Felix v. CSAA General Insurance Company

Filing 27

ORDER granting in part and denying in part 16 Motion for Sanctions. Signed by Magistrate Judge Nancy J. Koppe on 3/28/2017. (Copies have been distributed pursuant to the NEF - JM)

1
2
3
4
5
6
7
UNITED STATES DISTRICT COURT
8
DISTRICT OF NEVADA
9
10
BLANCA FELIX,
11
Plaintiff(s),
12
vs.
13
CSAA GENERAL INSURANCE COMPANY,
14
Defendant(s).
15

)
)
)
)
)
)
)
)
)
)

Case No. 2:15-cv-02498-APG-NJK
ORDER
(Docket No. 16)

16

Pending before the Court is Defendant’s motion for sanctions. Docket No. 16. Plaintiff filed

17

a response in opposition, and Defendant filed a reply. Docket Nos. 18, 19. The Court finds the motion

18

properly resolved without a hearing. See Local Rule 78-1. For the reasons discussed more fully below,

19

Defendant’s motion for sanctions is GRANTED in part and DENIED in part.

20

I.

BACKGROUND

21

This is an insurance dispute removed from state court. In general terms, Plaintiff alleges that

22

Defendant failed to honor her uninsured/underinsured insurance policy following a car accident

23

involving a third-party driver. Docket No. 1 at 11-13. Plaintiff brings causes of action for breach of

24

contract, bad faith and unfair claims practices, and breach of the covenant of good faith and fair dealing.

25

Id. at 13-16.

26

On February 3, 2016, the Court entered a scheduling order based on the parties’ proposed

27

discovery plan. Docket No. 11. Through stipulation of the parties, on April 20, 2016, the Court

28

1

extended some of the deadlines in the scheduling order. Docket No. 15. Pertinent to the pending

2

motion, the extended deadlines included the following:

3

•

Expert disclosures: June 2, 2016

4

•

Rebuttal experts: July 2, 2016

5

•

Discovery cutoff: August 1, 2016

6

Id. at 5.

7

On June 2, 2016, Defendant served the expert report of Howard Passin. Docket No. 18 at 35-54.

8

Mr. Passin opined on whether Defendant engaged in bad faith or unfair claims practices. See id. at 47-

9

54. Plaintiff did not designate an expert at that time. See Docket No. 16-1 at 3. On June 29, 2016,

10

Plaintiff designated Jeffrey Thomas as an expert witness and served his report. See Docket No. 18 at

11

22-33. Mr. Thomas opined on whether Defendant engaged in bad faith or unfair claims practices. See

12

id. Plaintiff identified Mr. Thomas as a rebuttal expert. Id. at 12. Through the pending motion, the

13

parties dispute Mr. Thomas’ moniker as a “rebuttal” expert and the consequences that should flow from

14

a decision on that issue.

15

II.

STANDARDS

16

A party must disclose the identity of any expert witness it intends to use at trial. Fed. R. Civ. P.

17

26(a)(2)(A). The party must also provide a written report of the expert. Fed. R. Civ. P. 26(a)(2)(B).

18

Parties must disclose their experts at the times and in the sequence that the Court orders. Fed. R. Civ.

19

P. 26(a)(2)(D).

20

When a party fails to meet its expert disclosure obligations, the Court turns to Rule 37(c) to

21

determine the appropriate consequences. Rule 37(c)(1) provides that a non-compliant party is “not

22

allowed to use the information or witness to supply evidence . . . at trial, unless the failure was

23

substantially justified or harmless.” The party facing the sanction has the burden of showing substantial

24

justification or harmlessness. See Yeti by Molly, Ltd. v. Deckers Outdoor Corp., 259 F.3d 1101, 1106-07

25

(9th Cir. 2001). Courts have outlined several factors in determining whether substantial justification

26

and harmlessness exist, including (1) prejudice or surprise to the party against whom the evidence is

27

offered; (2) the ability of that party to cure the prejudice; (3) the likelihood of disruption of trial; and (4)

28

bad faith or willfulness in not timely disclosing the evidence. See, e.g., David v. Caterpillar, Inc., 324
2

1

F.3d 851, 857 (7th Cir. 2003); Lanard Toys Ltd. v. Novelty, Inc., 375 Fed. Appx. 705, 713 (9th Cir. Apr.

2

13, 2010) (unpublished decision). It is well-settled that “[h]armlessness may be established if [an

3

expert] disclosure is made sufficiently before the discovery cutoff to enable the movant to depose the

4

expert and challenge his expert report.” Pacific Indem. Co. v. Nidec Motor Corp., 203 F. Supp. 3d 1092,

5

1097 (D. Nev. 2016) (Gordon, J.) (collecting cases).

6

Even where non-disclosure is neither harmless nor justified, however, courts are not required in

7

all instances to impose an exclusion sanction. Jackson v. United Artists Theatre Circuit, Inc., 278

8

F.R.D. 586, 594 (D. Nev. 2011). Courts have wide discretion in determining the appropriate sanction.

9

See Yeti, 259 F.3d at 1106. In determining the appropriate sanction, courts look to five factors: (1) the

10

public’s interest in expeditious resolution of litigation; (2) the court’s need to manage its docket; (3) the

11

risk of prejudice to the party seeking sanctions; (4) the public policy favoring disposition of cases on

12

their merits; and (5) the availability of less drastic sanctions. See Wendt v. Host Int’l, Inc., 125 F.3d 806,

13

814 (9th Cir. 1997).

14

III.

ANALYSIS

15

A.

Timeliness of Plaintiff’s Disclosure

16

The parties initially dispute whether Plaintiff’s designation of Mr. Thomas was timely. As noted

17

above, Plaintiff’s disclosure came after the initial expert disclosure deadline but before the rebuttal

18

expert disclosure deadline. Plaintiff argues that Mr. Thomas is a rebuttal expert, such that his disclosure

19

was timely. E.g, Docket No. 18 at 5-7. In particular, Plaintiff argues that Mr. Thomas’ expert opinion

20

rebuts the expert opinion of Mr. Passin. See id. at 5. Defendant argues that Mr. Thomas is an initial

21

expert disguised as a rebuttal expert, such that his disclosure was not timely. E.g., Docket No. 16 at 9-

22

11. Defendant has the better argument.

23

Rebuttal expert testimony is restricted to subjects that are “intended solely to contradict or rebut

24

evidence on the same subject matter identified by another party.” Fed. R. Civ. P. 26(a)(2)(D)(ii).

25

Magistrate Judge Lawrence R. Leavitt succinctly stated the standards for determining whether an expert

26

report qualifies as a rebuttal report:

27
28

Rebuttal expert reports “necessitate ‘a showing of facts supporting the opposite
conclusion’ of those at which the opposing party's experts arrived in their responsive
reports.” Bone Care Int'l, LLC v. Pentech Pharmaceuticals, Inc., 2010 WL 389444
3

9

(N.D.Ill. Sep. 30, 2010) (quoting ABB Air Preheater, Inc. v. Regenerative Environmental
Equip., Inc., 167 F.R.D. 668, 669 (D.N.J.1996)). Rebuttal expert reports are proper if
they contradict or rebut the subject matter of the affirmative expert report. Lindner v.
Meadow Gold Dairies, Inc., 249 F.R.D. 625, 636 (D.Haw. 2008). They are not, however,
the proper place for presenting new arguments. 1–800 Contacts, Inc. v. Lens. com, Inc.,
755 F.Supp.2d 1151, 1167 (D.Utah 2010); see LaFlamme v. Safeway, Inc., 2010 WL
3522378 (D.Nev. Sep. 2, 2010); cf. Marmo v. Tyson Fresh Meats, Inc., 457 F.3d 749,
759 (8th Cir.2006) (“The function of rebuttal testimony is to explain, repel, counteract
or disprove evidence of the adverse party.”) (citation omitted). “If the purpose of expert
testimony is to ‘contradict an expected and anticipated portion of the other party's casein-chief, then the witness is not a rebuttal witness or anything analogous to one’ “ Amos
v. Makita U.S.A., 2011 WL 43092 at *2 (D. Nev Jan. 6, 2011) (quoting In re Apex Oil
Co., 958 F.2d 243, 245 (8th Cir .1992)); see also Morgan v. Commercial Union Assur.
Cos., 606 F.2d 554, 556 (5th Cir.1979); LaFlamme, 2010 WL 3522378 at *3. Rather,
rebuttal expert testimony “is limited to ‘new unforeseen facts brought out in the other
side's case.’ “ In re President's Casinos, Inc., 2007 WL 7232932 at * 2 (E.D.Mo. May
16, 2007) (quoting Cates v. Sears, Roebuck & Co., 928 F.2d 679, 685 (5th Cir.1991)).

10

R&O Const. Co. v. Rox Pro Int’l Grp., Ltd., 2011 WL 2923703, at *2 (D. Nev. July 18, 2011); see also

11

Campell v. Garcia, 2015 WL 995244, at *2 (D. Nev. Mar. 6, 2015) (same); Nunez v. Harper, 2014 WL

12

979933, at *1 (D. Nev. Mar. 12, 2014) (same).

1
2
3
4
5
6
7
8

13

Mr. Thomas’ expert report does not qualify as a rebuttal report. Mr. Thomas opined on whether

14

Defendant breached its duty of good faith and whether it violated the Nevada Unfair Claims Practices

15

Act. See, e.g., Docket No. 18 at 23. These are issues central to Plaintiff’s claims, see, e.g., Docket No.

16

1 at 15 (complaint alleging that Defendant breached the covenant of good faith and fair dealing by

17

violating the Unfair Claims Practices Act), and the report of Defendant’s expert on these issues was

18

clearly foreseeable. Given the centrality of these issues to this case, Plaintiff’s contention that Mr.

19

Thomas provided a rebuttal report is not persuasive. See, e.g., Downs v. River City Group, LLC, 2014

20

WL 814303, at *5 (D. Nev. Feb. 28, 2014). Moreover and significantly, Mr. Thomas’ report does not

21

even assert that he reviewed the opinion of Mr. Passin in preparing his own report. See Docket No. 18

22

at 30-31 (listing information reviewed). “Courts have repeatedly held that an expert is improperly

23

designated as a rebuttal expert when he has failed to review the initial expert report, or otherwise failed

24

to indicate that he was aware of the opinions offered by the initial expert.” See, e.g., Clear-View Techs.,

25

Inc. v. Rasnick, 2015 WL 3509384, at *4 (N.D. Cal. June 3, 2015) (internal quotations and alterations

26

omitted) (citing Houle v. Jubilee Fisheries, Inc., 2006 WL 27204, at *3 & n.4 (W.D. Wash. Jan. 5, 2006)

27

and Amos, 2011 WL 43092, at *1). Quite simply, “an expert cannot be said to ‘rebut’ testimony he or

28

she has never seen or reviewed.” Clear-View Technologies, 2015 WL 3509384, at *4.
4

1
2

Mr. Thomas’ report is not a rebuttal report and, therefore, Plaintiff’s disclosure was untimely
under the Court’s scheduling order.

3

B.

Appropriate Sanction

4

Having determined that the disclosure of Mr. Thomas’ expert report was untimely, the Court

5

turns to whether Plaintiff has established substantial justification or harmlessness. See Fed. R. Civ. P.

6

37(c)(1). As noted above, it is widely accepted that the untimeliness of an expert report is sufficiently

7

harmless to prevent an exclusion sanction when the opposing party had time to depose the expert and

8

challenge his expert report before the discovery cutoff. See, e.g., Pacific Indemnity, 203 F. Supp. 3d at

9

1097. That is the case here. As Plaintiff notes, Mr. Thomas’ report was disclosed before the rebuttal

10

expert report and more than a month before the close of discovery, which provided Defendant sufficient

11

opportunity to depose him and provide its own rebuttal report before the close of discovery. See Docket

12

No. 19 at 7. As a result, the Court finds that the untimely disclosure of Mr. Thomas was sufficiently

13

harmless that exclusion is not the appropriate remedy in this case.1

14

Even upon a showing of harmlessness sufficient to rule out an exclusion sanction, courts are

15

empowered to remedy lingering prejudice by imposing less severe sanctions. See, e.g., Pacific

16

Indemnity, 203 F. Supp. 3d at 1098. For example, courts may award appropriate attorneys’ fees caused

17

by the failure. Fed. R. Civ. P. 37(c)(1)(A). The untimely disclosure in this case resulted in prejudice

18

to Defendant in that it expended its resources to file the instant motion.2 As a result, the Court will

19

award Defendant the reasonable attorneys’ fees incurred in preparing and filing the instant motion and

20

reply. To the extent counsel cannot agree among themselves on the amount of those fees, Defendant

21

shall file a “Motion to Calculate Attorneys’ Fees” by April 11, 2017. Any response from Plaintiff shall

22

be filed by April 17, 2017.

23
24
25
26
27
28

1

Because the motion to strike was pending, it does not appear that Defendant actually moved
forward with Mr. Thomas’ deposition or preparing a rebuttal to his report. Defendant shall have until May
12, 2017, to depose Mr. Thomas and serve a rebuttal expert report, if Defendant deems one necessary.
2

Defendant seeks to recover its attorneys’ fees incurred in the future deposition of Mr. Thomas. Se
Docket No. 19 at 7. The Court declines to award such fees based on the circumstances of this case. Cf.
Pacific Indemnity, 203 F. Supp. 3d at 1098.
5

1
2

IV.

CONCLUSION
For the reasons discussed more fully above, Defendant’s motion for sanctions is GRANTED

3

in part and DENIED in part.

4

IT IS SO ORDERED.

5

DATED: March 28, 2017

6
7

______________________________________
NANCY J. KOPPE
United States Magistrate Judge

8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
6