Meredith v. International Marine Underwriter's

Filing 63

MEMORANDUM OPINION. Signed by Judge George Levi Russell, III on 7/20/2012. (aos, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND

CLIFFORD E. MEREDITH,

:

Plaintiff,

:

v.

:

INTERNATIONAL MARINE
UNDERWRITERS,

:

Civil Action No. GLR-10-837

:
Defendant.
:

MEMORANDUM OPINION
THIS MATTER is before the Court on Defendant International
Marine Underwriters’ (“IMU”) Renewed Motion to Strike Plaintiff
Clifford

Meredith’s

(“Renewed

Motion

Judgment.

(ECF Nos. 54-55).

to

Expert
Strike”)

Designation

of

and

Motion

Renewed

Charles
for

Smith
Summary

This case involves IMU’s denial of

coverage, under an insurance policy, for damage sustained to Mr.
Meredith’s boat as a result of its sinking.

The issues before

the Court are (1) whether the Court should grant IMU’s Renewed
Motion to Strike where Mr. Meredith failed to disclose a written
report

as

mandated

by

Federal

Rule

of

Civil

Procedure

26(a)(2)(B) and (C); and (2) whether the Court should grant
IMU’s Renewed Motion for Summary Judgment where Mr. Meredith
cannot

establish

a

genuine

issue

of

material

fact

as

to

causation or damages.

The issues have been fully briefed and no

hearing is necessary.

See Local Rule 105.6 (D.Md. 2011).

The Court concludes that Mr. Meredith’s repeated failure to
provide adequate Rule 26(a)(2)(B) and (C) disclosures, pursuant
to this Court’s Order, warrants that his expert designation of
Charles Smith as to damages be stricken.

Secondly, the Court

denies IMU’s Renewed Motion for Summary Judgment because (1) a
genuine issue of material fact exists as to causation and (2)
under Maryland law, damages is not an essential element of a
cause of action for breach of contract.
I.

BACKGROUND

In April 2009, Mr. Meredith purchased an insurance policy
(“the Policy”) from IMU, through the Avon Dixon Agency, LLC
(“Avon Dixon”), to insure Mr. Meredith’s vessel, “the Eleanor.”
(Compl.

¶

2,

ECF

No.

2).

The

Policy

contained

a

“Perils

Clause,” which insured the Eleanor for physical damage, but a
separate “Exclusion Clause” excluded from coverage any damage
resulting from Mr. Meredith’s failure to maintain the Eleanor in
a seaworthy condition. (Id. ¶ 4); (Def.’s Mem. Law Supp. Summ.
J. 2, ECF No. 54).
In October 2009, the Eleanor was found partially submerged
while docked at a private residence (“the Accident”).
Mem. Law Supp. Summ. J. 2).
submitted

a

claim

under

the

(Def.’s

Shortly thereafter, Mr. Meredith
Policy
2

for

damage

the

Eleanor

sustained

in

surveyor,

J.

the

Accident.

Stephen

(Compl.

Russell,

to

¶

6).

inspect

IMU
the

assigned
Eleanor

a

and

determine the cause of the Accident. (Def.’s Mem. Law Supp.
Summ. J. 3).

Mr. Russell concluded that the Eleanor was taking

on water through a number of “leakage points” that were caused
by normal wear and tear, particularly a two-inch gap between two
hull planks.

(Id.).

After receiving Mr. Russell’s report, IMU

denied coverage on the grounds that the Eleanor was unseaworthy
at the time of the Accident, and that the damage, therefore,
fell within the Policy’s Exclusion Clause.
On

February

26,

2010,

the

instant

Complaint in the Circuit Court for Anne Arundel County.

(Notice

of Removal ¶ 1, ECF No. 1).

Mr.

(Id.); (Compl. ¶ 6).

Meredith

filed

Mr. Meredith’s primary contention

is that the Accident was not caused by normal wear and tear or a
failure to maintain the Eleanor in a seaworthy condition, and
that the damage is, therefore, covered under the Policy’s Perils
Clause.

(Compl. ¶¶ 22-23).

On that basis, Mr. Meredith asserts

a claim for breach of contract.1
IMU

removed

the

diversity jurisdiction.

suit

(Id. ¶¶ 18-23).

to

this

Court,

invoking

federal

(Notice of Removal ¶¶ 2-4).

During

discovery, Mr. Meredith disclosed the identity of Charles Smith,

1

Mr. Meredith’s claims against IMU for fraud, negligent
misrepresentation, and violation of the UCC and Maryland
Consumer Protection Laws were dismissed on IMU’s Motion for
Summary Judgment. (See ECF No. 41).
3

an expert witness and the owner of Yacht Maintenance Co., who
would

offer

opinion

Accident and damages.
ECF No. 31-1).

testimony

regarding

the

cause

of

the

(Pl.’s Disclosure of Expert Witnesses 1,

The text of that disclosure is reproduced below:

Charles Smith:
Charles Smith will testify as to
repairs he performed on the subject vessel and the
fairness reasonableness and causation of said repairs
to the subject sinking.
He will also testify [sic]
future repairs to the vessel as a result of the
sinking will cost $300,000. He will also testify the
sinking was not as a result of failure to properly
maintain said vessel nor as a result of normal wear
and tear but as a result of third causes.
Charles
Smith will testify as to extensive maintenance
performed on said vessel in 2007 and how with said
maintenance the damage which caused the vessel to sink
was not as [sic] result of normal wear and tear or
failure to maintain.
(Id. at 3).
report

for

Mr. Meredith did not, however, provide an expert
Mr.

Smith.

(Def.’s

Renewed

Mot.

to

Strike

Pl.’s

Designation of Charles Smith 2 [“Def.’s Renewed Strike Mot.”],
ECF No. 55).
On July 26, 2010, IMU wrote to Mr. Meredith requesting all
disclosures

required

by

Federal

26(a)(2), including expert reports.

Rule

of

Civil

Procedure

(Def.’s Mem. Law Supp. Mot.

to Strike Pl.’s Expert Designations 2 [“Def.’s Strike Mem.”],
ECF No. 29-1).
generated,”
deposition.

but

Mr. Meredith responded that “no reports had been
noted

that

the

witnesses

were

available

for

(Pl.’s Opp’n to Def.’s Mot. to Strike Pl.’s Expert

4

Designations 2, ECF No. 31; Pl.’s Supplemental Disclosures 1,
ECF No. 31-4).
Thereafter, IMU filed a Motion to Strike Plaintiff’s Expert
Designation’s for failure to disclose expert reports as mandated
by Rule 26(a)(2)(B).

(ECF No. 29).

Finding for IMU, the Court

issued a detailed Order requiring Mr. Meredith to provide the
following:
a) The disclosures described in Rule 26(a)(2)(C);
b) A description of the witness’ connection
Eleanor and, if any, to the Accident;

to

the

c) A description of how and when the witness came to
form the proffered opinion(s);
d) A statement whether the witness’ opinion(s) were
formed in the normal course of his duty or activities
in connection with the Eleanor;
e) A statement whether the witness held the proffered
opinion(s) at the time Mr. Meredith’s counsel
contacted him regarding the present litigation;
f) A statement whether Mr. Meredith’s counsel requested
the witness to form the proffered opinion(s);
g) A summary of the witness’ expert qualifications; and
h) A brief statement of how the witness’ qualifications
enabled him to form the proffered opinion(s).
(Ct. Order 1-2, ECF No. 36).

Additionally, the Court instructed

Mr. Meredith that, if upon further reflection he determined that
Mr.

Smith

was

a

retained

expert

witness,

as

defined

in

the

Court’s Order, he was required to produce a complete expert
report as set forth in Rule 26(a)(2)(B).
5

(Id.).

Following the above Order, Mr. Meredith supplemented his
expert designation on May 13, 2011.
of

Expert

Witnesses

Pursuant

Disclosure”], ECF No. 44).

to

(Pl.’s Updated Disclosure
Ct.

Order

[“Pl.’s

Updated

In his updated disclosures, Mr.

Meredith recapitulated much of his prior disclosure:
Charles Smith will testify as to repairs he
performed on the subject vessel and the fairness
reasonableness and causation of said repairs to the
subject sinking.
He will also testify [sic] future
repairs to the vessel as a result of the sinking will
cost $1,000,000. He will also testify the sinking was
not as a result of failure to properly maintain said
vessel nor as a result of normal wear and tear but as
a result of third causes. Charles Smith will testify
as to extensive maintenance performed on said vessel
in 2007 and how with said maintenance the damage which
caused the vessel to sink was not as [sic] result of
normal wear and tear or failure to maintain.
(Pl.’s Updated Disclosure 3).

Mr. Meredith’s Updated Disclosure

further indicated that
a. “The estimates and bills of [Mr.] Smith . . . were
previously attached to Plaintiff’s Response to Request
for Production of Documents.” (Id. at 4).
b. Mr. Smith is a “water [man] and do[es] not regularly
produce a CV.” (Id.).
c. Mr. Smith has “not provided expert testimony in the
past five (5) years) . . . .” (Id.).
d. “[Mr.] Smith performed maintenance on the subject
vessel
prior
to
its
sinking
and
immediately
thereafter.
Upon sinking he was requested, by [Mr.]
Meredith, to provide an estimate for repairs.
His
original estimate to Mr. Meredith was disclosed to
Defense counsel. This was then updated January 27,
2011 to one million dollars and Defendant notified of
the same in writing. His updated estimate is attached
6

and is updated to $1,538,900,000 as the vessel
continues to deteriorate due to lack of necessary
repairs.” (Id. at 4-5).
e. Mr. Smith is an expert whose name was provided by
[Mr.] Meredith to counsel. (Id. at 5).
f. Mr. Smith’s opinions, “other than those which were
required to be updated, were formulated prior to the
commencement of litigation.” (Id. at 5).
g. Counsel for Mr. Meredith “has had no contact with
experts nor requested they formulate opinions other
than requesting an update for repairs from [Mr.] Smith.
This request was done through [Mr. Meredith] and not
through direct contact by counsel.” (Id. at 5).
h. Mr. Smith's opinions were formed, except for a request
for an updated opinion as to the cost of repairs,
prior to the commencement of litigation. (Id. at 5).
i. Mr. Smith “performs boat maintenance as his trade.”
(Id. at 5).
j. “The lifetime of experiences in observing, sailing.
[sic] Salvaging and fixing boats [is] the foundation[]
for the opinions which will be proffered by
. . .
[Mr.] Smith." (Id. at 5).
IMU subsequently deposed Mr. Smith on August 1, 2011, with
the understanding that based on the above disclosures, Mr. Smith
was a hybrid witness.

(Def.’s Renewed Strike Mot. ¶ 8).

At his

deposition, IMU alleges it became clear that Mr. Smith was a
retained expert, such that the full disclosures set forth under
Rule

26(a)(2)(B)

were

required

to

be

produced.

(Id.).

At

bottom, IMU alleges that the opinions attributed to Mr. Smith,
in Mr. Meredith’s expert designation, were not arrived at as
part of Mr. Smith’s ordinary dealings with Mr. Meredith or his

7

observations of the vessel.

(Id.).

Rather, they were derived

from his review of a previously undisclosed report drafted by a
third party surveyor and from review of information unrelated to
the repairs that he performed in this matter.

(Id.).

This

report was allegedly prepared on May 12, 2011, after the close
of discovery, and was not provided to IMU until Mr. Smith's
deposition on August 1, 2011.

(See Def.’s Renewed Strike Mot.

Ex. 2, ECF No. 55).
IMU now moves that the Court sanction Mr. Meredith for his
failure to produce expert reports by excluding the testimony of
Mr. Smith, pursuant to Federal Rule of Civil Procedure 37(b)(2).
II.
A.

DISCUSSION PART I

Motion to Strike Standard of Review
Federal

Rule

of

Civil

Procedure

26(a)(2)(A)

requires

litigants to disclose “the identity of any witness [they] may
use at trial to present evidence under Federal Rule of Evidence
702, 703, or 705.”

Fed.R.Civ.P. 26.

Rule 26(a)(2)(B) further

requires litigants to produce written reports for any witness
who

is

“retained

or

specially

employed

to

provide

expert

testimony in the case” or “whose duties as the party's employee
regularly involve giving expert testimony.”

Id.

Those reports

must include:
(i) a complete statement of all opinions the witness
will express and the basis and reasons for them; (ii)
the facts or data considered by the witness in forming
8

them; (iii) any exhibits that will be used to
summarize
or
support
them;
(iv)
the
witness's
qualifications, including a list of all publications
authored in the previous 10 years; (v) a list of all
other cases in which, during the previous 4 years, the
witness testified as an expert at trial or by
deposition; and (vi) a statement of the compensation
to be paid for the study and testimony in the case.
Fed.R.Civ.P. 26(a)(2)(B).
Rule

26(a)(2)(C),

while

less

onerous,

requires

that

the

disclosure of witnesses who do not need to provide a written
report must nevertheless disclose: “(i) the subject matter on
which the witness is expected to present evidence under Federal
Rule of Evidence 702, 703, or 705; and (ii) a summary of the
facts and opinions to which the witness is expected to testify.”
Fed.R.Civ.P. 26(a)(2)(C).
Rule

37(b)(2)

gives

teeth

to

a

court

imposed

order

to

provide or permit discovery under Rule 26(a)(2) by permitting a
trial court to impose sanctions when a party fails to obey an
order to provide or permit discovery.

Hathcock v. Navistar

Int’l Transp. Corp., 53 F.3d 36, 40 (4th Cir. 1995).

Among the

sanctions available, the express terms of Rule 37(b)(2) permit a
trial court to:
(i) direct[] 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) prohibit[] the disobedient party from
supporting or opposing designated claims or defenses,
or from introducing designated matters in evidence;
(iii) strik[e] pleadings in whole or in part; (iv)
stay[] further proceedings until the order is obeyed;
9

(v) dismiss[] the action or proceeding in whole or in
part; (vi) render[] a default judgment against the
disobedient party; or (vii) treat[] as contempt of
court the failure to obey any order except an order to
submit to a physical or mental examination.
Fed.R.Civ.P. 37(b)(2)(A)(i)-(vii).
In determining what sanction to impose under Rule 37(b)(2),
this Court is guided by consideration of four factors: “(1)
whether the non-complying party acted in bad faith, (2) the
amount of prejudice that noncompliance caused the adversary, (3)
the

need

for

deterrence

of

the

particular

sort

of

non-

compliance, and (4) whether less drastic sanctions would have
been effective.”

S. States Rack and Fixture, Inc. v. Sherwin-

Williams Co., 318 F.3d 592, 597 (4th Cir. 2003).2

2

The United States Court of Appeals for the Fourth Circuit
has published at least two opinions that require consideration
of the four-factor test when determining sanctions under Rule
37(b)(2). See Anderson v. Found. for Advancement, Educ. & Emp’t
of Am. Indians, 155 F.3d 500, 504 (4th Cir. 2001); accord Belk
v. Charlotte-Mecklenburg Bd. of Educ., 269 F.3d 305, 348 (4th
Cir. 2001). The broad language of these decisions suggests that
a court must consider these four factors as part of any
sanctions analysis under Rule 37(b)(2). More recent decisions,
however, appear to require consideration of the four factors
only when imposing the harsher sanctions of dismissal without
prejudice and entry of default judgment.
See Malhotra v. KCI
Technologies, 240 Fed.Appx. 588, 590 (4th Cir. 2007) (“Prior to
imposing the sanction of dismissal, the district court must
consider four factors . . . .”); see also Riggins v. Steel
Technologies, 48 Fed.Appx. 460, 462 (4th Cir. 2002) (“[W]e
established four factors that a court must consider before
imposing default judgment as a sanction.”).
Despite the
apparent ambiguity, however, this court applies and finds the
above referenced four-factor test instructive.
10

B.

Analysis
1.

Renewed Motion to Strike

The Court grants IMU’s Renewed Motion to Strike because
Mr. Meredith violated this Court’s Order by repeatedly failing
to provide adequate Rule 26(a)(2)(B) disclosures.
a.
Central

Mr. Meredith is a retained expert witness.
to

the

Court’s

holding

is

its

threshold

determination that Mr. Smith is a retained expert witness.

The

Court finds that Mr. Meredith has not carried his burden of
demonstrating that Mr. Smith formed his opinions, as to damages,
in the normal course of his duties or activities in connection
with the Eleanor.
Under Rule 26(a)(2)(B), a witness is required to provide an
expert report if the witness is “retained or specially employed
to provide expert testimony in the case” or has “duties as the
party's

employee

testimony.”

A

[that]
witness

regularly
must

involve

submit

a

report

giving

expert

regarding

any

opinions formed specifically in anticipation of litigation, or
otherwise outside the normal course of a duty. See Sullivan v.
Glock,

Inc.,

175

F.R.D.

497,

500

(D.Md.

1997);

Nat’l

R.R.

Passenger Corp. v. Ry. Express, LLC, 268 F.R.D. 211, 216 (D.Md.
2010) (citing Desrosiers v. Giddings & Lewis Mach. Tools, LLC,
No. WDQ-07-2253, 2009 WL 4406149 at *5 (D.Md. Nov. 25, 2009),
rev’d

in

part

on

other

grounds,
11

Desrosiers

v.

Mag

Indus.

Automation Sys., LLC, No. WDQ-07-2253, 2010 WL 213286 (D.Md. May
25, 2010))).

The Court refers to this class of witness as

retained experts.

Conversely, to the extent that a witness’

opinion is based on facts learned or observations made “in the
normal course of duty,” the witness is a hybrid and need not
submit a report.

Id.

A party seeking to avoid producing an

expert report bears the burden of demonstrating that the witness
is a hybrid.

Lee v. Valdez, No. 3:07-CV-1298-D, 2008 WL 4287730

(N.D.Tex. Sept. 18, 2008); Cinergy Commc'ns v. SBC Commc'ns, No.
05-2401-KHV-DJW, 2006 WL 3192544, at *3 (D.Kan. Nov. 2, 2006);
see Tokai Corp. v. Easton Enterprises, 632 F.3d 1358 (Fed.Cir.
2011) (upholding district court’s exclusion of testimony where
proffering party failed to produce evidence that witness was a
hybrid).
Here, Mr. Smith’s opinion as to damages is based on a report
that was prepared in anticipation of litigation.
during

IMU’s

deposition

became

clear

that

Mr.

of

Mr.

Smith

Smith
was

on

Specifically,

August

relying

on

1,
a

2011,

it

previously

undisclosed damages survey and report performed by Quaker Neck
Marine Surveying (the “Quaker Survey & Report”).

The Quaker

Survey

Report

was

performed

on

May

10,

2011,

and

the

prepared on May 12, 2011, after the close of discovery.
ECF No. 23).

was
(See

Mr. Smith then used the Report as the sole basis

of the repair estimate he provided to IMU on May 13, 2011.
12

The

Quaker

Report,

however,

was

not

provided

to

IMU

until

Mr.

Smith’s deposition on August 1, 2011.
Mr.

Meredith’s

argument

that

Mr.

Smith’s

opinion

as

to

damages is based on the normal course of his duty in repairing
and maintaining the vessel is without merit and belied by the
preamble to the Quaker Report.

The introductory text of the

Report states in relevant part that the Survey was performed “at
the request of Cliff Meredith” and that “a list of repairs and
or replacements was compiled for the use of Mr. Meredith and the
Yacht Maintenance Co.”

(Def.’s Renewed Strike Mot. Ex. 2 at 4,

ECF No. 55).
Moreover,

Mr.

Smith’s

testimony

during

his

deposition

buttresses IMU’s claim that the basis of Mr. Smith’s opinion, as
to damages, is the Quaker Report:
Q.

Have you been asked by anyone to provide any
opinions in this case beyond what was done in
these three repairs by Yacht Maintenance Company?

A.

I had been asked to provide what I thought might
put the boat back into serviceable—prices to what
it might cost to put the boat back into
serviceable use and repair it to a pre-sinking
condition.

Q.

And what would that be?

A.

Well, that would be—the
supplied here on May 13th.

Q.

And that’s a little over 1.5 million?

A.

Yes.

13

estimate

to

that

is

(Smith Dep. 52:1-14, Aug. 1, 2011).
Q.

Exhibit 6, your estimate, what part does this
[Quaker Survey & Report] play in your estimate?

A.

What the [Quaker Survey & Report] did is, Mr.
Meredith asked me numerous times to try to
prepare a detailed estimate for him for purposes
of cost of repair.
I told him that I did not
have the amount of time it would take to prepare
that. We have been very, very—we’ve been blessed
to be very, very, busy, and we are very busy. So
I suggested that he obtain a survey—the services
of a surveyor to write the basic outline, to go
inspect the vessel, to write the outline, to
which I would base some of my prices, and it
would give me just a format for doing some
pricing.

Q.

So this survey of May 12, 2011 by Harry T.
Seemans, S-E-E-M-A-N-S, you requested to report
on the condition of the vessel and what needed to
be done to form the basis of your estimate?

A.

I suggested to Mr. Meredith that in the essence
of time that it may be better to have someone to
come—someone who is familiar with the boat maybe,
to come take a look at it so that I could work
from there and that would preclude me from some
of the detailed work that would take too much of
my time, similar to having a paralegal do your
research for you.

(Smith Dep. 63:12-64:13, Aug. 1, 2011) (emphasis added). Mr.
Smith also confirmed that appraising the value of vessels, and
more specifically, the Eleanor, was not within the normal course
of his duties:
Q.

But in terms of what the value of the boat is for
sale purposes that generally comes from someone
else?

A.

Yeah.
And some of my general knowledge of what
boats are worth. I mean, the surveyor is the one
14

usually gets—the surveyor appraiser is usually
the one getting paid to offer his expert opinion.
My opinions in this field are very general and
they’re also very broad. But because of the fact
that we deal with so many types of vessels that
we do stay somewhat abreast of what the values
are, i,e., If I’m to read 10 different yachting
magazines in a month, there are a few of these
boats for sale, so you look and see what the
asking price is.
(Smith

Dep.

55:5-18,

Aug.

1,

2011)

(emphasis

added).

The

foregoing makes clear that Mr. Smith’s opinion as to damages is
not based on facts learned or observations made in the normal
course of his duty, but instead on a damages survey that he did
not perform and on a detailed report that he did not draft.
Accordingly, the Court finds that, as a matter of law, Mr.
Smith

is

a

retained

expert

witness

and

that

Mr.

Meredith,

therefore, had a duty to disclose an expert report as set forth
in Rule 26(a)(2)(B).
b.

Mr. Meredith’s discovery
express court order.

omission

violated

an

Having determined that Mr. Meredith was obliged to provide
an expert report for Mr. Smith’s opinions, the Court further
finds that Mr. Meredith’s omission violated an express Court
Order.
In its Order dated April 18, 2011, the Court instructed
that if “within 30 days of this order, . . . Plaintiff, upon
reflection, determines that any witness is a retained expert, as
defined in the preceding memorandum, he shall produce for that
15

witness a complete expert report as required by Fed.R.Civ.P.
26(a)(2)(B).”

(Ct. Order 2).

Furthermore, the Order required

Mr. Meredith to provide a “description of how and when [Mr.
Smith] came to form the proffered opinion(s).”

(Id.).

Mr. Meredith never provided an expert report for Mr. Smith.
As

discussed

above,

Mr.

Meredith

had

a

duty

to

disclose

an

expert report for Mr. Smith because Mr. Smith’s expert opinion
on damages is based on the Quaker Survey and Report; both of
which were performed in anticipation of litigation and do not
constitute

facts

learned

course of his duty.
failure

to

disclose

or

observations

made

in

the

normal

The omission of the expert report and
the

Quaker

Survey

and

Report

plainly

violated this Court’s express Order.
Mr.

Meredith

argues

that

the

Renewed

Motion

to

Strike

should be denied because (1) he provided IMU with the repair
estimate, (2) IMU had the opportunity to depose Mr. Smith, and
(3)

Mr.

Smith’s

expert

opinion

on

damages

is

based

on

his

firsthand knowledge of the condition of the Eleanor, the nature
and cost of the initial repairs his company performed after the
Eleanor

sank,

and

the

fact

that

he

observed

and

viewed

the

Eleanor almost daily while moored at his place of business in
Cambridge, Maryland.

(Pl.’s Opp’n to Def.’s Renewed Mot. to

Strike Pl.’s Expert Designation of Charles Smith 4 [“Pl.’s Opp’n
to Def.’s Renewed Strike Mot.”], ECF No. 56).
16

The

Court

finds

unpersuasive,

however,

drafting

repair

the

these

arguments

because

the

estimate,

Mr.

record
Smith

unavailing
is

clear

relied,

and

that

not

in

on

his

firsthand knowledge, experience, and observations, but, rather,
on the Quaker Survey and Report.

(See Smith Dep. 52:1-14, 55:5-

18, 63:12-64:13); see also Def.’s Renewed Strike Mot. Ex. 2, at
4)

(noting

that

the

list

of

repairs

and

or

replacements

mentioned in the Quaker Report was compiled for the use of Mr.
Meredith and Mr. Smith).
Additionally, making Mr. Smith available for deposition did
not obviate the need to comply with this Court’s Order.

As this

Court previously noted, a party is not justified in its failure
to disclose “simply because opposing counsel had an opportunity
to depose the witness.

This would shift to the opposing party

the burden that Rule 26 indisputably places on the party calling
the witness.”

(Ct. Mem. 8-9, ECF No. 35) (citing Carr v. Deeds,

453 F.3d 593, 605 (4th Cir. 2006) (“Every litigant in federal
court is plainly entitled under Rule 26(a)(2)(B) to be given the
information spelled out therein, and none should shoulder the
burden

to

independently

investigate

and

ferret

out

that

information as best they can at the expense of their client.”)).
Even

assuming,

arguendo,

that

Mr.

Meredith

reasonably

believed Mr. Smith to be a hybrid witness, subject only to the
Rule 26(a)(2)(C) requirements, his disclosures were nevertheless
17

inadequate and violated this Court’s Order.

Specifically, the

Court instructed that:
Plaintiff shall make the disclosures required by
Rule 26(a)(2)(C) for expert witnesses not filing
reports, which are “the subject matter on which the
witness is expected to present evidence under Federal
Rule of Evidence 702, 703, or 705” and “a summary of
the facts and opinions to which the witness is
expected to testify.” Fed. R. Civ. P. 26(a)(2)(C)
(West 2011). . . . Importantly, the Court observes, in
no uncertain terms, that compliance with this rule
will require a more detailed disclosure than Plaintiff
has thus far provided. In particular, the Court
understands the rule’s reference to “facts” to include
those facts upon which the witness’ opinions are
based, and “opinions” to include a precise description
of the opinion, rather than vague generalizations.
(Ct.

Mem.

12-13).

In

an

attempt

to

further

clarify

Mr.

Meredith’s burden, the Court, by way of example, explained that
“Plaintiff’s

description

opinion

the

that

of

accident

Captains

was

the

Harmon’s

result

of

and

Philip’s

“third

causes”

would not be sufficient, absent a detailed statement of exactly
what

those

causes

Notwithstanding

this

are

or

might

additional

be.”

instruction,

(Id.

at

however,

n.2).
Mr.

Meredith’s supplemental disclosure merely reiterated, verbatim,
much of the same conclusory and vague generalizations.

(See

Pl.’s Updated Disclosure 3) (stating that Captains Harmon and
Philip, as well as Charles Smith, would testify that the sinking
was the result of “third causes”).

In addition, Mr. Meredith

continued his violation of this Court’s Order when, despite an

18

express order to do so, he failed to provide a description of
how and when Mr. Smith came to form the proffered opinion.
Accordingly, the Court finds that Mr. Meredith’s omission
violated an express Court Order.
c.

The Fourth Circuit’s Rule 37(b) balancing test
weighs in favor of granting IMU’s Renewed Motion
to Strike.

In view of the preceding analysis, the Court concludes that
sanctions under Rule 37(b)(2)(A) are available.

As set forth

above
[i]f a party or a party’s officer, director or
managing agent—or a witness designated under Rule
30(b)(6) or 31(a)(4)—fails to obey an order to provide
or permit discovery, including an order under rule
26(f), 35, or 37(a) the court where the action is
pending may issue further just orders.
Fed.R.Civ.P. 37(b)(2)(A). In determining what sanction to impose
under

Rule

37(b)(2),

the

Court

applies

the

Fourth

Circuit’s

four-factor test, namely, “(1) whether the non-complying party
acted

in

bad

faith,

(2)

the

amount

of

prejudice

that

noncompliance caused the adversary, (3) the need for deterrence
of the particular sort of non-compliance, and (4) whether less
drastic sanctions would have been effective.”

S. States, 318

F.3d at 597.
As to the first factor, bad faith, the Court finds that Mr.
Meredith did act in bad faith.

This finding is substantially

supported by the evidence recited herein, which demonstrates a

19

pattern

of

indifference

authority of this Court.

for

the

rules

of

discovery

and

the

“In such cases, not only does the

noncomplying party jeopardize his or her adversary’s case by
such indifference, but to ignore such bold challenges to the
district court’s power would encourage other litigants to flirt
with similar misconduct.”

Nat’l Hockey League v. Metro. Hockey

Club, Inc., 427 U.S. 639, 643 (1976); Wilson v. Volkswagen of
Am., Inc., 561 F.2d 494, 504 (4th Cir. 1978).
In

Mutual

Federal,

the

Court

found

that

the

defendants

acted in bad faith by “their noncompliance and their haphazard
compliance” with discovery orders.

Mut. Fed. Sav. and Loan

Ass’n v. Richards & Assocs., Inc., 872 F.2d 88, 93. (4th Cir.
1989).

Here, Mr. Meredith was given specific instructions by

this Court, after his first failure to comply, on how to comply
with

his

however,

discovery
Mr.

obligations.

Meredith

Despite

disregarded

the

these

Court’s

instructions,
Order

when

he

failed to provide a description of how and when he formed his
opinion.

Moreover, Mr. Meredith failed to timely disclose the

Quaker Report, which formed the basis of Mr. Smith’s opinion on
damages, although it was in his possession for several months
after it was generated on his behalf.
As

to

the

second

element,

prejudice,

Mr.

Meredith’s

dilatory conduct in disclosing the Quaker Report prejudiced IMU
by unnecessarily delaying discovery and the adjudication of this
20

matter.

Specifically, due to Mr. Meredith’s failure to timely

disclose the Quaker Report, IMU was forced to seek leave to
designate its expert witness and draft an expert report.

(See

Mot. for Extension of Time for Additional Expert Disclosures ¶¶
2-4, ECF No. 48).

Additionally, IMU is unable to adequately

defend its case because Mr. Meredith has failed to disclose, and
define in any meaningful way, precisely what “third causes” are
and how they are responsible for the vessel’s sinking.
As to the third factor, deterrence, this Court concurs with
the Fourth Circuit that such “noncompliance . . . stalling and
ignoring the direct orders of the court with impunity . . . must
obviously be deterred.”

Mutual Federal, 872 F.2d at 93.

Finally, as to the fourth element, the Court finds that
alternative sanctions would be ineffective in deterring future
disrespect for the judicial system.
reasoning

is

the

fact

that

Mr.

Central to the Court’s

Meredith

was

given

specific

instructions on how to comply with his failed disclosures and
failed

to

follow

them.

Striking

Mr.

Meredith’s

expert

designation of Mr. Smith, on the issue of damages is, on its
face, a far less severe sanction than dismissal with prejudice
or default judgment.
Accordingly, IMU’s Renewed Motion to Strike Mr. Meredith’s
Expert Designation of Charles Smith will be granted.

The Court

next addresses IMU’s Renewed Motion for Summary Judgment.
21

III. DISCUSSION PART II
A.

Motion for Summary Judgment Standard of Review
Summary judgment is only appropriate “if the pleadings, the

discovery and disclosure materials on file, and any affidavits
show that there is no genuine issue as to any material fact and
that the movant is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(c); see Celotex Corp. v. Catrett, 477 U.S. 317,
323-25 (1986).

In reviewing a motion for summary judgment, the

Court views the facts in a light most favorable to the nonmoving party.

Anderson v. Liberty Lobby, Inc., 477 U.S. 242,

255 (1986).
Once a motion for summary judgment is properly made and
supported, the opposing party has the burden of showing that a
genuine dispute exists.

Matsushita Elec. Indus. Co. v. Zenith

Radio Corp., 475 U.S. 574, 586-87 (1986).

“[T]he mere existence

of some alleged factual dispute between the parties will not
defeat

an

otherwise

properly

supported

motion

for

summary

judgment; the requirement is that there be no genuine issue of
material fact.”

Anderson, 477 U.S. at 247-48.

A “material

fact” is a fact that might affect the outcome of a party’s case.
Id. at 248; JKC Holding Co. v. Wash. Sports Ventures, Inc., 264
F.3d 459, 465 (4th Cir. 2001).

Whether a fact is considered to

be “material” is determined by the substantive law, and “[o]nly
disputes over facts that might affect the outcome of the suit
22

under the governing law will properly preclude the entry of
summary judgment.”

Anderson, 477 U.S. at 248; Hooven-Lewis v.

Caldera, 249 F.3d 259, 265 (4th Cir. 2001).
A “genuine” issue concerning a “material” fact arises when
the evidence is sufficient to allow a reasonable jury to return
a verdict in the nonmoving party’s favor.
248.

Anderson, 477 U.S. at

Rule 56(e) requires the nonmoving party to go beyond the

pleadings and by its own affidavits, or by the depositions,
answers to interrogatories, and admissions on file, designate
specific facts showing that there is a genuine issue for trial.
Celotex Corp., 477 U.S. at 324.
B.

Analysis
1.

There is a
causation.

genuine

issue

of

material

fact

as

to

The Court denies IMU’s Renewed Motion for Summary Judgment
because

there

causation.
appropriate

is

a

genuine

issue

As

set

forth

above,

“if

the

pleadings,

the

of

material

summary

fact

judgment

discovery

and

is

as

to

only

disclosure

materials on file, and any affidavits show that there is no
genuine issue as to any material fact and that the movant is
entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c);
see Celotex Corp., 477 U.S. at 323-25 (1986).
Having reviewed the record, the Court is persuaded that two
equally plausible theories of causation emerge, which create a

23

genuine issue of material fact as to causation.

Under the first

theory, the Eleanor sunk as a result of a failure to maintain
the vessel in a seaworthy condition, as evidenced by alleged rot
and loose planks in the hull.

Conversely, the second theory

suggests that it is just as likely that the Eleanor grounded
during a low tide and that high wave action caused her bottom
framing to flex, which in turn caused gaps between the planks
that allowed water to flow into the boat as the tide rose.
Court

finds

that

looking

at

the

facts

in

the

light

The
most

favorable to the non-moving party, Mr. Meredith, a reasonable
jury could conclude that the Accident did not fall under the
Policy’s

Exclusion

Clause

and

was,

therefore,

covered

as

physical damage under the Perils Clause.
As such, the Court denies IMU’s Renewed Motion for Summary
Judgment under its causation argument.
2.

In Maryland, “damages” is not an essential element of
a claim for breach of contract.

As an alternative theory, IMU seeks summary judgment on the
basis that there is no material dispute of fact as to damages.
Despite

having

expert,

the

Judgment,

stricken

Court

under

its

Mr.

denies

Meredith’s

IMU’s

damages

sole

Renewed

argument,

retained

Motion

because

for

under

damages
Summary
Maryland

law, damages is not an essential element of a claim for breach
of contract.

24

In

Maryland,

“[t]o

prevail

in

an

action

for

breach

of

contract a plaintiff must prove that the defendant owed the
plaintiff

a

contractual

obligation

breached that obligation.”

and

that

the

defendant

Taylor v. NationsBank, N.A., 776

A.2d 645, 651 (Md. 2001) (internal quotation marks and citations
omitted).

It is not necessary, however, that the plaintiff

prove damages resulting from the breach, “for it is well settled
that where a breach occurs, one may recover nominal damages even
though he has failed to prove actual damages.”

PFB, LLC v.

Trabich, 304 Fed.Appx. 227, 228 (4th Cir. 2008) (citing Id.);
see also Planmatics, Inc. v. Showers, 30 Fed.Appx. 117, 118-20
(4th Cir. 2002) (unpublished) (citing Stueber v. Arrowhead Farm
Estates Ltd. P’ship, 519 A.2d 816, 818 (Md.Ct.Spec.App. 1987).
Thus, even where a party fails to provide evidence sufficient to
support a damages claim, “its cause of action for breach of
contract cannot fail as a matter of law because [it] is entitled
to,

at

the

very

least

nominal

determines there was a breach.”
(citing

Planmatics,

Inc.

v.

damages,

if

the

fact-finder

PFB, LLC, 304 Fed.Appx. at 228

Showers,

137

F.Supp.2d

616,

624

(D.Md. 2001)).
In this case, the Court finds that expert testimony, based
upon

the

allegations

actual damages.

and

record,

is

necessary

to

determine

See Wood v. Toyota Motor Corp., 760 A.2d 315

(Md. 2000) (noting that expert testimony is required when the
25

subject matter is so particularly related to some science or
profession that it is beyond the ken of the average layman); see
also Adams v. NVR Homes, Inc., 142 F.Supp.2d 649, 654 (D.Md.
2001).
of

Nevertheless, Mr. Meredith’s cause of action for breach

contract

cannot

fail

as

a

matter

of

law

because

he

is

entitled to, at the very least, nominal damages, if the factfinder determines there was a breach.
contract

with

Mr.

Meredith

is,

Whether IMU breached its

therefore,

a

question

to

be

resolved at trial.
Accordingly, the Court rejects IMU’s argument as to damages
and denies IMU’s Renewed Motion for Summary Judgment on this
ground.
IV.
For

the

foregoing

CONCLUSION

reasons,

the

Court

will,

by

separate

Order, GRANT Defendant’s Renewed Motion to Strike Plaintiff’s
Expert

Designation

of

Charles

Smith

(ECF

No.

55)

and

DENY

Defendant’s Renewed Motion for Summary Judgment (ECF No. 54).

Entered this 20th day of July, 2012
/s/
_____________________________
George L. Russell, III
United States District Judge

26