Armada Concrete, LLC v. Jaynes Corporation et al

Filing 112

ORDER that 111 Jaynes' Motion for Reconsideration is DENIED. Signed by Chief Judge Gloria M. Navarro on 5/9/17. (Copies have been distributed pursuant to the NEF - MMM)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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ARMADA CONCRETE, LLC,
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Plaintiffs,
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vs.
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JAYNES CORPORATION; WESTERN SURETY
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COMPANY,
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Defendants.
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JAYNES CORPORATION,
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Third-Party Plaintiff,
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vs.
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LIBERTY MUTUAL INSURANCE COMPANY, )
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Third-Party Defendant.
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JAYNES CORPORATION,
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Counter Claimant,
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vs.
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ARMADA CONCRETE, LLC,
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Counter Defendant.
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Case No.: 2:14-cv-02176-GMN-GWF
ORDER

Pending before the Court is the Emergency Motion to Reconsider, (ECF No. 111), filed

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by Defendants Jaynes Corporation and Western Surety Company (collectively “Jaynes”).

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Jaynes asks the Court to reconsider its ruling granting the Motion in Limine, (ECF No. 82),

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filed by Plaintiff Armada Concrete, LLC (“Armada”). Because trial in this matter is set to

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begin on May 15, 2017, Jaynes seeks expedited consideration of its Motion. For the reasons

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discussed below, the Court DENIES the Motion.

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I.

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BACKGROUND
On May 2, 2017, during Calendar Call in this case, the Court heard oral argument on the

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parties’ Motions in Limine. Armada’s only Motion in Limine sought to preclude Jaynes from

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offering evidence in support of its counter-claim for liquidated damages. (See Pl.’s Mot. in

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Limine (“MIL”) 10:2–3, ECF No. 82). Specifically, Armada complained that Jaynes had failed

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to comply with Federal Rule of Civil Procedure 26(a)(1)(A) by: (1) failing to properly disclose

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the identity of its person most knowledgeable (“PMK”) of its liquidated damages claim, Rick

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Marquardt (“Marquardt”), Jaynes’ president; (2) failing to timely disclose any evidence

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supporting its liquidated damages claim; and (3) not providing a computation of damages.

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Armada asserted that only after discovery had closed, and following the settlement conference

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before the magistrate judge, did Jaynes formally name Marquardt as a witness and disclose

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documents related to liquidated damages. Armada therefore sought to exclude all evidence of

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liquidated damages pursuant to Federal Rule of Civil Procedure 37(c)(1).

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During Calendar Call, the Court asked Jaynes to identify what information it had

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disclosed regarding the liquidated damages claim that complied with Rule 26. Jaynes pointed

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to Armada’s Exhibit 403, a document obtained by Armada from the United States Corps of

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Engineers through a Freedom of Information Act (“FOIA”) request. Jaynes also argued that

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although Marquardt had never been formally identified as a PMK during discovery, it had

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named Marquardt as a PMK regarding liquidated damages during Armada’s 30(b)(6)

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deposition of Jaynes. Finally, Jaynes argued that Armada did have the calculation for

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liquidated damages as Armada could simply multiply the number of delay days in the

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underlying construction project by the liquidated damages rate disclosed in the parties’

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contract.

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After considering the parties’ arguments on the matter, the Court determined that

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Jaynes’ disclosures failed to comply with Rule 26(a) and granted Armada’s Motion in Limine

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to exclude all evidence supporting Jaynes’ liquidated damages claim pursuant to Rule 37(c)(1).

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(See Minute Order, ECF No. 98). In the instant Motion, Jaynes asks the Court to reconsider its

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ruling.

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II.

LEGAL STANDARD

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“[A] motion for reconsideration should not be granted, absent highly unusual

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circumstances.” Carroll v. Nakatani, 342 F.3d 934, 945 (9th Cir. 2003). Reconsideration is

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appropriate where: (1) the court is presented with newly discovered evidence, (2) the court

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committed clear error or the initial decision was manifestly unjust, or (3) if there is an

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intervening change in controlling law. School Dist. No. 1J, Multnomah County v. ACandS, Inc.,

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5 F.3d 1255, 1263 (9th Cir. 1993). However, a motion for reconsideration is not a mechanism

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for rearguing issues presented in the original filings, Backlund v. Barnhart, 778 F.2d 1386,

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1388 (9th Cir. 1985), or “advancing theories of the case that could have been presented earlier,

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Resolution Trust Corp. v. Holmes, 846 F. Supp. 1310, 1316 (S.D. Tex. 1994). Thus, Rules

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59(e) and 60(b) are not “intended to give an unhappy litigant one additional chance to sway the

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judge.” See Durkin v. Taylor, 444 F. Supp. 879, 889 (E.D. Va. 1977).

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III.

DISCUSSION

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Jaynes argues that “reconsideration is appropriate because the Order is not supported by

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the requisite considerations and findings, and the required analysis demonstrates that exclusion

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of all evidence supporting Jaynes’ liquidated damages claim is inappropriate.” (Mot. to

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Reconsider 4:11–13, ECF No. 111). Although the Court finds no reason to overturn its original

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ruling, the Court nevertheless discusses its reasoning for excluding evidence pertaining to

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liquidated damages in more detail herein.

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Rule 26 violations are subject to the sanctioning power of Rule 37. See Fed. R. Civ. P.

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37(c). Rule 37 is described as a self-executing, automatic sanction that is intended to provide a

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strong inducement for disclosure of material. Yeti by Molly, Ltd. v. Deckers Outdoor Corp., 259

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F.3d 1101, 1106 (9th Cir. 2001). In particular, Rule 37(c)(1) provides that when a party

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violates Rule 26, it “is not allowed to use that information or witness to supply evidence . . . at

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a trial, unless the failure was substantially justified or is harmless.” Fed. R. Civ. P. 37(c)(1).

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“[T]he burden is on the party facing the sanction . . . to demonstrate that the failure to comply

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with Rule 26(a) is substantially justified or harmless.” Torres v. City of L.A., 548 F.3d 1197,

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1213 (9th Cir. 2008).

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The Ninth Circuit gives wide latitude to the district court’s discretion to issue sanctions

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under Rule 37(c)(1). Yeti, 259 F.3d at 1106. If precluding the evidence would cause a claim to

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be dismissed, district courts are required to consider whether the violation involved willfulness,

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fault, or bad faith, and also to consider the availability of lesser sanctions. R & R Sails, Inc. v.

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Ins. Co. of Pa., 673 F.3d 1240, 1247 (9th Cir. 2012). “Courts are more likely to exclude

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damages evidence when a party first discloses its computation of damages shortly before trial

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or substantially after discovery has closed.” Jones v. Wal-Mart Stores, Inc., No. 2:15-cv-1454-

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LDG-GWF, 2016 WL 1248707, at *4 (D. Nev. Mar. 28, 2016).

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Jaynes presents several arguments that its noncompliance with its disclosure obligations

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was harmless and not in bad faith. First, Jaynes contends that the parties engaged in

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“significant” and “extensive” discovery on the issue of liquidated damages. (Mot. to

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Reconsider 4:11–13). Jaynes fails to identify what exchanges qualify as “significant” and

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“extensive” discovery. By its own admission, the only timely disclosed evidence compliant

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with Rule 26 is a document procured by Armada through its own due diligence. Rule 26

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clearly places the onus on the proponent of a claim to comply with disclosure requirements

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supporting that claim. See, e.g., Carrillo v. B & J Andrews Enters., LLC, No. 2:11-cv-01450-

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RCJ, 2013 WL 420401, at *3 (D. Nev. Jan. 31, 2013) (“It is the burden of the disclosing party

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to provide accurate, timely, and sufficient Rule 26(a)(2)(B) disclosures. “); Nihart v. Nat’l Park

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Serv., No. 2:12-CV-00291-APG, 2014 WL 1415198, at *2 (D. Nev. Apr. 10, 2014) (“The

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burden was on [the party asserting the claim] to comply with Rule 26(a)(2)(A) and (C).”). To

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place the burden otherwise is nonsensical.

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Second, Jaynes argues that its failure to disclose any evidence compliant with Rule 26

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amounts to “excusable neglect and oversight” because “Jaynes’ counsel did not reasonably

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believe that a separate disclosure of the same document already disclosed was necessary or

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required under the Rules.” (Mot. to Reconsider 5:25–26, 6:15–16). Further, Jaynes contends

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that “Armada had all the information necessary to calculate liquidated damages.” (Id. 6:25).

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The flaws in these arguments are twofold. First, Jaynes does not explain how Armada’s

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discovery of one document pertaining to liquidated damages completely absolves Jaynes of its

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disclosure responsibilities as to other documents in its possession. Second, Jaynes again places

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the burden on Armada to meet its own obligation to provide a damages calculation; however,

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hoping that Armada surmises Jaynes’ method of calculating damages does not discharge Jaynes

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of Rule 26’s requirements.

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Third, Jaynes asserts that it did disclose a PMK in its initial disclosures, Stephen Brooke

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(“Brooke”), and later specifically identified Marquardt as a PMK regarding liquidated damages

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during Brooke’s deposition. (Id. 8:17–24). Janyes’ initial disclosures, however, identified

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Brooke as a witness “expected to testify as to facts and information pertinent to this litigation,

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the complaint, claim, counterclaims, and defenses.” (Ex. 7 to Mot. to Reconsider 3:19–20, ECF

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No. 111-7) (emphasis added). Further, Armada’s 30(b)(6) request to Jaynes requested a PMK

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for liquidated damages, and Jaynes provided Brooke. Jaynes does not deny the Brooke is not a

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PMK for liquidated damages, and its first initial disclosure is therefore irrelevant as to its

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untimely disclosure of Marquardt.

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The Court concludes that Jaynes’ failure to comply with its Rule 26(a) disclosure

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obligations was the result of willfulness, fault, or bad faith. It is clear that Jaynes intentionally

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made disclosures designed to give as little information as possible despite the requirements of

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Rule 26(a). In most instances, however, Jaynes made no disclosure at all but instead relied on

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Armada to cobble together the substance of Jaynes’ liquidated damages claim. Indeed, to the

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Court’s knowledge Jaynes has yet to provide a calculation of damages. Under these

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circumstances, the Court finds that Jaynes’ failure to comply with its Rule 26(a)(2) disclosure

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obligations was, at a minimum, a result of refusal to provide the information required under

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Rule 26(a)(1)(A) and erroneous reading of Rule 26(a).

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Finally, the Court finds that no lesser sanction other than exclusion of evidence related

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to Jaynes’ liquidated damages claim is suitable. While the Court could simply shift the costs of

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Jaynes’ noncompliance to Jaynes, substantial delay would occur in a case where the parties

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have already received many stipulations to continue deadlines as well as trial and more time

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than deemed presumptively reasonable to complete discovery. It would require reopening

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discovery, establishing new deadlines, and disrupting the Court’s management of its docket on

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the eve of trial. It would also impact the integrity of the Court’s orders. Parties are simply not

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at liberty to ignore the Court’s discovery plan and scheduling order deadlines without

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consequence. Had Jaynes made some effort to make the required disclosures, the Court might

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be influenced to impose lesser sanctions. However, as indicated, the disclosures Jaynes made

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in this case were so unhelpful, misleading, or nonexistent that Armada could not reasonably be

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expected to prepare a meaningful defense to Jaynes’ liquidated damages claim. For these

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reasons, the Court finds that, although preclusion sanctions are dispositive, they are warranted.

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In short, after reviewing the record in this case, the Court has found no reason to

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overturn its previous Order. The Court finds neither clear error nor manifest injustice in the

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reasoning of its previous Order. Accordingly, Plaintiff’s Motion to Reconsider is denied.

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IV.

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CONCLUSION
IT IS HEREBY ORDERED that Jaynes’ Motion for Reconsideration, (ECF No. 111),

is DENIED.
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DATED this _____ day of May, 2017.

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___________________________________

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Gloria M. Navarro, Chief Judge
United States District Judge

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