First Guaranty Bank v. Republic Bank

Filing 256

MEMORANDUM DECISION denying 231 Motion in Limine. Signed by Judge Jill N. Parrish on 5/13/21. (alf)

FILED
2021 MAY 13 AM 11:47
CLERK
U.S. DISTRICT COURT
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH

MEMORANDUM DECISION AND
ORDER DENYING MOTION IN LIMINE

FIRST GUARANTY BANK,
v.

Plaintiff,

Case No. 1:16-cv-00150-JNP-CMR

REPUBLIC BANK, INC. nka RB
PARTNERS, INC.,

District Judge Jill N. Parrish

Defendant.

Before the court is defendant Republic Bank, Inc.’s motion to exclude plaintiff First
Guaranty Bank’s evidence in support of its damages claims outlined in its eighth supplemental
disclosure. The court DENIES the motion.
BACKGROUND
First Guaranty served its Rule 26 initial disclosure in January 2017. The disclosure
provided damages calculations that included attorney fees for “Utah counsel” in the amount of
$14,440.50 and for “Bankruptcy counsel in Texas and Mississippi” in the amount of $96,456.21.
The Texas and Mississippi attorney fees were for the Pioneer bankruptcy proceedings. The initial
disclosure stated that “[t]hese amounts will be supplemented as the case progresses.”
First Guaranty served eight supplemental disclosures during the litigation. It served its
fourth supplemental disclosure in March 2019. This disclosure did not supplement its damages
calculation. Instead, it disclosed a document that First National potentially could use to support its
claims, as required by Rule 26(a)(1)(A)(ii) and (e)(1)(A) of the Federal Rules of Civil Procedure.
The document disclosed was a declaration of George King stating that his law firm had billed
$17,421.50 between August 11, 2016 and September 2, 2016 for the Pioneer bankruptcy.

First Guaranty served its fifth supplemental disclosure in October 2019. This disclosure
updated its damages calculation by incorporating by reference its supplemental responses to
Republic’s interrogatories. The supplemental responses stated that Republic’s untimely
notification of the Pioneer bankruptcy caused First Guaranty to incur additional legal fees in the
bankruptcy proceedings, which were set forth in the King declaration. The supplemental responses
also stated that First Guaranty claimed as damages a portion of the attorney fees incurred in this
action, in the amount of $256,979.21.
First Guaranty served its sixth supplemental disclosure in January 2020, which disclosed a
spreadsheet listing lease payments and expenses associated with the leases. The spreadsheet listed
“Legal & Appraisal Fees” totaling $684,381.54. The sixth supplemental disclosure also included
a spreadsheet setting forth First Guaranty’s damage calculation for its recission claim. The
spreadsheet listed $286,786.24 in attorney fees associated with the pool of leases containing the
Pioneer lease.
In July 2020, First Guaranty served its seventh supplemental disclosure. The parties have
not provided this disclosure to the court, but Republic represents that First Guaranty disclosed for
the first time that it was seeking attorney fees for a lawsuit against Independent Healthcare
Management, an affiliate of Pioneer.
Judge Romero entered the Tenth Amended Scheduling Order in this case on October 26,
2020. The order established a November 2, 2020 deadline for Republic to supplement its damages
disclosures. On November 12, 2020, First Guaranty served its eighth supplemental disclosure,
which updated the amount of attorney fees it sought as follows: (1) “Legal Fees for Pioneer
Bankruptcy,” $412,338; (2) “Legal Fees for Independent Healthcare,” $91,526.84; and (3) “Legal
Fees for Republic Lawsuit,” $327,544.53.

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On March 22, 2021, Republic filed a motion to exclude evidence of attorney fee damages.
Republic argues that First Guaranty failed to properly disclose its damages calculations for
attorney fees as required by Rule 26(a)(1)(A)(iii) and (e)(1). Republic further asserts that the
appropriate sanction for this failure is the exclusion of evidence of attorney fee damages in excess
of the $17,421.50 identified in the fifth supplemental disclosure.
ANALYSIS
Under Rule 26(a)(1)(A)(iii), a party must provide to other parties “a computation of each
category of damages claimed by the disclosing party—who must also make available for
inspection and copying as under Rule 34 the documents or other evidentiary material, unless
privileged or protected from disclosure, on which each computation is based.” After making an
initial damages calculation disclosure, the party “must supplement or correct its disclosure . . . in
a timely manner if the party learns that in some material respect the disclosure . . . is incomplete
or incorrect, and if the additional or corrective information has not otherwise been made known to
the other parties during the discovery process or in writing.” FED. R. CIV. P. 26(e)(1). “If a party
fails to provide information . . . as required by Rule 26(a) or (e), the party is not allowed to use
that information or witness to supply evidence on a motion, at a hearing, or at a trial, unless the
failure was substantially justified or is harmless.” Id. 37(c)(1).
Republic argues that First Guaranty failed to make adequate and timely disclosures of its
damages calculations as required by Rule 26(a) and (e). Its principal contention is that First
Guaranty’s fifth supplemental disclosure, served in October 2019, effectively limited its damages
calculation for attorney fees attributable to the Pioneer bankruptcy to the $17,421.50 disclosed in
the King declaration. In other words, Republic asserts that the fifth supplemental disclosure waived
First Guaranty’s previous claims for all of the attorney fees associated with Pioneer bankruptcy.
Republic argues that it relied on the fifth supplemental disclosure and that the November 12, 2020
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eighth supplemental disclosure, which disclosed a damages calculation for the Pioneer bankruptcy
totaling $412,338, was untimely because fact discovery had already closed.
The court disagrees with Republic. First, the court rejects Republic’s contention that First
Guaranty had failed to disclose its claim for reimbursement of all of its attorney fees for the Pioneer
bankruptcy during the period of time between the fifth supplemental disclosure and the eighth
supplemental disclosure. The sixth supplemental disclosure, which was served in January 2020,
disclosed spreadsheets indicating that First Guaranty claimed damages for the Pioneer bankruptcy
in excess of the $17,421.50 discussed in the King declaration. Republic does not argue that the
sixth supplemental disclosure was untimely.
Second, even if the court had concluded that the eighth supplemental disclosure was
untimely, there would be no basis for excluding evidence of damages under Rule 37(c) because
any failure to make a timely disclosure was harmless. Republic argues that it was harmed by the
allegedly untimely eighth supplemental disclosure because fact discovery had closed on August
31, 2018, preventing it from conducting further discovery related to the claim for fees for the
Pioneer bankruptcy. But Republic ignores that fact that the fifth supplemental disclosure, which
allegedly capped the Pioneer bankruptcy damages at $17,421.50, was not served until October
2019, over a year after fact discovery had closed. Thus, even if the fifth supplemental disclosure
had waived First Guaranty’s broader claim to attorney fee damages found in the initial disclosure,
the waiver came well after the close of fact discovery. Moreover, the eighth supplemental
disclosure and the supporting documents were served before the parties engaged in expert
discovery. 1 Accordingly, no discovery was conducted between the fifth supplemental disclosure

The eighth supplemental disclosure was served about six weeks before Republic deposed First
Guaranty’s experts. The court granted an extension of time for Republic to disclose its expert
1

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and the eighth supplemental disclosure—the period of time during which Republic alleges that it
believed that the Pioneer bankruptcy fees were limited to the King declaration. Because Republic
has not shown that it was denied the opportunity to conduct discovery on First Guaranty’s broader
damages theory, any untimely disclosure was harmless.
Republic also argues that First Guaranty failed to timely disclose the billing records
supporting its attorney fee damages because it did not produce the records until the eighth
supplemental disclosure. But Rule 26 requires the disclosure of “a computation of each category
of damages,” not documents supporting those calculations. The disclosing party must only make
these documents “available for inspection and copying.” Republic does not allege that First
Guaranty refused any requests to make supporting documents available to it.
Finally, Republic asserts that the eighth supplemental disclosure is deficient because it does
not explicitly connect the attorney fees claimed to the late notice of the Pioneer bankruptcy. This
is effectively an argument that First Guaranty is entitled only to attorney fees linked to the late
notice of the bankruptcy. But Rule 26 is not an appropriate vehicle to challenge the merits of First
Guaranty’s damages claims. Nor does it provide an opportunity to argue that First Guaranty waived
its claim to a broader scope of attorney fees attributable to the bankruptcy proceedings in its
summary judgment briefing. Rule 26 requires only the disclosure of a computation of each
category of damages and timely supplements to those calculations. The proper forum for
challenging the merits of First Guaranty’s claimed damages is the bench trial.
In short, the court rejects Republic’s arguments for exclusion of evidence under Rule 26(a)
and (e) and Rule 37(c).

witness reports, which gave Republic over four months from the eighth supplemental disclosure
to designate its expert.
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CONCLUSION
The court DENIES Republic’s motion in limine to exclude evidence of damages.
DATED May 13, 2021.
BY THE COURT

______________________________
Jill N. Parrish
United States District Court Judge

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