SUMMERVILLE v. COVINGTON COAL LLC et al

Filing 137

ORDER granting IN PART Defendant John Leaberry's 123 Motion for Reconsideration (see Order). Copy to Paul Moran and Peter Moran via US Mail. Signed by Magistrate Judge Tim A. Baker on 3/7/2016. (SWM)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION

GREGG T SUMMERVILLE,
Plaintiff,
vs.
COVINGTON COAL LLC,
PETER K MORAN,
PAUL MORAN,
MORAN COAL MANAGEMENT, LLC,
JOHN LEABERRY,
Defendants.

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No. 1:14-cv-02099-WTL-TAB

ORDER ON DEFENDANT’S MOTION TO RECONSIDER
Defendant John Leaberry asks the Court to amend a prior order by removing half of one
sentence in the background section. The Court stated, “Englemeier had been working with
Leaberry, who is an attorney and was the CFO of Covington at the time of the loan.” [Filing No.
121, at ECF p. 2.] Leaberry argues that his answer to the complaint denies that he was ever the
CFO of Covington. The Court disagrees. However, it appears that whether Leaberry was the
CFO at the time of the loan was not established in the pleadings. The Court thus grants
Leaberry’s motion in part.
Federal Rule of Civil Procedure 8(b)(6) states that “[a]n allegation … is admitted if a
responsive pleading is required and the allegation is not denied.” However, if the answering
party states that he has a lack of “knowledge or information sufficient to form a belief about the
truth of an allegation,” the allegation is effectually denied. Id. 8(b)(5).
Leaberry’s answer does not deny—and thereby admits—that he was previously the CFO
of Covington. In the amended complaint, Plaintiff Gregg T. Summerville alleges that “John

Leabery was and is the CFO, an officer of Covington Coal and lawyer for the Moran’s [sic] and
Covington.” [Filing No. 69, at ECF p. 2.] Leaberry’s answer states that he “denies that he is the
CFO or other officer of Covington.” [Filing No. 75, at ECF p. 2-3.] While Leaberry denies that
he was the CFO of Covington when he filed his answer, he did not deny that he was formerly the
CFO of Covington. Without such a denial, Leaberry effectively admits he was the CFO pursuant
to Rule 8(b)(6).
However, this is where the Court must split a hair. Leaberry’s larger rhetorical paragraph
to the first allegation of the amended complaint concludes by stating that the he “lacks
knowledge or information sufficient to form a belief as to the truth of all remaining allegations of
Paragraph 1.” [Filing No. 75, at ECF p. 3.] Thus, the Court must determine whether Leaberry’s
catch-all “lack of knowledge” statement applies to the portion of Summerville’s allegation that
Leaberry “was the CFO.”
There are exceptions for claiming “lack of knowledge” under Rule 8(b)(5), such as
matters “where the defendants could have informed themselves on the issues in question ‘with
the slightest effort.’” F.D.I.C. v. Coleman Law Firm, No. 11 CV 8823, 2012 WL 5429151, at *1
(N.D. Ill. Nov. 7, 2012) (citing Exch. Nat'l Bank of Chi. v. Brown, No. 84 C 10801, 1985 WL
2274, at *2 (N.D. Ill. Aug. 9 1985)). The present issue fits squarely in this exception. Leaberry
is certain to have first-hand knowledge about whether he was formerly the CFO of Covington
and with the slightest effort, he could have denied that he “was the CFO” of Covington. He did
not. He only denied that he “is the CFO.”
The hurdle for claiming “lack of knowledge” under Rule 8(b)(5) is “higher than the
absence of actual knowledge.” F.D.I.C., 2012 WL 5429151, at *2. For example, involvement in
the event at issue likely provides an individual with enough knowledge and information to form

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a belief. Id. So too here, Leaberry must have enough knowledge and information to at least
form a belief about whether he was formerly the CFO of Covington.1 Leaberry cannot lack
enough knowledge and information about himself in this scenario for Rule 8(b)(5) to apply.2
Thus, the Court will not apply “lack of knowledge,” and concludes that by only denying that he
“is the CFO,” Leaberry admitted that he “was the CFO.”
The Court therefore finds that it did not erroneously state, “Englemeier had had been
working with Leaberry, who is an attorney and was the CFO of Covington.” However, “at the
time of the loan” should be struck from this Court’s prior order because the timing of Leaberry’s
role as CFO is not established. [Filing No. 121, at ECF p. 2.] Whether Leaberry was previously
the CFO of Covington is not a disputed fact, but when he acted as the CFO is.3 Leaberry’s
motion to reconsider [Filing No. 123] is granted in part.
Date: March 7, 2016.
_______________________________
Tim A. Baker
United States Magistrate Judge
Southern District of Indiana
1

Summerville presents the Court with an email containing a statement by Englemeier that
Leaberry was the CFO of Covington during loan negotiations. [Filing No. 130.] Leaberry
presents the Court with an email containing a statement by Englemeier that Leaberry was never
the CFO of Covington. [Filing No. 133-1.] These statements are completely inconsistent, but
they do not constitute a denial by Leaberry that he “was the CFO of Covington at the time of the
loan.”
If Leaberry improperly brings Rule 8(b)(5) into play, “he might perhaps become vulnerable
under Rule 11(b) or even 28 U.S.C. § 1927.” F.D.I.C., 2012 WL 5429151, at *2.
2

The amended complaint alleges that “[o]n October 23, 2012 the CFO of Covington, Leaberry
sent an email to Summerville.” [Filing No. 69, at ECF p. 5.] Leaberry’s response that he
“denies that he is the Chief Financial Officer of Covington,” but “admits that he sent an email to
Mr. Summerville on October 23, 2012,” at least suggests that he might have been the CFO of
Covington at the time of the loan. [Filing No. 75, at ECF p. 9.] Nevertheless, it does not
establish that Leaberry was the CFO “at the time of the loan.”
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Distribution:
Copies to be distributed to
all counsel of record through
the Court’s electronic filing system.

PAUL MORAN
200 Upper Kanawha Valley Way
Chelyan, WV 25035
PETER K MORAN
200 Upper Kanawha Valley Way
Chelyan, WV 25035

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