Parkcrest Builders, LLC v. Housing Authority of New Orleans

Filing 407

ORDER denying 366 Motion for Sanctions. Signed by Magistrate Judge Karen Wells Roby. (Reference: All Cases)(cml)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
PARKCREST BUILDERS, LLC

CIVIL ACTION

VERSUS

NO:

HOUSING AUTHORITY OF NEW
ORLEANS (HANO)

SECTION: “J” (4)

15-01533 c/w
16-14118
16-15849

ORDER
Before the Court is Liberty Mutual Insurance Company’s Motion for Sanctions (R.
Doc. 366) for the Housing Authority of New Orleans’ alleged failure to comply with this Court’s
Order from June 1, 2017. Rec. Doc. 206.
I.

Background
A. Factual Summary
This claim involves the alleged breach of an 11 million dollar construction contract for the

contruction of the Florida Avenue: New Affordable Housing Unit (“the Project”). The Project
began in 2013, but due to multiple delays Parkcrest Builders (“Parkcrest”) was terminated as the
contractor on April 10, 2015. Rec. Doc. 21.
The dispute centers on whether the construction could not be completed due to the poor
performance of Parkcrest or inadequate design documents which caused delays outside of
Parkcrest’s control. As a result, Parkcrest filed this lawsuit contending that its termination was one
for convenience, not cause. Id.
The Housing Authority of New Orleans (“HANO”), the owner of the housing units
counterclaimed against Parkcrest and the surety, Liberty Mutual, also intervened in the claim. R.
Docs. 23, 31. HANO contends that Parkrest was obligated to deliver a total of 52 units within the
contracting time which was extended by a change order to 529 days or until September 14, 2014.

HANO also claims that none of the units have been accepted as complete. As a result HANO
seeks liquidated damages, claiming bad faith and compensatory damages. The matter has been
hotly contested, and the discovery aggressive, involving the production of electronic documents
which resulted in the subject motion being filed and the question of whether all of the documents
were produced in compliance with earlier orders. The discovery scenario follows below.
B. The Discovery Story
While the lawsuit was filed in May of 2015, discovery did not begin in earnest until October
2016. 1 During that time, the lawyers for the parties met and agreed to a rather unrealistic discovery
plan which consisted of completing written discovery by December 2016, and the first set of
written discovery was not propounded until October 2016. Rec. Doc. 91-2. They also
unrealistically agreed to the completion of fact depositions by Spring of 2017. Id.
On February 10, 2017, the parties agreed to another extension of time for HANO to respond
to the first set of discovery to March 6, 2017. 2 Despite this agreement, the first Motion to Compel
complete responses was filed on February 16, 2017, and regarded the inadequacy of HANO’s
responses to the First Set of Requests for Production of Documents. Rec. Doc. 92. The initial
Motion to Compel was denied largely due to the production of documents the night before the
hearing on the motion and the question of whether the production was sufficient. Rec. Doc. 107.
On or about March 13, 2017, Liberty propounded its Second Set of Requests for Production of
documents on HANO. This discovery sought the production of any documents that HANO relied
upon in responding to the Interrogatories, all correspondences related to the project,
1

It is as though HANO never got control of the discovery in this case.

2

The first set of interrogatories sought the identity of: (1) contracts; (2) description of work performed; (3)
change orders; and (4) communications with contractors and suppliers. Rec. Doc. 199-2, 10/7/16. On May 18, 2017,
HANO supplemented its answers to Liberty’s second set of interrogatories, asserted objections, and promised that the
information would be soon forthcoming.

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correspondence sent to or from Jennifer Adams, Kevin Oufnac, Guy Barcelona, Hollie DeHarde,
and Patrick Kennedy, documents reflecting inspections performed at the request of Perez APC,
HANO, New Orleans Public Works, and Liberty. Rec. Doc. 156-2.
Essentially, the requests sought everything having to do with the project whether
evidencing communications, decisions, or design issues. Id. Interesting to the Court is that
although it sought information generally, the way the requests were written the responses to some
degree would overlap with the request to produce everything. The Second Requests for Production
of documents were not materially different than the First Set of Request for Production of
Documents, as it too sought all documents concerning the project. 3
On April 25, 2017, Liberty filed a Motion to Compel HANO to respond to its Second Set
of Interrogatories and Requests for Production of Documents. However before the hearing, the
parties entered into an agreement wherein HANO would: (1) respond to the discovery on or before
May 10, 2017; (2) produce all documents from 2013 to the present in response to Liberty’s Second
Request for Production of Documents 4 before May 17, 2017; and (3) provide a privilege log
regarding those items it contends are subject to the attorney client privilege or work product
doctrine. Rec. Doc 169.

3

The First Set of Requests for Production of documents also sought the production of all documents regarding
the alleged defects, documents evidencing communications, interactions with government agencies, to documents or
payments made or outstanding on the project. It also sought the production of all documents or statements from
anyone who was interviewed in connection with the project, and the production of all documents related to the project.
Rec. Doc. 91-2, pp. 18-20.
4

The Second Requests for Production of Documents sought the production of all documents responsive to
the second set of Interrogatories, all correspondence related to the Project from 2012 through final completion of the
project. It also sought correspondence to Greg Fortner, Jennifer Adams, Kevin Oufnac, Guy Barcelona, Hollie
Deharde and Patrick Kennedy from 2012 to the end of the project, documents regarding the inspection, design
deficiency, water and sewer tie-ins at Alvar and Congress Street, the alleged failure to timely inspect, the decision to
terminate Parkcrest, Colmex work performed, liquidated damages, the delay in the project completion, and the status
of the project.

3

On April 26, 2017, by email, HANO’s counsel agreed that it would fully respond to
Liberty’s second set of Interrogatories on or before May 10, 2017 (providing all facts and the
documents that support its allegations that the Project was not substantially complete as of June
29, 2016). Rec. Doc. 199-4. HANO, in the general objections section of the pleading, noted its
request for an additional 30 days to respond to the second set of discovery. Rec. Doc. 199-6,
5/18/17.
After the agreement was entered into, Liberty filed a subsequent motion again seeking to
compel complete responses to the Second Set of Requests for Production of Documents. Rec. Doc.
199.

Liberty sought an order from the Court: (1) Limiting the responses to the pending

Interrogatories; (2) Deeming HANO’s objections to the Requests for Production of Documents
waived; (3) Compelling HANO to fully respond to the Discovery Requests; and (4) Compelling
HANO to produce the documents on its privilege log. Id.
Liberty continued to complain that HANO has not produced all the documents from 2013
to the present. During oral argument on the motion, HANO’s counsel, Jonathan Brehm, advised
the court that: (1) the documents it had not produced were primarily documents relating to emails
from HANO employee Jennifer Adams; and (2) that it would produce the documents by May 31,
2017, the actual date they were in court for oral argument. Despite his representations to the court,
HANO’s counsel did not complete the production on May 31, 2017. Instead, at 5:50 p.m. on the
day of the hearing, HANO’s lawyer, by email, indicated that its third-party vendor was still
working on Bates-stamping and “ocr”-ing the documents. Rec. Doc. 206. The Court extended the
production deadline until 5:00 p.m. on June 2, 2017. On June 1, 2017 at 12:22 p.m., Mr. Jonathan
Brehm sent a link to download the documents using Dropbox.

4

On July 31, 2017 at 6:58 p.m., Mr. Brehm sent another link to documents he identified as
HANO Production No. 7, which consist of updates to the HANO Project File for the subject
dispute. Rec. Doc. 366-4, Exhibit C. The next day on August 1, 2017 at 7:03 p.m., Brehm again
sent a link for the download of additional documents, which consisted of updates to documents
regarding the completion and corrective work, including the Project Manager’s emails. Brehm
indicated that the documents supplemented HANO’s responses for request for production of
documents evidencing Parkcrests defective work, HANO’s damages, and completion of Comex’s
scope of work including change orders.
On August 29, 2017, Liberty filed the subject motion contending that despite the Court’s
order for the parties to complete its production of documents by 5:00 p.m. on Friday June 2, 2017,
it failed to do so. Rec. Doc. 366-1. Liberty contends that while HANO had represented to it and
this Court on June 1st that its production was complete, HANO’s representation was false. R. Doc.
366-3. Liberty contends that based upon HANO’s completion certification of June 1, 2017, the
parties proceeded with taking various fact witness depositions in advance of the August 1, 2017
discovery deadline.
Liberty contends that the documents that were the subject of the last minute data dump
largely were in HANO’s possession for months, for which there is no justification for withholding
until after nearly all fact depositions had been taken. Rec. Doc. 366-1, p. 1. As a result, Liberty
now requests that the Court sanction HANO for its untimely production in violation of this court’s
order and bar HANO from using any of the documents produced either on July 31, 2017 or August
1, 2017.
HANO opposes the motion contending that it was not under an order of the Court to
complete is production of documents in this matter by June 2, 2017. Rec. Doc. 372. Instead, it

5

contends that it was under an order to complete its responses to the Second Set of Interrogatories
and Request for Production of Documents only, and that it complied with the court’s order. HANO
further points out that from April 10, 2017 to June 1, 2017, it had produced 44,000 pages 5 of
electronic documents, that it also had done so in compliance with the courts rolling production
instruction and pursuant to its obligation to supplement its responses to the First Request for
Production of Documents. HANO contends that any delay in production is the result of the review
process, preparing the documents for production by converting them to .tiff and having the optical
character recognition analysis performed.
HANO contends it was simply complying with its duty to supplement its discovery
response pursuant to Rule 26(e) and it did so regarding its productions No. 7 and 8 as soon as it
learned that its earlier responses were deficient, but that they were done in compliance with the
scheduling order. HANO strongly denies that its production of documents supplementing its
responses to the first set of discovery is in violation of any discover order issued in this case.
II.

Standard of Review
Federal Rule ("Rule") of Civil Procedure 26 requires a party to produce non-privileged

documents which are relevant to the subject matter involved in the pending action. That
requirement embraces documents and information that are reasonably calculated to lead to the
discovery of admissible evidence. Fed. R. Civ. P. 26(b)(1). This broad duty of disclosure extends
to all documents that fit the definition of relevance for the purposes of discovery-whether the
documents are good, bad, or indifferent. Danis v. USN Communications, Inc., No. 98-7482, 2000

5
The 44000 pages are derived from the following: Production made on April 10 and April 13, 2017, of
approximately 17000 documents. Production made on May 18, 2017, of 12,400 documents responsive to the Second
Set of Request for Production of Documents. The final production included the completions of its responses to the
Second Set of Request for Production, including the emails under the “expanded ESI Protocol” on June 1, 2017 of
another 15000 documents.

6

WL 1694325, at *1 (N.D. Ill., October 20, 2000). Self-reporting is, in fact, a central concept of the
discovery process. The duty of disclosure finds expression in the rules of discovery, and in this
Court's Rules of Professional conduct, which prohibit an attorney from suppressing any evidence
that he or his client has a legal obligation to reveal or produce.
Sanctions may be imposed on a party that, without substantial justification, fails to disclose
information required by Rule 26(a) or 26(e)(2). In re September 11th Liability Insurance, 243
F.R.D. 114, 125 (S.D.N.Y. 2007) (citing Fed. R. Civ. P. 37(c)(1)). A failure to disclose under Rule
37 includes not only spoliation of evidence, but also a party's untimely production of documents
and information required to be produced.
III.

Analysis
Liberty contends that HANO should be sanctioned for failing to abide by this Court’s June

2, 2017 deadline to complete discovery in accordance with “the deadline”. Therefore, Liberty
contends that the exclusion of HANO’s untimely productions is warranted because the late
production relates to the project, HANO’s damages, and the scope of Colmex’s work after
Liberty’s departure from the project. Liberty contends that it should have had these emails and
documents before taking the depositions of the people who generated them; such as Mr. Barcelona,
Ms. Adams and Ms. DeHarde.
Liberty contends that HANO’s eighth production consisted of internal emails in which its
employee Jennifer Adams contends that Parkcrest and Liberty had allowed a termite contract to
lapse and HANO would seek to recover costs to remediate the alleged termite problems at the
Project from Parkcrest and Liberty. Liberty contends that it should have had the benefit of this
email before the deposition.

7

HANO contends that sanctions are not warranted as it complied with the Court’s discovery
deadline of August 1, 2017. It further contends that the productions of July 31, 2017, and August
1, 2017, were supplemental productions it was obligated to produce once it determined that
additional documents were responsive to the First Set of Requests for Production of Documents.
HANO contends that notwithstanding its compliance with the court’s discovery order, its
obligation to supplement all of its responses remained. HANO contends that Liberty has been
aware that the damages in this case are ongoing because the Project is on-going as a result of the
poor work performed by Parkcrest. Rec. Doc. 372.
HANO further contends that Liberty never filed a motion to compel the documents
produced on July 31 and August 1, 2017. As a result, there was no court order that would form
the basis of a sanction order under Rule 39(b)(2)(A). HANO also contends that Liberty was not
deprived of questioning the witnesses it identified in its memorandum as evidenced by the fact that
the same documents were produced in HANO’s Production No. 5. As a result, Liberty had every
opportunity to ask Mr. Barcelona, and other HANO witnesses about the documents, two days to
depose Mr. Barcelona and Liberty already raised many of the issues.
The Federal Rules of Civil Procedure are clear as to the requirements for complying with
discovery requests and the serious consequences for failing to do so. The court has wide latitude
in determining the appropriate sanction for failure to comply with discovery. Indeed, when a
party's conduct is not effectively sanctionable under an existing rule or statute, a court may rely on
its inherent power to impose sanctions.
The court has the clear authority under Fed. R. Civ. P. 37(b) to sanction a party for failure
to obey an order that provides or permits discovery. If a party fails to obey an order to provide or
permit discovery, the court where the action is pending may issue "further just orders" including:

8

(i) directing that the matters embraced in the order or other designated facts be taken as
established for purposes of the action, as the prevailing party claims;
(ii) prohibiting the disobedient party from supporting or opposing designated claims or
defenses or from introducing designated matters in evidence;
(iii) striking pleadings in whole or in part;
(iv) staying further proceedings until the order is obeyed;
(v) dismissing the action or proceeding in whole or in part;
(vi) rendering a default judgment against the disobedient party; or
(vii) treating as contempt of court the failure to obey any order except an order to submit
to a physical or mental examination.6
The purpose of discovery sanctions are to secure compliance with the rules of discovery,
deter others from violating them, and punish those who do violate them. National Hockey League
v. Metropolitan Hockey Club, Inc., 427 U.S. 639, 642-43 (1976). Typically, Rule 37(b) sanctions
are not available until the court has issued a specific discovery order, orally or in writing,
instructing a party to submit to discovery so it is clear that the offending party has been alerted to
what is required and the potential seriousness of noncompliance. See Halas v. Consumer Servs.,
16 F.3d 161,164 (7th Cir. 1994); See e.g., Shepherd v. ABC, Inc., 62 F. 3d 1469, 1474 ( D.C. Cir.
1995). However, the court can sanction at any time based on the court's inherent authority to
sanction. Unigard Sec. Ins. Co. v. Lakewood Eng’g & Mfg., 982 F.2d 363,368 (9th Cir. 1992).
Although not all courts agree, the Fifth Circuit allows for discovery sanctions to be imposed even
when there is not a total failure to respond, but the response has been so evasive or misleading or
inadequate that it amounts to no response at all. See Coane v. Ferrara Pan Candy Co., 898 F.3d
1030, 1031 n.1 (5th Cir. 1990)
A. Discovery Order
The first issue for the court to decide is whether there is a discovery order that HANO
failed to comply with. The dispute centers on this Court’s order of June 2, 2017. Liberty contends
that the order required HANO to produce all documents from 2013 to the present that are

6

Fed.R.Civ.P.37(b)(A).

9

responsive to the 2nd Set of Requests for Production. HANO contends that it complied with the
Court’s order by producing the documents on the extended deadline of June 2, 2017 such that there
is no order which was violated and that Liberty did not file a motion compelling the July 31 and
August 1, 2017, productions and therefore an award of sanctions is not appropriate.
The second set of requests for production of documents sought the production of: (1) all
documents responsive to the Second set of Interrogatories; (2) all correspondence related to the
project from 2012 through final completion; (3) correspondence sent to or from Frontier, Adams,
Oufnac, Barcelona, DeHarde, and Kennedy; (4) all inspections; (5) inspections by public works,
the architect, and Liberty; (6) correspondence regarding the water and sewer tie-ins, Entergy’s
powerlines, redesign of the power infrastructure, power line, poles, and electrical meters; (7) the
firewall partition design; (8) the decision to terminate Parkcrest from the project; (9) the
performance of Colmex, the defective work of Colmex, and change in the scope of work; (10) Karl
Moser’s documents; and (11) liquidated damages including the inspections performed to make the
determination. Rec. Doc. 169.
Due to the difficulty HANO experienced in complying with the discovery, the parties
entered into an agreement which provided that HANO would produce all documents from 2013 to
the present that are responsive to Liberty’s Second Request for Production of documents by May
17, 2017. Id. After HANO missed the agreed to deadline again, the Court extended the deadline
to complete the production in connection with its agreement to Friday, June 2, 2017 at 5:00 p.m.
Rec. Doc. 206. The extension that was issued regarded all of the information sought by the 2nd
Request for Production, to which HANO agreed, and the court adopted the agreement as its order.
The order therefore having adopted the agreement of counsel included the term to produce

10

documents from 2013 to the present that are responsive to the 2nd Request for Production of
Documents. Contrary to the position of HANO, there was an order for it to comply with.
B. The July 31 and August 1, 2017 Productions
According to Liberty it was precluded from the use of the documents produced in
Production 7 and 8 because they took the depositions of the critical witnesses in the interim,
without specifying the particular documents whose use was critical to the development of the case
or the issues involved in the case, Liberty seeks a blanket exclusion of all documents produced in
Productions 7 and 8 at the trial. Liberty does direct the Court to a sampling of the documents that
reference DeHarde and Barcelona regarding the project. Rec. Doc. 366-1, p. 4, Exhibit E, F.
Liberty also points to the fact that the documents produced were several months old and should
have been produced by the June deadline.
HANO contends that Production 7 and 8 was its attempt at honoring its obligation to
supplement all responses which were not otherwise made known pursuant to Rule 26(c). HANO
contends that it met its obligation to supplement and that it did so by the Court’s discovery deadline
of August 1, 2017. HANO also advances the argument that it became aware that additional
documents should be produced during the DeHarde deposition when counsel for Liberty called for
production of the actual pay application and that it thereafter produced the documents on the
subject dates. Rec. Doc. 372. HANO’s suggestion that this triggered its obligation to supplement
however, is not believable given what the number and type of documents that were produced and
the inconsistency of HANO’s counsel’s representation during the hearing on this matter.
Interestingly, the documents that HANO produced according to its excel spread summary
sheet appear to overlap with what HANO agreed to produce in its agreement with Liberty that was
converted to the court’s order. The Court agrees, however, with HANO that the documents it

11

produced from mid-June 2017, while technically responsive to the requests, could not have been
produced by June 2, 2017, thereby partially requiring a supplementation.
The real issue, however, lies with the documents produced from mid- March to June 2,
2017, which are clearly documents that would fall within the confines of the order. HANO’s
counsel seems to advance the argument that they were understaffed because he was incredibly
busy taking or defending depositions, filing and opposing motions, and reviewing documents for
relevancy and privilege. Rec. Doc. 372. However, counsel is responsible for properly staffing
the case to meet the demands of the litigation. As a result, the Court finds that the documents
produced from mid-March to May 31, 2017 violate the Court’s order of June 2, 2017.

The

remaining documents from June 1, 2017 through mid-June do not violate the Court’s order.
C. Duplicate Documents
Liberty seeks the exclusion of the documents produced on July 31 and August 1, 2017.
Rec. Doc. 366. To some degree after HANO responded to its charge by pointing out that some
of the documents were duplicates produced during an earlier production, Liberty has since
modified its position and now states that it seeks to preclude only those Bates-stamped documents
from HANO-086794 to HANO-090925, or 4,131 pages, which had not been previously produced.
Rec Doc. 380. The Court notes that Liberty does not identify either the subject matter of the
documents that were duplicates or cull out the particular documents from the late production that
were actually duplicates.
HANO contends that the offending documents that were identified by Liberty as including
Barcelona and DeHarde are actually documents that were produced during an earlier production.
HANO contends that the “TAB REPORTS are another example of documents that were produced
in the July 31 and August 1 2017 production and also the earlier Production 5. See HANO-061333

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thru HANO-061352. HANO therefore contends that Liberty had every opportunity to question
either Barcelona or DeHarde about the warranty issue regarding the water heater. Rec. Docs. 372;
391-2, pp. 1-12.
A court may, in its discretion, preclude evidence if: (1) the offending parties were not
substantially justified in failing to disclose information required by Fed. R. Civ. P. 26(a) or Fed.
R. Civ. P. 26(e); and (2) the failure to disclose was not harmless. Hipsaver Co. v. J.T. Posey Co.,
497 F. Supp. 2d 96 (D. Mass. May 15, 2007). In that analysis, courts consider a multiplicity of
pertinent factors, including the history of the litigation, the proponent's need for the challenged
evidence, the justification, if any, for the late disclosure, and the opponent's ability to overcome
its adverse effects. Surprise and prejudice are important integers in this calculation. Gagnon v.
Teledyne Princeton, Inc. 437 F. 3d 188, 197 (1st Cir. 2006). Because the Rule contemplates strict
adherence to discovery rules and harsh sanctions for breaches, the required sanction in the ordinary
case is mandatory preclusion. Id.
A party that without substantial justification fails to disclose information required by Rule
26(a) or Rule 26(e)(1), or to amend a prior response to discovery as required by Rule 26(e)(2), is
not, unless such failure is harmless, permitted to use as evidence at a trial, at a hearing, or on a
motion any witness or information not so disclosed. Id.; Hipsaver, 497 F. Supp. 2d 96.
As is common in cases involving electronic discovery, some of the documents in the late
production were duplicate documents that were contained in earlier productions. The Court
received per its supplemental request from HANO a listing of documents that were contained in
both Production 7 and 8. This report identifies 581 duplicate documents produced either in
Production 7 or 8. Rec. Doc. 383-2. The evidence shows that these duplicate documents were
subpoenaed by Liberty from Colmex, Perez, or were produced by HANO in earlier productions.

13

Having determined that 581 of the 4,131 pages were duplicates for which Liberty cannot claim
surprise or prejudice, the production of these documents are not precluded as evidence in this case.
The evidence also indicates that Liberty was aware of the water heater warranty issue which could
have been addressed during the depositions. Liberty’s failure to question the witnesses regarding
these documents would at best be considered strategic but certainly do not warrant the imposition
of sanctions and the late production is harmless.
D. Impact of Late Production
Liberty next contends that there were at least 476 pages of documents that would be
relevant to the depositions of HANO representatives and design team including the depositions of
DeHarde, Barcelona, Adams, and Perez APC’s 30(b)(6) deposition as well as Integrated Logistical
Support Incorporated’s deposition. Liberty contends that the documents would also have been
relevant to the Grass Maintenance contract, acceptance of the streets and public right of ways
project, and the substantial completion for the project. Liberty also contends that July 31, 2017
and August 1, 2017 productions also show that after March 25, 2017, Asset Management took
over the maintenance of the Project units and that Merrill and Scott began to make service and
maintenance work requests to Colmex in response to tenant-raised issues in their living units.
Liberty, in its supplemental memorandum, seems to have shifted the argument from a
complete exclusion to now a partial exclusion. While it originally sought the exclusion of all 4,131
pages, the argument has changed to suggest that at least 476 documents would have been relevant
to the depositions, and now contends that only 188 documents from Production No. 7 actually
ended up on HANO’s trial exhibit list and 2 documents from Production No. 8. Rec. Doc. 382.
Liberty contends that the exclusion of the specific documents that ended up on HANO’s exhibit
list would have a minimal impact on the trial, but that the court should exclude them. Liberty

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acknowledges that the 2 documents from Production 8 involve the HVAC system and would not
have a substantial impact. It also appears that Liberty suggests that documents produced during
July 31 and August 1 concerning warranty work should be excluded because they are not relevant
to the claims at issue in this matter.
Liberty contends that reopening discovery would not cure the problem that was created by
the late production and would be cost-prohibitive. Liberty contends that the documents concerning
Tropical A-C and Heat, LLC and Chuck Barbot were not produced until Production Nos. 7-8 and
should be excluded. Rec. Doc. 382, p. 7. Liberty also identifies a list of depositions and work that
would have to be done to cure any problems caused by the late production.
HANO, at the direction, of the Court submitted a supplemental memorandum
acknowledging that its counsel’s representation during the hearing was in error. HANO’s counsel
now states that the issue of termite damage did not arise until late May 2017, and that the extent
of the damage was not identified until August 2017, rendering it impossible for any witness at that
time to provide full testimony on the issue. Rec. Doc. 391, p. 3. HANO, therefore, indicated that
Adams would not have had knowledge of the extent of the termite damage at the time of the
deposition or of Parkcrests failure to maintain the termite contract. Id.
HANO contends that Liberty had plenty of opportunity to ask HANO’s witnesses about
latent defects at the Florida Project but failed to do so. HANO contends that Liberty had received
documents two months earlier regarding latent defects. Rec. Doc. 391, p. 5. HANO, during its
October 9, 2017 filing, indicated that it still intended to produce additional documents evidencing
ongoing damages relating to increased costs of construction. HANO proposed that DeHarde could
be produced for a deposition of an additional three hours, and that she could be questioned about
new issues which were not previously disclosed and which appeared for the first time during the

15

late production. Finally, HANO contends that the documents produced were timely as it was
produced by the discovery deadline.
In considering the remaining issue of impact of the late production, the Court is of the
opinion that both counsel have missed the forest for the trees. The real issue from the Court’s
perspective is whether the documents produced on July 31 and August 1 contain subject matter
that Liberty was not aware that would impact their ability to prepare their case. The argument has
devolved to only a numerical calculation regarding the timing of the production. Despite the
multiple replies and sur-replies, Liberty has failed to isolate which issues are contained in the late
production which it was unaware of and was not able to question witnesses about.
It is Liberty’s burden to do so and it has failed. Despite HANO’s noncompliance with the
order, the mover was required to show how it is prejudiced by the late production. The only subject
matter which seems to be truly late is regarding the termite contract and its lapse. It still is unclear,
however, how many pages of the documents Liberty is really seeking to exclude. To exclude 4,131
documents, or 497 documents, just because they were late without any proof as to prejudice would
be inappropriate and not consistent with the case law.
As further example of the inadequacy of the motion, while Liberty contends that 497 of the
documents would have been relevant to the witnesses, it fails to say how the inability to question
the witness about the particular subject matter of the documents results in prejudice. Oklahoma v.
Tyson Foods, Inc. 262 F. 2d 617 (Okla. 2009). As a result, the court finds that the late production
was harmless because while Liberty sounds the alarm and uses the terminology that they are
prejudiced their motion and multiple filings fail to show how. If Liberty has not shifted its
argument and still seeks an exclusion of the remaining documents, whether that number is 3,500, 7

7

The number is determined by subtracting the 581 duplicate documents from the 4,131 documents
produced in the late production.

16

497, 8 or 188, 9 the Court finds that this request is overreaching in light of the absence of evidence
of harm.
Additionally, as to the documents regarding the warranty issue which may be deemed
irrelevant, those documents are not appropriately the subject of this motion. Instead, it is for the
District Judge who will try this case to make a determination as to the relevancy of any warranty
documents. While there is no doubt that HANO struggled to keep up with its discovery obligations
and violated this court’s order, the court cannot say that sanctions are warranted as any harm to
Liberty is de minimis. This conclusion is based upon Liberty’s inability to provide proof of
prejudice by drawing the court’s attention to the particular subject matter about which they were
blindsided. It almost seems that at the time of the filing of this motion Liberty had not reviewed
the documents and compared them to the other productions to determine if there was anything new
rather than duplicative.
IV.

Conclusion
IT IS ORDERED that Intervenor’s Liberty Mutual Insurance Company’s Motion for

Sanction (R. Doc. 366) is DENIED.

New Orleans, Louisiana, this 14th day of December 2017.

KAREN WELLS ROBY
CHIEF UNITED STATES MAGISTRATE JUDGE

8

The documents that Liberty contends it could have used to question witnesses, but due to the late
production could not.
9
The actual documents that were produced in the late production which ended up on the exhibit list.

17