Severn Peanut Co., Inc. et al v. Industrial Fumigant Co. et al

Filing 63

ORDER DENYING 54 Plaintiff's Motion for Partial Summary Judgment, and GRANTING 59 Plaintiff's Motion to Strike. Signed by US District Judge Terrence W. Boyle on 9/22/2013. Counsel is directed to read Order in its entirety for critical information. (Fisher, M.)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
EASTERN DIVISION
NO. 2:11-CV-00014-BO

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SEVERN PEANUT CO., INC., et al,
Plaintiff,
V.

INDISTRIAL FUMIGANT CO. and
ROLLINS INC.,
Defendants.

ORDER

This matter is before the Court on plaintiffs' motion for partial summary judgment [DE
54], and plaintiffs' motion to strike defendants' notice of filing of additional materials in
opposition to plaintiffs motion for partial summary judgment [DE 59]. The motion are now ripe
for adjudication. For the reasons stated herein, the plaintiffs' motion for partial summary
judgment is DENIED and plaintiffs' motion to strike is GRANTED.

BACKGROUND
On April 20, 2009, Industrial Fumigant Co. ("IFC") and Severn Peanut Co. ("Severn")
entered into a contract for IFC to fumigate Severn's peanut storage dome ("dome"). On August
4, 2009, IFC applied the fumigant and sealed the dome. Seven days later, Severn discovered
smoke coming from the dome and notified IFC. On August 29, 2009, there was an explosion in
the dome and the dome and peanuts inside sustained severe damage. Severn alleges that it
sustained $20 million in damages as a result of the fire, which it attributes to defendants'
improper application of the pesticide Fumitoxin.

As a result of this incident, plaintiffs filed this suit against defendants on April 8, 2011.
Plaintiffs assert claims for negligence, negligence per se, and breach of contract. Defendants
asserted, among other defenses, contributory negligence on the part of Severn. On March 21-22,
2013, plaintiffs deposed defendants' representatives pursuant to FED. R. Crv. P. 30(b)(6). In the
depositions plaintiffs asked defendants if they knew of any facts that would support defendants'
assertion of the defense of contributory negligence on the part of Severn. Both defendants'
representatives denied any knowledge of such facts. In response, on May 6, 2013, plaintiffs filed
this motion for partial summary judgment seeking to foreclose defendants from asserting the
defense of contributory negligence at trial.
DISCUSSION
I.

MOTION FOR PARTIAL SUMMARY JUDGMENT.

A motion for summary judgment cannot be granted unless there are no genuine issues of
material fact for trial. FED. R. Crv. P. 56; Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986).
The moving party must demonstrate the lack of genuine issue of fact for trial and if that burden is
met, the party opposing the motion must "go beyond the pleadings" and come forward with
evidence of a genuine factual dispute. Celotex, 477 U.S. at 324. The Court must view the facts
and the inferences drawn from the facts in the light most favorable to the non-moving party.
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-88 (1986). Conclusory

allegations are insufficient to defeat a motion for summary judgment. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 249 (1986) ("[T]he mere existence of some alleged factual dispute between

the parties will not defeat an otherwise properly supported motion for summary judgment.")
(emphasis in original).

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A notice of deposition pursuant to FRCP 30(b)(6) requires a corporation to designate one
or more persons to testify with respect to matters set out in the deposition notice. The corporation
is required to prepare the designated individuals so that they may testify to complete,
knowledgeable, and binding answers on behalf of the corporation. Marker v. Union Fidelity Life
Ins. Co., 125 F.R.D. 121, 126 (M.D.N.C. 1989). When a corporation produces an employee for a

30(b)(6) deposition to testify to corporate knowledge, the employee must provide responsive
underlying factual information that is "reasonably available" to the corporation. Sprint
Communications Co. L.P. v. Theglobe.com, Inc., 236 F.R.D. 524, 529 (D. Kan. 2006). This

includes facts gathered from prior fact witness deposition testimony, other documents the
employee could review, and facts passed on to the employee by corporate lawyers because the
attorney-client privilege does not apply to the disclosure of facts. Id. (citing Upjohn Co. v.
United States, 449 U.S. 383, 395-96 (1981)).

Plaintiffs argue that because both corporate defendants' representatives in the 3O(b)(6)
depositions testified that they were unaware of any facts to support the specific allegations of
plaintiff Severn's alleged contributory negligence, no facts to support the allegations exist and
therefore plaintiffs are entitled to summary judgment on the issue. This Court disagrees.
Plaintiffs attempt to rely on United States v. Taylor, 166 F.R.D. 356 (M.D.N.C. 1996) to
stand for the proposition that a party cannot offer testimony contrary to its 30(b)(6) testimony at
trial. Therefore, plaintiffs argue, defendants cannot now offer testimony contrary to their
30(b)( 6) testimony in order to show the existence of a material issue of fact. Plaintiffs' reliance is
mistaken. Taylor involved a pre-deposition order discussing the responsibility of a corporate
party to have a 30(b)(6) witness properly prepare for the deposition. Interstate Narrow Fabrics,
Inc. v. Century USA, Inc., 218 F.R.D. 455, 462 (M.D.N.C. 2003). It was not a sanctions case and

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any discussion of limiting the use of 30(b)(6) testimony at trial was necessarily dicta. Id. Even
then, the opinion noted that statements in a 30(b)(6) deposition are not the same as judicial
admissions. !d. The evidence offered in the 30(b)(6) deposition is not as binding as plaintiffs
contend. Even if precluding defendants from offering certain evidence is the proper course of
action, the time and place to raise it would have been in a motion under Rule 37. !d. at 461-62.
Therefore defendants are not precluded from providing evidence different or beyond that which
was provided at its 30(b)(6) deposition, especially in light of the fact that the defendants'
deadline to disclose expert witnesses had not yet passed, and summary judgment will be decided
with reference to all appropriate evidence. See id. at 462.
Defendants have clearly identified multiple facts which raise issues of material fact as to
plaintiff Severn's contributory negligence. Many of these facts come from prior witness
testimony of plaintiffs' own employees, all of which was available to plaintiffs. Although
plaintiffs are not required to guess which facts defendants will rely upon in asserting contributory
negligence, their motion for partial summary judgment is premature. Defendants had not even
been able to obtain their expert witnesses' opinions at the time which plaintiffs moved for partial
summary judgment. Defendants however, pointed to sufficient facts already in the record to
support their claim that there are issues of material fact as to plaintiffs' contributory negligence.
Although defendants late-submitted their expert witness report as an addition to their response
brief, this Court did not, and did not need to, consider that report in considering plaintiffs'
motion for partial summary judgment. Because defendants have pointed to sufficient evidence
that raises an issue of material fact as to Severn's contributory negligence, plaintiffs motion for
partial summary judgment is denied.

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II.

MOTION TO STRIKE.

Defendants' submission of the Carol Jones affidavit and report 27 days after the filing of
their memorandum in opposition to plaintiffs' motion for partial summary judgment, as a
supplement to the same, and 51 days after plaintiffs' filed their motion for partial summary
judgment is clearly in violation of Local Rule 7.1(e)(l). The relevant part states "Responses and
accompanying documents shall be filed within 21 days after service of the motion in question

unless otherwise ordered by the court or prescribed by the applicable Federal rules of Civil
Procedure" Local Rule 7.1 (e)(I) (emphasis added). Therefore plaintiffs' motion to strike is
granted. This Court did not consider the Carol Jones affidavit or report in considering plaintiffs'
motion for partial summary judgment. However, nothing in this order shall prevent defendants
from submitting the affidavit and report into evidence for further proceedings.
CONCLUSION

For the foregoing reasons, the plaintiffs' motion for partial summary judgment is
DENIED and the plaintiffs' motion to strike is GRANTED. Nothing in this order shall prevent
defendants from submitting the struck materials into evidence for further proceedings. The
matter may proceed in its entirety.

SO ORDERED.
This the

U

day of September, 2013.

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UNITED STATES DISTRICT JUDGE
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