ATVs and the FRCP: Two Reasons To Use Due Care

A recent case, Liberty Ins. Co. v. Brodeur, serves as a reminder to take care when making disclosures under Federal Rules of Civil Procedure 26.

Rule 26 governs these disclosures. It requires parties to provide information regarding witnesses, documents, damages, and other information without awaiting a discovery request. There are dire consequences if a party fails to make the required initial disclosures, including—under Rule 37—being precluded from offering witnesses or other evidence of trial.

The recent case of Liberty Ins. Co. v. Brodeur illustrates the potential consequences that failure to comply with initial discovery requirements can have on the outcome of a case. It serves as a reminder that attorneys should always take care when making these disclosures.

The dispute in Brodeur arose from an unfortunate ATV accident at the Brodeur family cabin. As a result, Brodeurs’ family friend sustained serious injuries to his arm. The friend sued the Brodeurs for his injuries in Nevada state court. The Brodeurs sought coverage under their Liberty homeowner’s insurance policy. Liberty filed a separate action in federal court seeking a judicial declaration that none of the Liberty policies provided coverage for the Brodeurs’ claim. Specifically, Liberty argued that the policy did not cover the claim under the “general exclusion” provision.

This “general exclusion” provision had an exception, however. The general exclusion did not apply if the Brodeurs could demonstrate (1) that the ATV was not subject to motor vehicle registration requirements and (2) that the ATV was used to “service” the cabin.

Before trial, the Brodeurs served Liberty with their initial disclosures pursuant to Rule 26. These disclosures named Jerry Brodeur as an “individual likely to have discoverable information” and that Jerry was likely to have information about “the claims of the underlying case and the damages at issue.”

Jerry was the only witness at the federal bench trial, which was held years after initial disclosures were made. Jerry testified about the ATV use (that it was used to remove wood, as a snowplow, to move dirt, and to pick up food in town) and whether the ATV was registered or required to be registered.

On the first day of trial, Liberty moved for judgment under Rule 52(c), arguing that the Brodeurs’ Rule 26 disclosures were insufficient to put Liberty on notice of Jerry’s anticipated testimony and thus, the testimony concerning the ATV should be barred.

The district court agreed with Liberty. The court excluded much of Jerry’s testimony under Rule 26 and Rule 37. The court reasoned that because the Brodeur disclosure specified the “underlying case,” Jerry was limited to testifying only about the underlying state court lawsuit—not about material facts at issue in the federal lawsuit (i.e., how the ATV was used and if the ATV was subject to motor vehicle registration). The court then found that Rule 37(c)(1) sanctions could be used to exclude portions of Jerry’s testimony that exceeded this limitation.

Without this testimony, the district court found that the Brodeurs failed to present sufficient evidence to show the ATV’s use at the cabin was covered by their Liberty policy. The court further found that since the Brodeurs failed to meet this burden, it did not need to resolve whether the ATV was subject to motor vehicle registration in any jurisdiction. Accordingly, the court found that there was no evidence to show that the exception to the “general exclusion” applies. As a result, the court found for Liberty.

The Ninth Circuit Court of Appeals reversed. It found that the district court abused its discretion by imposing Rule 37(c)(1) sanctions to exclude Jerry’s testimony. The Ninth Circuit emphasized that the Brodeurs’ disclosures properly identified Jerry as witness under Rule 26. Moreover, even if the disclosures were inadequate, the district court abused its discretion by imposing Rule 37(c)(1) sanctions without considering whether defects in the disclosures were harmless or substantially justified. Finally, the district court abused its discretion by failing to adequately analyze whether the Brodeurs purported noncompliance with Rule 26 involved willfulness or fault.

While it does not appear that the Ninth Circuit had to really wrestle with this appeal and clearly reached the right decision, the case is nevertheless a good reminder to practitioners to refrain from simply “mailing it in” when making Rule 26 disclosures. Practitioners should always pay attention to what is specified when disclosing “the subjects of that [discoverable] information” in order to steer clear of the (albeit unlikely and extreme) scenario that occurred here. Simply put, care and attention to detail at the beginning of your case will deprive opposing counsel grounds for making arguments later that can have an impact on your case at trial.