Grace Christian Fellowship v. KJG Investments Inc et al

Filing 285

ORDER signed by Magistrate Judge Patricia J Gorence on 8/4/2011. The plaintiffs motion to amend/correct the scheduling order be and hereby is denied. (Docket #277). The defendants KJG and PSK's motion to strike be andhereby is denied in part and granted in part as stated herein. (Docket #273) (cc: all counsel) (mlm)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
GRACE CHRISTIAN FELLOWSHIP,
Plaintiff,
v.

Case No. 07-C-0348

KJG INVESTMENTS INC. and
COLONY INSURANCE COMPANY
and PSK INVESTMENTS, LLC,
Defendants.

DECISION AND ORDER
On April 13, 2007, plaintiff Grace Christian Fellowship (Grace) filed this action against
KJG Investments, Inc. (KJG) and Colony Insurance Co. (Colony) under the citizen suit
provision of the Resource Conservation and Recovery Act (RCRA), 42 U.S.C. § 6972. The
plaintiff also asserted state law claims of continuing trespass, nuisance, and negligence.
On September 20, 2007, the plaintiff filed a motion for a preliminary injunction. The
court held an evidentiary hearing on November 15, 2007, which was continued on the
following dates: November 21, 2007, January 23, 2008, January 31, 2008, February 1, 2008,
April 9, 2008, and August 4, 2008. On April 7, 2008, the plaintiff filed a motion to present
rebuttal testimony of three witnesses. The court denied the plaintiff’s motion after concluding
that the plaintiff wanted to present new evidence based on new testing which would further
extend resolution of the preliminary injunction motion. On August 7, 2009, the court denied
the plaintiff’s preliminary injunction motion, but granted the plaintiff leave to file an amended
complaint.
On August 11, 2009, the plaintiff filed an amended complaint adding defendant PSK
Investments LLC (PSK). On October 16, 2009, defendants KJG and PSK filed a motion to
strike the expert witness report of the plaintiff’s expert, James Drought, and to preclude the

plaintiff from introducing expert evidence not disclosed in a timely fashion pursuant to the
court’s scheduling order. The court granted in part and denied in part the defendants’ motion
to strike the plaintiff’s expert witness report and set a new scheduling order.
On January 20, 2010, the plaintiff filed a motion for leave to file a second amended
complaint. The plaintiff’s proposed second amended complaint alleged supplemental facts
which occurred either after the first amended complaint was filed with the court on January 21,
2008, or after the court permitted service of the first amended complaint on August 7, 2009.
Additionally, the plaintiff alleged that defendant Colony Insurance was directly negligent by its
limitation and control the environmental work by defendants KJG and PSK. The court denied
the plaintiff’s motion for leave to file a second amended complaint finding that the plaintiff
unduly delayed in filing its motion to file a second amended complaint and that the defendants
would suffer undue prejudice if the plaintiff was allowed to file the proposed second amended
complaint.
Pursuant to the amended scheduling order, the parties have filed the following motions:
1) plaintiff’s motion for summary judgment on the liability of defendants for trespass, nuisance
and negligence and partial determination of liability under RCRA (Docket # 224), 2) plaintiff’s
motion for summary judgment as to defendant Colony Insurance (Docket # 229), and 3)
defendants KJG and PSK’s motion for summary judgment. (Docket # 251). Subsequently,
the parties filed additional motions.
On October 27, 2010, defendants KJG and PSK filed a motion to strike specified
documents from the record. (Docket #273). The defendants seek an order striking the
following documents from the record for the purposes of the parties’ motions for summary
judgment:
1.

The affidavit of Chris Peshek and the supporting documents attached thereto;
-2-

2.

The affidavit of Heidi Woelfel and the supporting documents attached thereto;

3.

Paragraphs four and five of the affidavit of James Drought;

4.

Paragraph six of the affidavit of Thomas Heine;

5.

Paragraphs eight through ten of the affidavit of Theodore Hogan;

6.

Paragraph six of the affidavit of Judi Gavin;

7.

Affidavit of Pamela H. Schaefer (October 13, 2010) and the documents attached

thereto.
The defendants assert that the plaintiff’s submission of documents one through five violates
the court’s amended scheduling order and that documents six and seven contain inadmissable
hearsay.
The plaintiff filed a brief opposing the defendants’ motion to strike and also a motion
to amend the scheduling order. (Docket # 277). By its motion amend, the plaintiff to seeks
an order amending the scheduling order pursuant to Fed. R. Civ. P. 16(b)(4), 34 and 26(e)(1)
“in order to accommodate the needs of the parties to continue to exchange groundwater/soil,
and air data which is periodically obtained by both parties and filed with the Department of
Natural Resources (DNR).” (Plaintiff’s Civil Local Rule 7(h) Expedited Nondispositive Motion
to Amend the Scheduling Order [Motion to Amend] at 1).
Defendants’ motion to strike and the plaintiff’s motion to amend are related motions and
will be addressed together. The remaining motions will be addressed in a subsequent
decision and order. The resolution of the plaintiff’s motion to amend the scheduling order
affects the defendants’ motion to strike. Thus, the court will first address the motion to amend.
The plaintiff asserts that pursuant to Fed. R. Civ. P. 26(e)(1), the parties have a duty
to supplement their document production if it is incomplete. The plaintiff further asserts that
in this case, the parties continue to develop records of ongoing environmental investigative
-3-

testing. According to the plaintiff, defendants KJG and PSK, for example, have neither
completed their investigation, nor received approval from the DNR for any remedial action plan
required under DNR regulations.
Additionally, the plaintiff indicates that defendants KJG and PSK have filed reports with
the DNR after the cut-off date of December 15, 2009, including Raghu Singh’s reports of
March 2010 attached to the September 15, 2010, Affidavit of Raghu Singh, which was filed
with the court in support of KJG’s motion for summary judgment. The plaintiff states that in
August 2010, both it and defendant KJG conducted groundwater testing in the alley north of
the KJG property. The plaintiff asserts that although it provided a copy of its test results
through its counsel to defendant KJG and PSK’s counsel, defendant KJG has not provided
a copy of its August 2010 test results to the plaintiff. Thus, “in order to assure a regular and
consistent exchange of such testing results and data,” the plaintiff requests that the current
discovery deadline be extended “as it relates to the issue of investigative environmental data
obtained by either party to this case after [the] December 15, 2009 cut off date, and forty-five
(45) days prior to trial.” (Motion to Amend at 2).
In response to the plaintiff’s motion to amend the scheduling order, defendants KJG
and PSK assert that they have no intention of utilizing any environmental testing data obtained
after the scheduling order deadlines in conjunction with this lawsuit, and that the plaintiff also
should not be able to do so. Defendants KJG and PSK further assert that the court’s
scheduling order does not govern the ongoing site investigation required under the Wisconsin
Administrative Code. Defendants KJG and PSK further contend that ongoing discovery, as
proposed by the plaintiff, would be prejudicial to them.
Rule 16(b)(4) of the Federal Rules of Civil Procedure provides that "[a] schedule may
be modified only for good cause and with the judge's consent." The plaintiff maintains that
-4-

good cause is present in this case because, pursuant to Fed. R. Civ. P. 26(e)(1), parties have
a duty to supplement their document production if incomplete.
The plaintiff has had ample opportunity to conduct discovery. On January 30, 2009,
the court entered a scheduling order establishing a discovery deadline of September 30, 2009.
On April 29, 2009, the scheduling order was amended to extend the discovery until October
30, 2009, and on May 15, 2009, the scheduling order was again amended to extend the
discovery deadline until December 15, 2009. The plaintiff seeks to extend the discovery
deadline once again asserting the parties’ “mutual need” to exchange ongoing environmental
testing. Defendants KJG and PSK continue to perform environmental testing on the site
because they are required to submit the data to the WDNR pursuant to the Wisconsin
Administrative Code. Defendants KJG and PSK assert that they have no intention on using
any environmental testing data obtained after the scheduling order deadlines in this case.
In its May 11, 2010, order denying the plaintiff’s motion to file a second amended
complaint, the court stated:
Contrary to the plaintiff’s assertions, the court already concluded that the
original and amended complaints did not allege the existence of both the 2006
release and historical releases having commingled and traveled to Grace on an
ongoing basis. Rather, the court, reading the amended complaint as a whole,
concluded that it only alleged a cause of action relating to the April 2006 spill.
The plaintiff filed the present motion to file a second amended complaint to
allege the historical contamination from all past releases at the gas station
property as well as an ongoing release from the gas station property.
This case has been pending for over three years, since April 13, 2007.
On September 20, 2007, the plaintiff filed a motion for a preliminary injunction.
The court held an evidentiary hearing over the period of seven days cumulating
on August 4, 2008. On April 7, 2008, the plaintiff filed a motion to present
rebuttal testimony of three witnesses which the court granted in part and denied
in part. The plaintiff presented the allowed rebuttal testimony at the August 4,
2008, continued hearing.
Additionally, during the course of the continued hearings on the
preliminary injunction motion, on January 21, 2008, the plaintiff filed a motion
seeking leave to file an amended complaint, including adding as an additional
defendant, PSK. Although the court denied the motion without prejudice, it
-5-

advised the plaintiff that the motion could be renewed at the request of the
plaintiff. The plaintiff renewed its motion to file an amended complaint on July
20, 2009. On August 8, 2009, the court denied the plaintiff’s motion for a
preliminary injunction and granted the plaintiff’s motion to file an amended
complaint.
The plaintiff’s amended complaint did not include any allegations of
historical contamination or allegations of an ongoing release from the gas station
property. Although the plaintiff originally filed its motion to amend prior to
learning about the alleged ongoing release from the gas station property,
nothing prevented it from submitting a revised amended complaint when it
renewed its motion to file an amended complaint on July 20, 2009. The plaintiff
was aware in March of 2009 that there was an issue with the underground
storage tank records and a probable ongoing release from the gas station
property.
The plaintiff’s new allegations in its proposed second amended complaint
relate to information known to it prior to filing the action (i.e., historical
contamination), letters issued by the WDNR in 2008 and early 2009, information
in expert reports which were due prior to June 1, 2009, an SVE system installed
by the WDNR in 2008, and facts relating to the remediation of the property. All
of which was known prior to the filing of the amended complaint, prior to the date
the plaintiff’s expert reports were due and prior to the close of discovery.
Throughout the pendency of this case the plaintiff has delayed its resolution by
seeking to present new theories of the case, new facts, new witnesses and new
expert opinions after the deadlines for doing so had passed. Accordingly, the
court finds that the plaintiff unduly delayed in filing its motion to file a second
amended complaint. The court also finds that if the plaintiff is allowed to file the
proposed second amended complaint, the defendants will suffer undue
prejudice.
(footnote omitted).
Although the court agrees with the plaintiff that facts of an environmental case are not
static, without some set deadline for discovery, this case would continue ad infinitum. As the
court has previously stated, Fed. R. Civ. P. 26(e), which requires the supplementation of
expert witness reports, does not give a party license to disregard discovery deadlines. Rule
26(e) provides that a party must supplement or correct a disclosure or response “if the party
learns that in some material respect the disclosure or response is incomplete or incorrect.”
Fed. R. Civ. P. 26(e)(1)(A). The rule “‘does not give the producing party a license to disregard
discovery deadlines and to offer new opinions under the guise of the supplement label.’”

-6-

Welch v. Eli Lilly & Co., 2009 U.S. Dist. LEXIS 21417, at 11-12 (S.D. Ind. Mar. 16, 2009)
(citations omitted) (citing cases). The plaintiff has failed to show good cause to amend the
scheduling order to re-open discovery in this case.

Accordingly, the plaintiff’s motion to

amend the scheduling order will be denied.
Addressing the defendants’ motion to strike, the court notes that the amended
scheduling order provides that discovery was permitted to continue without leave of the court
until December 15, 2009,1 and that the plaintiff’s lay and expert disclosures were due June 30,
2009. The defendants maintain that pursuant to Fed. R. Civ. P. 26(a)(2)(B) and Fed. Rule Civ.
P. 37(c), any opinion which is not contained in the expert reports must be stricken from the
record. In addition to asserting that the evidence submitted by the plaintiff violates the
scheduling order, the defendants also assert that some of the affidavits contain inadmissible
hearsay.
In response to defendants KJG and PSK’s motion, the plaintiff maintains that all of its
affidavits comply with Fed. R. Civ. P. 56(c)(1) and (e), as well as the local rules.2 The plaintiff
asserts that the applicable provisions of the federal rules do not require “that facts alleged by
the affiant are constrained by a scheduling order, nor that the person providing the affidavit
be listed as, or disclosed on a witness list.” (Plaintiff Grace Christian Fellowship’s Response

1

Although it does not affect the defendants’ m otion to strike, the court notes that the defendants indicate
that under the court’s am ended scheduling order, discovery was perm itted to continue without leave of court until
Septem ber 30, 2009. That date was established by the court’s February 30, 2009, Am ended Scheduling Order.
The court am ended the scheduling order twice after filing that order. See April 30, 2009, Order (Docket # 131)
and May 15, 2009, Order (Docket 133). Decem ber 15, 2009, is the discovery deadline date established by the
May 15, 2009, Order.
2
The plaintiff also contends that KJG failed to com ply with Civ. L. R. 7(a)(2) (E.D. W is.) and, therefore,
its m otion to strike should be denied. Although the defendants’ m otion was not accom panied by a separate
supporting m em orandum , the m otion itself included the basis for the defendants’ m otion to strike, citing the
supporting facts and law. Thus, the plaintiff had all of the necessary inform ation in order to respond to the
defendants’ m otion. In addition, defendants KJG and PSK stated that they inadvertently did not file a certification
indicating that they would not be filing a m em orandum of law pursuant to Civ. L. R. 7(a)(2). Accordingly, under the
circum stances, a denial of the defendants’ m otion to strike based on a violation of the local rules is not warranted.

-7-

to the Defendants’ Motion to Strike Portions of Plaintiff’s Affidavits [Plaintiff’s Response to
Defendants’ Motion to Strike] at 3). The plaintiff acknowledges that a number of its submitted
affidavits contain sworn testimony regarding environmental testing facts arising after the
December 15, 2009, discovery cutoff.
The plaintiff maintains, however, that the defendants’ expert, Raghu Singh, filed an
affidavit dated September 15, 2010, attaching reports and test data filed with the DNR in
March 2010, also after the discovery cutoff date. The plaintiff asserts that it did not object to
the defendants’ filing and, in fact, referred to the March 2010 reports extensively in its own
briefs. The plaintiff further asserts that joint testing of the new alleyway monitoring wells was
agreed upon by counsel during the summer of 2010 and that “[b]y attacking the Woelfel and
Peshek affidavits which present the results of the August 2010 joint testing, defendants seek
to prevent the Court from considering relevant evidence about the on-going role of the alley
as a contaminant pathway from KJG to Grace.” (Plaintiff’s Response to Defendants’ Motion
to Strike at 6).
In this case, the discovery deadline was December 15, 2009. Thus, any averment that
relates to evidence or observations from after December 15, 2009, will be stricken and not
considered by the court in deciding the pending motions.3 Additionally, any data from after
December 15, 2009, will not be considered. Thus, the affidavits of Chris Peshek and Heidi
Woelfel as well as the attached supporting documents will be stricken. Paragraph six of the
affidavit of Thomas Heine will also be stricken.
The defendants assert that the opinions set forth in the affidavits of Mr. Drought (at
paragraphs 4 and 5) and Dr. Hogan (at paragraphs 8 through 10) must be stricken because
they were signed after the scheduling order deadline for expert reports and subtly expand on
3

This applies to the defendants’ subm issions as well.

-8-

the experts’ opinions or, in some instances, set forth opinions not found anywhere in the
experts’ reports.
Rule 26(a)(2)(B) of the Federal Rules of Civil Procedure provides that expert reports
are required to contain “(i) a complete statement of all opinions the witness will express and
the basis and reasons for them; (ii) the data or other information considered by the witness in
forming them . . ..” Additionally, Fed. Rule Civ. P. 37(c) provides that “[i]f a party fails to
provide information or identify witnesses required by Rule 26(a) or (e), the party is not allowed
to use that information or witnesses to supply evidence on a motion, at a hearing, or at trial,
unless the failure was substantially justified or is harmless.” Thus, if the opinions set forth in
the affidavits of Mr. Drought (at paragraphs 4 and 5) and Dr. Hogan (at paragraphs 8 through
10) are not found anywhere in their respective experts reports, those affidavits must be
stricken.
Paragraphs four and five of Mr. Drought’s affidavit state the following:
4.
Based on my review of the data and my familiarity with the Grace
building, I disagree with Mr. Tuomanen on several key issues. It is my
professional opinion that the gasoline remaining under the floor of Grace and in
the alley continues to pose a threat to Grace.
5.
Based on the August 2009 vapor sampling results, which were collected
during the time when the interim remedial ventilation system was shut down,
elevated levels of volatile organic vapor emissions were measured with the PID
near the floor sumps associated with the system, the associated piping and the
interim footing and sub-slab ventilation systems. These vapors are related to
the gasoline which remains underneath the Grace building.
(Affidavit of James Drought [Drought Aff.], ¶¶ 4,5). Mr. Drought’s expert reports include his
expert report of June 29, 2009, Id.,Exh. A, including the narrative portion of the report, tables
and several figures and his complete report of December 21, 2009, Id., Exh. B, and his letter
of September 17, 2008, to John Hnat at the Wisconsin Department of Natural Resources. Id.,
Exh. C.

-9-

With regard to paragraph four, Mr. Drought’s reports indicate his opinion that, as of the
date of the report(s), the gasoline remaining under the floor of Grace and in the alley poses
a threat to Grace. Additionally, paragraph five restates Mr. Drought’s findings and opinion
contained in his supplemental report of December 21, 2009. Accordingly, the defendants’
motion to strike with respect to Mr. Drought’s affidavit will be denied.
With respect to Dr. Hogan’s affidavit, paragraphs eight through ten state the following:
8.
The contamination I observed in the pipe chase creates a direct pathway
from under the floor into the air space at Grace.
9.
The risk posed by the unremediated gasoline below the floor of Grace is
real, significant and on-going.
10.
Based on research which I have compiled, including the
TOXICOLOGICAL PROFILE FOR BENZENE by the Agency for Toxic
Substances and Disease Registry (2007), I have concluded that the carcinogen
benzene, an immunogenic agent, can cause genetic mutations.
(Affidavit of Theodore Hogan [Hogan Aff.], ¶¶ 8-10).
Dr. Hogan wrote expert reports including a report dated February 16, 2008, and a report
entitled “Third Addendum Report” dated June 26, 2009. Id., Exhs. A and B. With regard to
paragraph eight, it does not appear that Dr. Hogan supplemented his expert reports after the
August 27, 2009, air tests conducted in the basement of the Grace building by Shaw
Environmental. Thus, he cannot expand his expert opinion to include an opinion that the
contamination observed in the pipe chase that day creates a direct pathway from under the
floor to the air space at Grace. With regard to paragraph nine, Dr. Hogan’s reports indicate
his belief that the unremediated gasoline below the floor of Grace poses a risk of harm to
Grace’s occupants. He can aver that it poses a harm and that the harm is significant, but not
that the harm is on-going. With regard to paragraph ten, the court cannot locate anywhere in
Dr. Hogan’s reports where he offers the opinion that benzene can cause genetic mutations.

- 10 -

Accordingly, paragraphs eight and ten of the Dr. Hogan’s affidavit will be stricken. In addition,
the word “on-going” in paragraph nine also will be stricken.
Judy Gavin states in paragraph six of her affidavit that “the teachers will often contact
me to investigate when they have noticed a petroleum odor in the building.” (Affidavit of Judi
Gavin [Gavin Aff.]). The plaintiff indicates that the statement is not a statement made for the
purposes of proving the facts asserted. As such, it is governed by an exception to the hearsay
rule and will not be stricken.
Finally, defendants’ KJG and PSK assert that the plaintiff’s counsel inappropriately
attempts to introduce evidence into the record about which she has no personal knowledge
by attaching numerous documents to her October 13, 2010, affidavit. The documents at issue
are expert reports, letters, and other scientific data. The defendants maintain that the
documents are inadmissible hearsay under Rules 801 of the Federal Rules of Evidence
because the documents contain out of court statements offered in evidence to prove the truth
of the matter asserted. In response the plaintiff asserts that the documents are admissible
because they are already part of the record in this case.
Rule 56(c)(4) of the Federal Rules of Civil Procedure states:
An affidavit or declaration used to support or oppose a motion must be made on
personal knowledge, set out facts that would be admissible in evidence, and
show that the affiant or declarant is competent to testify on the matters stated.
The defendants agree that plaintiff’s counsel may submit, through her affidavit, deposition or
hearing testimony that was given under oath. Counsel may also submit documents or
excerpts of documents introduced and admitted into evidence at the preliminary hearing. It
appears that most of the documents the plaintiff’s counsel submitted with her own affidavit also
were submitted by the affidavit of the respective expert, marked and admitted into evidence
at the preliminary injunction hearing or they are sections of the Wisconsin Administrative Code
- 11 -

which do not have to be submitted by affidavit. Accordingly, only three documents submitted
by the plaintiff’s counsel’s affidavit, the documents at Tab B, C and R, will be stricken.4
In sum, the plaintiff has failed to show good cause to amend the scheduling order and,
therefore, the plaintiff’s motion to amend the scheduling order will be denied. Furthermore,
any averment that relates to evidence or observations from after December 15, 2009, will be
stricken from the affidavits submitted by either the plaintiff or the defendants and not
considered by the court in deciding the pending motions. Thus, the affidavits of Chris Peshek
and Heidi Woelfel and paragraph six of the affidavit of Thomas Heine will be stricken.
Additionally, paragraphs eight and ten and the word “on-going’ in paragraph nine of Dr.
Hogan’s affidavit and documents at Tab B, C and R of Ms. Schaefer’s October 13, 2010,
affidavit will be stricken. Accordingly, defendant KJG and PSK’s motion to strike will be
granted in part and denied in part.
CONCLUSION
NOW, THEREFORE, IT IS ORDERED that the plaintiff’s motion to amend/correct the
scheduling order be and hereby is denied. (Docket #277).
IT IS FURTHER ORDERED that defendants KJG and PSK’s motion to strike be and
hereby is denied in part and granted in part as stated herein. (Docket #273)
Dated at Milwaukee, Wisconsin this 4th day of August, 2011.
BY THE COURT:
s/ Patricia J. Gorence
PATRICIA J. GORENCE
United States Magistrate Judge

4

Although the plaintiff asserts that the docum ent at Tab R is a public record, it is not. See Fed. R. Evid.

803(8).
O:\CIV\Grace Christain strike.wpd

- 12 -

August 4, 2011