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Acf Western Usa, Inc v. Travelers Casualty Insurance Company of America

November 16, 2012


The opinion of the court was delivered by: Barbara A. McAuliffe United States Magistrate Judge


Currently before the Court is Travelers Casualty Insurance Company of America's ("Defendant") motion for monetary and evidentiary sanctions against ACF Western USA, Inc. ("Plaintiff"). Plaintiff filed their opposition on November 13, 2012.*fn1 (Doc. 28-30.) Defendant filed their reply brief on November 14, 2012. (Doc. 32.) The Court heard oral arguments on November 16, 2012. (Doc. 33.) Counsel Harout Keosian appeared telephonically for Plaintiff.

Id. Counsel Alishan Jadhavji appeared in person for Defendant. Id. Having considered the moving, opposition and reply papers, the declarations and exhibits attached thereto, arguments presented at the November 16, 2012 hearing, as well as the Court's file, the Court issues the following order.


This case involves an insurance coverage dispute concerning the cause of damage to Plaintiff's Fresno, California facility. On or about July 14, 2010, Plaintiff's Fresno property sustained significant damage when its roof collapsed. (Pl.'s Compl., ¶ 11, Doc. 1, Ex. 1.) During the coverage evaluation, Defendant retained a structural engineer to analyze the cause of the loss. (Pl.'s Compl., ¶¶ 13-16.) Relying on Defendant's retained engineer's report, Defendant denied Plaintiff's claim, stating the loss was not covered under the subject insurance policy. (Pl.'s Compl., ¶ 17.) Plaintiff argues that Defendant's reliance on its retained engineer was improper, in bad faith, and further, ignored Plaintiff's "counter reports or investigative data."*fn2

(Pl.'s Compl., ¶ 18.)


A. Procedural Background

On December 15, 2011, Plaintiff filed their complaint in the Superior Court for the State of California, County of Fresno. (Doc. 1, Ex. 1.) Plaintiff alleges claims for breach of contract, breach of the duty of good faith and fair dealing, and for violations of Business and Professions Code § 17200 et seq. Id. On February 8, 2012, Defendant removed the action to this Court pursuant to 28 U.S.C. §§ 1332 and 1441. (Doc. 1.) The parties subsequently consented to the jurisdiction of the assigned United States Magistrate Judge, and this case was reassigned for all purposes to the Honorable Barbara A. McAuliffe on May 16, 2012. (Doc. 18.)

On May 16, 2012, the Court entered a scheduling order in this action.*fn3 (Doc. 19.) The parties were to disclose their experts no later than September 4, 2012. Id. Additionally, the parties were to complete expert discovery by November 1, 2012. Id. On August 31, 2012, the Court granted the parties' request to continue the expert disclosure deadline from September 4, 2012 to September 28, 2012. (Doc. 21.) The Court additionally continued the supplemental expert witness disclosure deadline to October 12, 2012. Id. At this time, the Court noted that "[n]o other dates will be continued and the trial and pretrial dates are confirmed." (Doc. 21, 1: 3.) On October 11, 2012, in response to the parties' second request for relief from the scheduling order, the Court continued the deadline to complete expert discovery to November 14, 2012.*fn4

(Doc. 24.)

B. Defendant's Motion for Sanctions

Defendant's motion requests the Court impose two sanctions pursuant to Fed. R. Civ. P 30(d)(2) and 37(d)(3). First, Defendant seeks exclusionary sanctions precluding expert testimony by Plaintiff's expert, Mark Markarian, because Plaintiff failed to properly disclose Mr. Markarian under Rule 26(b)(2). Second, Defendant seeks monetary sanctions because Plaintiff unilaterally terminated the deposition of Mr. Markarian.

1. Defendant's Motion for Exclusionary Sanctions

Defendant argues Plaintiff did not serve their Rule 26(b)(2) expert disclosures until October 11, 2012.*fn5 (Declaration of Alishan Jadhavji, ¶ 8, Doc. 25, Attach. 1, Ex. 4.) Accordingly, Defendant argues, Plaintiff's Rule 26 disclosures "were a full thirteen (13) days past the extended expert-witness cutoff date." (Def.'s Mot. For Sanctions, Doc. 25, 3: 22-24) (emphasis in original.) Defendant additionally argues the disclosures they received merely included the names of three expert witnesses and two curriculum vitae's, however, did not include any expert reports or any other additional information. (Def.'s Mot. For Sanctions, Doc. 25, 3: 24-27; 4: 1-2.)

Plaintiff responds Mr. Markarian's expert report was provided to Defendant on three occasions. Plaintiff first provided Mr. Markarian's report on January 11, 2011, during the claims process and before the commencement of this litigation. (Pl.'s Opp., 4: 17-19, Doc. 30.) Plaintiff next provided Mr. Markarian's report onJuly 13, 2012 during the regular course of discovery. (Pl.'s Opp., 4: 19-21, Doc. 30.) Plaintiff provided Mr. Markarian's report for a third time on October 11, 2012 as part of Plaintiff's Rule 26 disclosures. (Pl.'s Opp., 4: 21-22, Doc. 30.) Regarding Plaintiff's Rule 26 disclosures, Plaintiff states that Defendant orally agreed to a two-week extension to disclose experts. (Declaration of Mel Melkonian, ¶ 6, Doc. 30, Attach. 2.) Thus, Plaintiff argues, Plaintiff's Rule 26 designation was within the deadline orally agreed to by the parties.

2. Defendant's Motion for Monetary Sanctions

On September 25, 2012, Defendant issued a subpoena duces tecum under Fed. R. Civ. P. 45 to Mr. Markarian for his deposition to be conducted on October 15, 2012. (Jadhavji Decl., ¶ 4, Ex. 3.) The parties subsequently agreed to continue Mr. Markarian's deposition to October 29, 2012. (Jadhavji Decl., ¶ 5.)

At the outset of the deposition, Defendant's counsel indicated that he was not deposing Mr. Markarian as an expert because Defendant's counsel believed Mr. Markarian was not properly disclosed pursuant to Rule 26, thus, precluded from providing expert testimony. (Dep. Tr. of Mark Markarian, 6: 5-22, Oct. 29, 2012, Doc. 25, Attach. 1.) Plaintiff's counsel responded that because Mr. Markarian was being deposed as a percipient witness, rather than as an expert, he was terminating the deposition. (Markarian Dep. Tr. 9: 5-19.)

Accordingly, Defendant contends Plaintiff improperly terminated the deposition, and has moved for the fees and costs related thereto as a sanction. (Def.'s Mot. For Sanctions, 4-7, Doc. 25.) Plaintiff responds that "attempting to depose Mr. Markarian as a mere percipient witness while having him testify as to the contents of expert opinions, which he produced in his capacity as a structural ...

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