Hartford Fire Ins. v. Sambrano (In Re Sambrano)
440 B.R. 702
Bankr. W.D. Tex.2010Background
- Hartford filed an adversary proceeding against Debtor, alleging discharge and dischargeability issues related to bonded SamCorp funds and Hartford's payment and performance bonds.
- Hartford's January 6, 2010 Rule 26 initial disclosures did not list witnesses by name or supply subject matter; no damages computations were provided.
- On October 6, 2010 Hartford disclosed three witnesses (Jason Rae, David Taylor, Stacey Moynihan) not named in initial disclosures.
- Defendant moved to exclude these witnesses and certain damages evidence and exhibits listed in Hartford's proposed pre-trial order as outside initial disclosures.
- Hartford argued Rae and Taylor were Hartford agents/retained experts and Moynihan was an employee; Hartford also argued damages and late-disclosed exhibits were permissible.
- The court granted the motion in part and denied in part, allowing Taylor and Rae as fact witnesses, excluding Moynihan, and admitting certain late-disclosed exhibits and damages evidence.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Hartford's late witness disclosures are harmless or warrant exclusion | Rae and Taylor were disclosed via October 6 email or were Hartford agents; Moynihan was Hartford employee disclosed earlier. | Initial disclosures were inadequate; late disclosures prejudice Sambrano and discovery closed; Mayo cannot testify. | Rae permitted as fact witness; Moynihan excluded; Taylor permitted as fact witness |
| Whether Hartford's damages disclosures violated Rule 26(a) and 26(e) | Initial disclosures described damage categories; detailed computations were provided in Hartford's proof of claim; no prejudice since documents were available. | Initial disclosures failed to provide computations for each damages category; late supplementation prejudices defendant. | Hartford may present damages evidence; failure to provide initial computations was cured by the April 2009 proof of claim |
| Whether late-disclosed exhibits should be admitted | Exhibits related to SamCorp's corporate affairs or tax returns were already in Hartford's possession or produced by Defendant; supplementation timely in relation to availability | Some documents were not in existence or possession at initial disclosures; late disclosure risks prejudice | Indemnity agreement and Defendant's tax returns admitted; other corporate documents and financial records admitted or limited based on timeliness and prejudice |
| Whether the court should exclude the late-disclosed Moynihan testimony for prejudice or allow it with cure | Moynihan was a Hartford employee; defendant could not adequately prepare due to late disclosure | Discovery closed; testimony would prejudice the defense; no continuance requested | Moynihan testimony excluded; Rae testimony allowed with limitations |
| Overall coordination of sanctions under Rule 37(c) for Rule 26 violations | Sanctions should not bar trial; partial sanctions are sufficient | Stricter sanctions necessary to deter noncompliance | Partial sanctions imposed: Rae allowed; Moynihan excluded; damages and certain late exhibits admitted |
Key Cases Cited
- Primrose Operating Co. v. Nat'l Am. Ins. Co., 382 F.3d 546 (5th Cir. 2004) (harmlessness factors for Rule 37(c) sanctions)
- Design Strategy, Inc. v. Davis, 469 F.3d 284 (2d Cir. 2006) (Rule 26(a) damages computations requirement)
- CQ, Inc. v. TXU Mining Co., 565 F.3d 268 (5th Cir. 2009) (disclosures must include computations for damages categories)
- Re Reed v. Iowa Marine and Repair Corp., 16 F.3d 82 (5th Cir. 1994) (pretrial disclosure and surprise concerns)
- Magna Transp., Inc. v. Magna Transp. (A&M Research Found.), 338 F.3d 394 (5th Cir. 2003) (harmlessness factors for late witness disclosures)