Petro et al v. Jones et al

Filing 192

MEMORANDUM OPINION & ORDER: Court being sufficiently advised, it is HEREBY ORDERED that the Petros' Motion for Sanctions [R. 144 is DENIED. Signed by Judge Gregory F. Van Tatenhove on 3/12/2014.(MRS)cc: COR

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
SOUTHERN DIVISION
LONDON
MICHAEL PETRO, et al,

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Plaintiffs,
v.
BENJAMIN JONES, et al.,
Defendants.

Civil No. 11-151-GFVT

MEMORANDUM OPINION
&
ORDER

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This case arises out of an automobile accident involving the Petro family in Wayne
County, Kentucky. [R. 134 at 2.] After the accident, the Petros filed this action against
Benjamin Jones, Auto-Owners Insurance Company, Erie Insurance Exchange and Celina
Insurance Company. Before the Court is the Petros’ motion for sanctions filed against AutoOwners and Erie. [R. 144.] On March 5, 2014, the Court held a hearing and heard arguments on
the motion for sanctions. [R. 190.] All claims have been dismissed as to Erie, since the filing of
this motion, so claims against Erie are moot. [R. 162.] Consequently, the Court’s discussion
will be appropriately limited to Auto-Owners.
I
The Petros served Requests for Admissions on Auto-Owners on October 25, 2011. [R.
144 at 3.] Auto-Owners answered on November 28, and then supplemented their responses on
January 26, 2012. [Id.] Three admissions are specifically at issue. The requests, responses and
supplemental responses are below:
1.

The Accident occurred wherein the vehicle operated by Jones pulled into the path
of Plaintiffs vehicle.

RESPONSE: Auto-Owners denies that Jones pulled into the path of Plaintiffs
vehicle in that none of the Plaintiffs were operating or occupying a vehicle owned
by any of the Plaintiffs. Auto-Owners further states that it does not have
information sufficient to admit or deny the remainder of Plaintiffs' Request in that
discovery in this matter is in its infancy, it has made a reasonable inquiry in order
to respond to this request, and the information it knows or that can be readily
obtained is insufficient to enable Auto-Owners to admit or deny Plaintiffs' request
at this time.
SUPPLEMENTAL RESPONSE: Auto-Owners objects to this request as
premature since discovery has not been completed concerning the issues of fact of
this case, specifically with regard to liability, pending resolution of the insurance
coverage issues. Without waiving this objection, Auto-Owners states that
according to the Uniform Traffic Collision Report, Jones' vehicle entered the
lanes of travel in which Plaintiffs were traveling. Auto-Owners reserves the right
to supplement this response as discovery progresses.
2.

Jones is solely responsible for causing the Accident.
RESPONSE: Objection insofar as this Request is overly broad and seeks a legal
conclusion. Without waiving this objection, Auto-Owners states that it does not
have information sufficient to admit or deny Plaintiffs' Request in that discovery
in this matter is in its infancy, it has made a reasonable inquiry in order to respond
to this request, and the information it knows or that can be readily obtained is
insufficient to enable Auto-Owners to admit or deny Plaintiffs' request at this
time.
SUPPLEMENTAL RESPONSE: Auto-Owners objects to this request as
premature since discovery has not been completed concerning the issues of fact of
this case, specifically with regard to liability, pending resolution of the insurance
coverage issues. Auto-Owners further objects in that Plaintiffs' seek a legal
conclusion and admission as to comparative fault for the accident. Without
waiving this objection, Auto-Owners states that according to the discovery
responses of Michael, Brandon, and Teena Petro, one of more of the Plaintiffs
may have comparative fault for the accident. Auto-Owners reserves the right to
supplement this response as discovery progresses.

3.

Auto-Owners is not aware of any information that the actions of any Plaintiff
caused or contributed to causing the Accident.
RESPONSE: Auto-Owners states that it does not have information sufficient to
admit or deny Plaintiffs' Request in that discovery in this matter is in its infancy,
it has made a reasonable inquiry in order to respond to this request, and the

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information it knows or that can be readily obtained is insufficient to enable AutoOwners to admit or deny Plaintiffs' request at this time.
SUPPLEMENTAL RESPONSE: Auto-Owners objects to this request as
premature since discovery has not been completed concerning the issues of fact of
this case, specifically with regard to liability, pending resolution of the insurance
coverage issues. Auto-Owners further objects in that Plaintiffs' seek a legal
conclusion and admission as to comparative fault for the accident. Without
waiving this objection, Auto-Owners states that according to the discovery
responses of Michael, Brandon, and Teena Petro, Michael and Brandon saw the
Jones vehicle prior to the collision. As such, the evidence in this case may show
that Brandon Petro has comparative fault for the accident. Auto-Owners reserves
the right to supplement this response as discovery progresses.
(R. 144 at 4-5; R. 146 at 2-3.) As a result of Auto-Owners’ “denials and purported inability to
admit or deny the Requests,” the Petros complain that they had to take two depositions and to
interview and obtain affidavits from five witnesses. [R. 144 at 6.] On May 4, 2012, the Petros
interviewed Benjamin Jones, the driver, and Gracie Sumner, who was a passenger in the vehicle
and the girlfriend of Jones. [R. 144 at 7.] On May 23, Defense Counsel deposed Plaintiffs
Michael, Teena, Brandon and Kimberly Petro. [R. 144 at 7.] On November 13, the Petros filed
their motion for partial summary judgment. [R. 120.] Attached to that motion were the
affidavits of five witnesses. [R. 144 at 7; R. 120, exhibits.] Auto-Owners chose to “not object to
the submission of Defendant Jones’s alleged liability to this Court for the purpose of either
determining fault or determining the need for a jury trial on the issue of Jones’ liability and
comparative fault.” [R. 124 at 1.] Notably, however, Jones did object, arguing against the entry
of summary judgment. [R. 126.] On May 1, 2013, the Court granted the motion for partial
summary judgment, finding that Jones was liable for the accident. [R. 141.] The Petros further
complain that, despite the testimony and the time that has passed since the Requests were issued,
Auto-Owners has failed to supplement their admissions. [R. 144 at 7.]

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The Petros filed the instant motion for sanctions on July 9, alleging that Auto-Owners
refusal to initially admit, and subsequently supplement, their responses to Requests for
Admissions has cost them $23,478.00, which they now seek as sanctions. [R. 144-1 at 5.]
II
A
Federal Rule of Civil Procedure 36 provides that “[a] party may serve on any other party
a written request to admit, for purposes of the pending action only, the truth of any matters
within the scope of Rule 26(b)(1) relating to: (A) facts, the application of law to fact, or opinions
about either.” Fed. R. Civ. P. 36. The purpose of the rule “is to require admission of matters
which ought to be admitted, or which will not be disputed at the trial, so that the time, trouble
and expense required to prove them may be avoided.” Metro. Life Ins. Co. v. Carr, 169 F. Supp.
377, 378 (D. Md. 1959); See also United States v. Smith, 42 F.R.D. 338, 339 (W.D. Mich. 1967)
(“The spirit and purpose of the Rule is that all undisputed contentions are to be admitted to limit
the issues before reaching the trial stage.”); Moosman v. Joseph P. Blitz, Inc., 358 F.2d 686, 688
(2d Cir. 1966) (“the purpose of Rule 36 is to expedite trial by removing uncontested issues”); T.
Rowe Price Small-Cap Fund, Inc. v. Oppenheimer & Co., Inc., 174 F.R.D. 38, 42 (S.D.N.Y.
1997) (“The purpose of the rule is to reduce the costs of litigation by eliminating the necessity of
proving facts that are not in substantial dispute, to narrow the scope of disputed issues, and to
facilitate the presentation of cases to the trier of fact.” (citing Donovan v. Carls Drug Co., Inc.,
703 F.2d 650, 652 (2d Cir.1983) (Rule 36 admissions may narrow issues and speed the
resolution of claims)) (additional citations omitted)).
An “answering party may assert lack of knowledge or information as a reason for failing
to admit or deny” but “only if the party states that it has made reasonable inquiry and that the

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information it knows or can readily obtain is insufficient to enable it to admit or deny.” Fed. R.
Civ. P. 36 (emphasis added). “What constitutes ‘reasonable inquiry’ and what material is
‘readily obtainable’ is a relative matter that depends upon the facts of each case.” T. Rowe Price,
174 F.R.D. at 43. The “rule requires only that the answering party make reasonable inquiry and
secure such knowledge and information as are readily obtainable by him.” Fed. R. Civ. P. 36,
Advisory Committee Notes to 1970 Amendment. A reasonable inquiry is an inquiry “limited to
persons and documents within the responding party's control (e.g., its employees, partners,
corporate affiliates, etc.).” U.S. ex rel. Englund v. Los Angeles Cnty., 235 F.R.D. 675, 685 (E.D.
Cal. 2006). Such an inquiry, “does not require the responding party to interview or subpoena
records from independent third parties in order to admit or deny a Request for admission.” U.S.
ex rel. Englund, 235 F.R.D., at 685 (citing T. Rowe Price, 174 F.R.D. at 43 (additional citations
omitted); But see Henry v. Champlain Enterprises, Inc., 212 F.R.D. 73, 78 (N.D.N.Y. 2003)
(“The inquiry may require venturing beyond the parties to the litigation and include, under
certain limited circumstances, non-parties, but surely not strangers.”))
When a party does not comply with the dictates of Rule 36 then Federal Rule 37(c)(2),
provides for sanctions:
If a party fails to admit what is requested under Rule 36 and if the requesting
party later proves … the matter true, the requesting party may move that the party
who failed to admit pay the reasonable expenses, including attorney's fees,
incurred in making that proof. The court must so order unless: (A) the request
was held objectionable under Rule 36(a); (B) the admission sought was of no
substantial importance; (C) the party failing to admit had a reasonable ground to
believe that it might prevail on the matter; or (D) there was other good reason for
the failure to admit.
Fed. R. Civ. P. 37. Of the four exceptions, Auto-Owners only argues subcategory (c), that the
admission was of no substantial importance. [R. 146 at 5-8.] “An issue is of substantial

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importance when it is material to the disposition of the case.” S.E.C. v. Happ, 392 F.3d 12, 34
(1st Cir. 2004) (citing Wash. State Dep't of Transp. v. Wash. Natural Gas Co., Pacificorp, 59
F.3d 793, 806 (9th Cir. 1995)).
B
Before addressing the substance of the motions, the Court feels compelled to address the
timing of this motion because there is some authority that a motion for sanctions for failure to
properly admit, like the one before this Court, may not be made before the completion of trial.
To explain this, a brief explanation of the five types of responses that a party can make to a
request for admissions is necessary. A party may respond to a request for admission with:
(1) an unqualified admission; (2) an unqualified denial; (3) a statement that the
respondent has conducted a reasonable investigation into the substance of the request but
that the information known or readily available to him or her is nonetheless insufficient to
enable him or her to admit or deny the request; (4) a qualified admission which explains
the need for and substance of the qualification or explanation; and (5) an objection to the
request.
Moore v. Rees, 06 CV 22 KKC, 2007 WL 1035013 (E.D. Ky. Mar. 30, 2007). The responses in
this case fall under either the third or fifth types of responses. Normally, “the appropriateness of
the second and third type of response may only be assessed through a post-trial motion for
expenses under Rule 37(c)(2).” Moore, 2007 WL 1035013 (E.D. Ky. Mar. 30, 2007) (emphasis
added) (citing 7-37 Moore's Federal Practice Civil § 37.70 (2006); United States v. Watchmakers
of Switzerland Info. Center, Inc., 25 F.R.D. 197, 199 (S.D.N.Y.1959)); see also Fed. R. Civ. P.
36, Advisory Committee Notes to 1970 Amendment (“The sanction for failure of a party to
inform himself [of information readily obtainable] before he answers [the admission] lies in the
award of costs after trial, as provided in Rule 37(c).” (emphasis added)).

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Normally a trial is required to resolve the substantive issues underlying the Requests for
Admissions. This case is slightly different, however, because the Court resolved the
fundamental issue of Jones’ liability through its Memorandum Opinion and Order, dated May 1,
2013, obviating a need for trial on these matters. [R. 141.] Furthermore, the Court suspects that
the rules anticipate that one of the most substantial costs which might be compensated for in such
a sanctions motion, is that of going to trial. Nevertheless, because the Court has definitively
resolved the issue of liability, this issue is now ripe for the Court’s consideration.
Conceptually, the Petros advance two arguments. First, they suggest that Auto-Owners’
failed to undertake a reasonable inquiry¸ thereby requiring them to propound additional,
expensive discovery. Second, they complain that Auto-Owners refused to supplement their
admissions following the receipt of the aforementioned evidence. The Court considers these
arguments in turn.
1
Auto-Owners refused to admit to any of three contested admissions, claiming they had
undertaken a “reasonable inquiry” and could not admit or deny. The Petros complain that AutoOwners “most egregiously… misrepresented to the Court and counsel that they undertook
‘reasonable inquiry’ … when they did not.” [R. 144 at 9.] They lament that, “at no point…did
Auto-Owners…contact any of the witnesses to the collision, nor did they contact Officer John
Hurd, the investigation officer assigned to the accident.” [Id.]
Fundamentally, the Court disagrees with the Petros’ contention that Rule 36 requires
defendants to collect information from third parties, outside their immediate control, for the
explicit purpose of responding to requests for admissions. As provided in the standard, supra, a
reasonable inquiry is limited to an inquiry of “persons and documents within the responding

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party's control (e.g., its employees, partners, corporate affiliates, etc.).” U.S. ex rel. Englund,
235 F.R.D. at 685.
The Petros suggest that Auto-Owners had an obligation to interview witnesses, the officer
that investigated the incident and both the driver and passenger in the vehicle. [R. 144 at 9.]
They argue that Auto-Owners’ non-investigation is in violation of Indiana Law. [R. 149 at 6.]
This argument, however, inappropriately conflates violations of Indiana law and the discovery
rules. While Auto-Owners might ultimately be found to have violated laws requiring good faith
or fair settlement practices, Federal Rule 36 does not place this type of burden on defendants.
The reasonable inquiry standard does not require that defendants perform discovery on a
plaintiff’s behalf.
Also, the Court cannot overlook the fact that Auto-Owners did provide responses, which
included objections that the requests were premature and sought legal conclusions. AutoOwners provided short responses, always limited with the caveat that they were not waiving their
objections. If the Petros thought these answers were insufficient then the Petros could have
petitioned the Court to review their sufficiency under Fed. R. Civ. P. 36(a)(6).1 If the Petros
suggestions about the importance of these requests for admissions are true, this simple step could
have saved them much time and money.
2
Plaintiffs further complain that Auto-Owners did not supplement their admissions despite
overwhelming evidence of liability. In support of this argument, the Petros summarize the
“The requesting party may move to determine the sufficiency of an answer or objection. Unless the
court finds an objection justified, it must order that an answer be served. On finding that an answer does
not comply with this rule, the court may order either that the matter is admitted or that an amended
answer be served.” Fed. R. Civ. P. 36(a)(6).
1

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deposition and affidavit testimony that was collected, discussed supra I, and then provide an
incomplete citation to Federal Rule of Civil Procedure 26(e)(1). [R. 144 at 8 (citing
Fed.R.Civ.P. 26(e)(1), “A party who has…responded to a … request for admission…must
supplement or correct its… response.”)] This partial citation is misleading because Rule 26(e)
provides an important caveat to the Petros suggestion that there is a universal duty to supplement
admissions. Federal Rule of Civil Procedure 26 (e) provides:
A party who has made a disclosure under Rule 26(a)--or who has responded to an
interrogatory, request for production, or request for admission--must supplement or
correct its disclosure or response: (A) in a timely manner if the party learns that in some
material respect the disclosure or response is incomplete or incorrect, and if the
additional or corrective information has not otherwise been made known to the
other parties during the discovery process or in writing; or (B) as ordered by the court.
Fed. R. Civ. P. 26 (emphasis added). Auto-Owners argues that the evidence the Petros cite falls
clearly into this excepted category of evidence as the evidence was “known to the other parties.”
The Petros make an interesting point, however, that the information they were seeking from
Auto-Owners was not evidence of facts in the record, but “Auto-Owners’ determination of
Jones’ liability for the accident, and Auto-Owners’ lack of evidence of comparative negligence
by Brandon Petro.” [R. 149.] These concessions were not made to the Petros. The Court
questions, however, whether these requests were properly directed to Auto-Owners.
3
The Court’s decision not to impose sanctions is additionally informed by other
considerations. First, the Court questions whether the Petros’ “expensive and time-consuming
discovery” is fairly attributable to “Defendants’ continued denials and purported inability to
admit or deny the Requests.” [R. 144 at 6.] Rule 37(c)(2) provides that the Court may sanction
for “reasonable expenses, including attorney’s fees, incurred in making that proof.” Fed. R. Civ.

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P. 37(c). The rule provides an exception, however, where the responses to the requests for
admissions were of no substantial importance. Auto-Owners points out, and the Court agrees,
that the Petros would have likely conducted the exact same discovery, notwithstanding AutoOwners’ response, to prepare the motion for summary judgment against Jones. Auto-Owners
argues there was no nexus between their failure to admit and the costs incurred.2 [R. 146 at 8.]
If anything, the Petros were less impeded in arguing the motion for summary judgment because
of Auto-Owners lack of opposition to the Court determining liability at that stage. While this
issue of what costs are fairly attributable has no impact on Auto-Owners’ responsibility to
comply with the civil rules, it does weigh on the Court’s decision that sanctions are not
appropriate. Second, the Court also considers that the relevant rules anticipate parties normally
seek sanctions following a trial. As the Court explained, the issues of liability have been
resolved so the Court feels comfortable resolving the issue at this juncture. Nevertheless, the
advisory committee’s wording and relevant case law seems to recognize that sanctions for
refusing to admit are most often available to compensate for the expensive cost of going to trial.
No such costs were borne here and the Court has been made aware of no other case where a

2

In their response, Auto-Owners provides the following citation:
In determining an award pursuant to Rule 37(c) (2) the court looks for “a sufficient causal nexus
between the expenses claimed, and the failure to admit. In other words, the court may ask, “if the
party to whom the requests were sent had admitted the matters that it should have admitted,
which facts would the propounding party not have to prove?” The reasonable expenses incurred
in proving those facts are recoverable. If a party's failure to admit did not cause the propounding
party to incur additional expenses ..., no award would be justified.”

Cook v. IPC Int'l Corp., 09-CV-275-JPG, 2012 WL 5354541 (S.D. Ill. Oct. 29, 2012) (quoting Hicklin
Eng'g, L.C. v. Bartell, 2005 WL 3805914, at *1 (E.D. Wis. Mar.31, 2005) (quoting 3 James Wm. Moore
et al., Moore's Federal Practice § 13.31 (3d ed. 2004 supp.)).

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Court has awarded similar sanctions after the entry of a summary judgment order. Third, the
Petros could have petitioned the Court to review the admissions’ sufficiency under Fed. R. Civ.
P. 36(a)(6) and, if the court found the responses insufficient, order a more complete response.
Finally, the Court notes the Petros have also alleged Auto-Owners acted in bad faith for not
admitting Jones was solely at fault for the accident and not engaging in good faith settlement
negotiations. It is likely that many of the arguments made in the motions before the Court will
be addressed when those bad faith claims are adjudicated. Today’s holding, however, is limited
to finding that Auto-Owners does not owe sanctions for non-compliance with the Federal Rules
of Civil Procedure.
III
Accordingly, and the Court being sufficiently advised, it is HEREBY ORDERED that
the Petros’ Motion for Sanctions [R. 144] is DENIED.

This 12th day of March, 2014.

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