. 1988)).
The first prong of this test “emphasizes the importance of having the action resolved
on the merits and is satisfied when upholding the admissions would practically eliminate
any presentation on the merits.” Perez, 297 F.3d at 1266 (internal citations and quotation
marks omitted). The first prong of the Perez test is easily satisfied here.
This action arises out of a dispute between Plaintiff Chen, a nationally renowned
marine artist, and Defendants Cayman Arts and Steele involving an Employment
Agreement (and Addendum thereto) and a Trademark and Licensing Agreement. Plaintiff
has alleged, inter alia, that Cayman breached the Agreements by failing to promote the
sale of his art works; Cayman has asserted a counterclaim, alleging, inter alia, that Plaintiff
breached the Agreements. Additionally, Cayman has filed a Third-Party Complaint against
Fisher, in which he alleges that Fisher influenced Chen to terminate his Agreement with
Cayman and to appropriate Cayman’s confidential client list, pricing information, and other
confidential information. Cayman additionally alleges that Fisher, together with Chen,
improperly began to promote and sell Chen’s art works.
Plaintiff’s Requests for Admissions are highly significant, if not central, to (at least)
the breach of contract claims and counterclaims. By way of example, Plaintiff asks
Cayman Arts and Steele to admit that Plaintiff never failed to attend any events or
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appearances, to admit that Plaintiff devoted his best efforts and abilities in the performance
of his duties under the Agreements, to admit that Cayman did not devote its best efforts
either in the performance of its duties under the Agreements or in connection with the
distribution and sale of Plaintiff’s art works. And Fisher’s Requests for Admission go to the
very heart of the merits of Cayman’s Third-Party Complaint. Each of the 20 Requests asks
that Cayman admit that it has no evidence to support the various allegations of its claims
against Fisher. The Court, therefore, finds that the first prong of the Perez test has been
met; withdrawal of the admissions would aid in the “ascertainment of the truth and the
development of the merits.” Smith, 837 F.2d at 1577.
The Perez Court discussed the nature of the prejudice contemplated by the second
prong:
The prejudice contemplated by the Rule is not simply that the
party who initially obtained the admission will now have to
convince the fact finder of its truth. Rather, it relates to the
difficulty a party may face in proving its case, e.g., caused by
the unavailability of key witnesses, because of the sudden
need to obtain evidence with respect to questions previously
answered by the admissions.
Perez, 297 F.3d at 1266 (quoting Smith, 837 F.2d at 1578) (quoting Brook Village N.
Assoc. v. Gen Elec. Co., 686 F.2d 66, 70 (1st Cir. 1982)).
Plaintiff notes that he must not only prove his own claims, but also defend against
Defendants’ counterclaim. He contends that his Requests for Admissions were designed
and directed to Defendants’ claims and allegations in this case. Additionally, Plaintiff
asserts that he “relied upon these matters being deemed admitted and intentionally did not
pursue the Defendants’ depositions or the depositions of a number of potential witnesses
prior to the June 10, 2011 discovery cut-off who [Plaintiff] believes have personal
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knowledge and evidence to rebut and refute any timely denial of Defendants’ admissions.”
Plaintiff’s Response at 4-5 (DE 134).
According to Plaintiff, he “would be seriously
prejudiced in his ability to develop the evidence necessary to rebut the Defendants’ own
claims and allegations in advance of trial if Defendants are permitted to withdraw their
admissions.”
The Court cannot credit Plaintiff’s assertion that he did not take Defendants’ and
other witnesses’ depositions because he was relying on Defendants’ deemed admissions.
First, this action has been pending for over seventeen months, and Defendants’
counterclaim has been pending for nearly ten months. It appears, however, that Plaintiff
has not taken a single deposition.3 Moreover, at the time Plaintiff served his Requests for
Admissions, the discovery deadline was May 6, 2011. Yet, Defendants’ responses were
not deemed admitted under Rule 36(a)(3) until May 9, 2011, when Defendants failed to
respond to the Requests. Hence, the May 6, 2011 discovery deadline had passed before
the Requests were deemed admitted. And Plaintiff did not request the Court to formally
deem the matters contained in its Requests admitted until June 13, 2011, after the
extended June 10, 2011 discovery deadline. As the Eleventh Circuit has observed, Rule
36 Request for Admissions are designed to expedite the trial and to relieve the parties of
the cost of proving facts that will not be disputed at trial. Perez, 255 F.3d at 1268
(emphasis in original) (internal quotations and citation omitted). However, when a party
serves a Request for Admission “with the wild-eyed hope that the other side will fail to
answer and therefore admit essential elements . . . the rule's time-saving function ceases;
3
According to Cayman, no party has taken any depositions in this action.
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the rule instead becomes a weapon, dragging out the litigation and wasting valuable
resources.”
Id.
Although Plaintiff failed to take Defendants’ or other witnesses’
depositions before the discovery deadline, the Court cannot conclude that Plaintiff’s failure
to do so was attributable to Plaintiff’s reliance on Defendants’ deemed admissions.
Third-Party Defendant Fisher contends that it too would be prejudiced by the
withdrawal of Cayman Arts’ admissions, but for a different reason. As previously noted,
Fisher’s Request for Admissions asked Cayman Arts to admit it has no evidence to support
20 of the allegations in Cayman Arts Third-Party Complaint. Fisher followed up its
Requests with Interrogatories requesting that Cayman Arts identify the facts it relied on to
support each denial of Fisher’s Request for Admissions. Fisher states that although
Cayman Arts responded to the Interrogatories, its responses were short on facts and each
included a “qualifier,” indicating that it was unable to fully answer the Interrogatory because
Fisher and Chen had failed to produce the discovery Cayman Arts had previously
requested, which discovery would enable Cayman Arts to respond. Fisher argues that if
the Court permits withdrawal of the deemed admissions (that Cayman Arts has no
evidence to support his claims) and permits Cayman Arts to now deny the Requests for
Admissions, Fisher will be prejudiced “if forced to go to trial on Cayman’s denial of the
[Requests for Admissions] on one hand and its failure to provide any facts [in response to
Interrogatories] to support its denials of the [Requests for Admissions] on the other hand.”
Third-Party Fisher’s Response at 8 (DE 133). But if Fisher believes that Cayman Arts’
interrogatory answers were deficient, it should have moved to compel better responses.
This Court, however, will not permit Fisher to use the interrogatory responses to bootstrap
the deemed admissions. In sum, the Court finds that the second prong of the Perez test
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has also been satisfied; neither Chen nor Fisher will suffer the type of prejudice
contemplated in Perez if Cayman Arts and Steele’s deemed admissions are withdrawn.
Based on the foregoing it is hereby ORDERED as follows:
1.
Third-Party Plaintiff Cayman Arts, Inc.’s Motion to Withdraw Admissions (as
to Third Party Defendants’ Requests for Admissions) (DE 120) is GRANTED and its
deemed admissions to the matters contained in Third-Party Defendants’ Request for
Admissions are withdrawn.
2.
Defendants’ Motion to Withdraw Admissions as to Plaintiff’s First Request for
Admissions (DE 123) is GRANTED, and Cayman Arts’ and Steele’s deemed admissions
to the matters contained in Plaintiff Chen’s Requests for Admissions are withdrawn.
3.
Cayman Arts Answers to Fisher’s First Request for Admission (DE 119-3),
and Cayman Arts and Steele their Answers to Plaintiff’s First Request for Admission (122-1
and 122-2, respectively) are accepted by the Court.
DONE AND ORDERED in Fort Lauderdale, Florida, this 29th day of June 2011.
Copies to:
All counsel of record
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