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Smith v. CSAA Fire and Casualty Insurance Co.

United States District Court, W.D. Oklahoma

September 24, 2019

SEAN SMITH and CRYSTAL SMITH, Plaintiffs,
v.
CSAA FIRE AND CASUALTY INSURANCE COMPANY, Defendant.

          ORDER

          TIMOTHY D. DEGIUSTI, CHIEF UNITED STATES DISTRICT JUDGE

         CSAA Fire and Casualty Insurance Company (the “Defendant”) filed a Motion for Partial Summary Judgment and Supporting Brief. Doc. No. 48. Plaintiffs Sean and Crystal Smith (the “Plaintiffs”) have filed a Response [Doc. No. 53] to which Defendant has replied [Doc. No. 57]. Defendant filed a Motion to Strike Exhibit 2 from Plaintiffs’ Response. Doc. No. 61. Pursuant to Rule 56, the Motion to Strike Exhibit 2, along with all accompanying briefs, will be considered as an objection to Exhibit 2 in Plaintiffs’ Response [Doc. No. 53] and addressed as part of the Court’s ruling on summary judgment.

         BACKGROUND

         This case arises from an insurance claim for damages to Plaintiffs’ home. Plaintiffs’ First Amended Complaint, Doc. No. 19 at 1, ¶ 2. Plaintiffs allege the damage was caused by an earthquake on November 7, 2016. Id. at 1, ¶ 3. Defendant denied Plaintiffs’ insurance claim, concluding that the damage was instead caused by poor construction and soil changes. Response to Motion to Strike Exhibit 2, Doc. No. 61 at 3. Plaintiffs brought this action alleging breach of contract and bad faith. See First Amended Complaint.

         Defendant argues in its motion that it is entitled to judgment on Plaintiffs’ bad faith claim and request for punitive damages, as Plaintiffs present no genuine dispute as to any material fact. Id. at 1. Plaintiffs respond that their bad faith claim is not barred. Response at 5 n.1. Plaintiffs state that Defendant failed to inspect the damage Plaintiffs complained of from the outset. Id. at 5. Plaintiffs further state that there are disputed facts as to whether Defendant disregarded guidance from the Oklahoma Insurance Department and whether Defendant has a practice of hiring engineers to aid in the underpayment of claims. Id. at 9, 12. As part of their Response, Plaintiffs included Exhibit 2, a photograph depicting structural damage to their home. Plaintiffs’ Response and Objection to Defendant’s Motion for Partial Summary Judgment. Doc. No. 53, Ex-2. Defendant subsequently filed a Motion to Strike Exhibit 2. Doc. No. 59. The Court, in a previous Order [Doc. No. 67], denied that Motion and, pursuant to Rule 56, agreed to consider all filings related to the Motion to Strike as an objection herein.

         STANDARD OF DECISION

         Summary judgment is proper “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); Universal Underwriters Ins. Co. v. Winton, 818 F.3d 1103, 1105 (10th Cir. 2016). “An issue is ‘genuine’ if there is sufficient evidence on each side so that a rational trier of fact could resolve the issue either way, ” and “[a]n issue of fact is ‘material’ if under the substantive law it is essential to the proper disposition of the claim.” Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 670 (10th Cir. 1998) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).

         The Court’s inquiry must be whether the evidence, when viewed “through the prism of the substantive evidentiary burden, ” Anderson, 477 U.S. at 254, “presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.” Id. at 251–52. Although the Court views all facts in the light most favorable to the nonmoving party at the summary judgment stage, “there is no issue for trial unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party.” Id. at 249.

         DISCUSSION

         The Court will first address Defendant’s objection to Exhibit 2 in Plaintiffs’ Response. Next the Court will turn to Defendant’s Partial Motion for Summary Judgment.

         I. The Court will consider Exhibit 2 in ruling on summary judgment, over Defendant’s objection.

         Defendant filed a Motion to Strike Exhibit 2 from Plaintiffs’ Response to CSAA’s Motion for Partial Summary Judgment. Doc. No. 59. The Court now considers the substance of that Motion, Plaintiffs’ Response to the Motion to Strike [Doc. No. 61], and Defendant’s Reply [Doc. No. 63].

         Exhibit 2 includes a photograph depicting what Plaintiffs assert are broken floor joists located beneath Plaintiffs’ living room. Response to Motion to Strike at 4. Defendant asserts that Plaintiffs failed to timely produce Exhibit 2, rather presenting it for the first time to Defendant’s expert during a deposition. Doc. No. 59 at 1–3. Plaintiffs respond that Defendant cannot both have conducted a thorough inspection of their home and be unfairly surprised by Exhibit 2. Any surprise, Plaintiffs respond, is the direct result of tactical decisions made by Defendant. Response to Motion to Strike at 5. Next Defendant asserts that Plaintiffs failed to lay a proper foundation for Exhibit 2, omitting from their brief any mention of who took the photograph, when it was taken, or where it was taken. Motion to Strike at 1. Plaintiffs note that the proper focus of the inquiry as to the photograph’s foundation-at this stage in the proceedings-is whether Exhibit 2 could eventually be reduced to admissible evidence at trial. Response to Motion to Strike at 13. The Court will consider these arguments in turn.

         a. Plaintiffs’ untimely disclosure of Exhibit 2 was harmless.

         Defendant first claims Plaintiffs’ failure to timely disclose the photograph at issue should preclude Plaintiffs from now introducing it as Exhibit 2. Motion to Strike at 4. On February 16, 2018, Defendant issued a discovery request, asking Plaintiffs to produce “all photographs or videos that depict, to any degree, ” damage attributed to the incident giving rise to the insurance claim. Id. at 1. Exhibit 2 was taken on September 10, 2018, by Sean Wiley (“Wiley”), Plaintiffs’ rebuttal expert. Response to Motion to Strike at 14. Plaintiffs’ deposed Defendant’s expert witness David Battle (“Battle”) on November 2, 2018. During the deposition Plaintiffs showed Battle the picture now labeled as Exhibit 2. Motion to Strike at 3. Exhibit 2 was subsequently produced to Defendant, less than a month after Exhibit 2 was taken, but after Battle was deposed. Id . According to the Scheduling Order, discovery was to be completed by January 8, 2019. Doc. No. 29 at 2.

         Supplemental disclosures under Fed. R. Civ. P 26 are a one-way street: the producing party has the burden to timely supplement disclosures, once the party is aware that the initial responses or disclosures are materially incomplete. See Fed. R. Civ. P. 26(e)(1)(A). The receiving party is left with little recourse to challenge the sufficiency of a supplemental disclosure and is often limited to challenging supplemental filings as untimely. See Rule 37(c)(1).

         “The determination of whether a [Rule 26] violation is justified or harmless is entrusted to the broad discretion of the district court.” Woodworker’s Supply, Inc. v. Principal Mut. Life Ins. Co., 170 F.3d 985, 993 (10th Cir. 1999). The Court “need not make explicit findings concerning the existence of a substantial justification or the harmlessness of a failure to disclose.” Id. The following factors, however, “should guide its discretion: (1) the prejudice or surprise to the party against whom the testimony is offered; (2) the ability of the party to cure the prejudice; (3) the extent to which introducing such testimony would disrupt the trial; and, (4) the moving party’s bad faith or willfulness.” Id.

         Plaintiffs’ use of Exhibit 2 during Battle’s deposition-before Plaintiffs produced the photograph to Defendant-is troubling. The Court agrees with Plaintiffs that producing a photograph a month after it was taken by an expert, who subsequently had to prepare a report, is not, per se, an unreasonable delay. The photograph was produced before the discovery deadline. But the fact that Plaintiffs were sufficiently prepared to present the photograph to Battle during his deposition, before disclosing the ...


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