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State Farm Mutual Automobile Insurance Co. v. Cordua

March 29, 2010

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, ET AL., PLAINTIFFS,
v.
PETER J. CORDUA, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Tucker, J.

MEMORANDUM AND ORDER

Presently before this Court is Plaintiffs' Motion to Compel Defendant D'Amico to Amend his Answers to Plaintiffs' Second Set of Requests for Admissions (Doc. 73) and the Response in Opposition thereto filed by Defendants D'Amico and United Cut Rate Store, Inc. (Doc. 77). For the reasons stated below, the Court grants Plaintiffs' Motion in part.

BACKGROUND

The facts giving rise to the Complaint are as follows. On September 20, 2002, Plaintiffs initiated a civil action (hereinafter "the Underlying Claim") against parties not named in the present Complaint for allegedly participating in a scheme to defraud Plaintiffs by, inter alia, submitting fraudulent medical reports, medical bills and other documents to obtain improper insurance payments from Plaintiffs. On March 30, 2006, judgment was entered against all of the defendants in the Underlying Claim.

Plaintiffs allege that during the litigation of the Underlying Claim, they obtained copies of bank records of the defendants in the Underlying Claim, which revealed that several checks ranging in amount from $10,275 to $570,222 had been cashed by United Cut Rate Store, Inc., a business owned by Defendant D'Amico. Plaintiffs also aver that they learned that Defendant Cordua owns an accounting practice, Cordua and Company, P.C., which provided financial services to the parties in the Underlying Claim. Plaintiffs allege that Defendants fraudulently conveyed monies to the defendants in the Underlying Claim and conspired with those defendants to conceal their assets by cashing checks make out to fictitious third parties to supply the defendants in the Underlying Claim with large sums of cash.

On February 6, 2007, Plaintiffs filed a Complaint (Doc. 1) against Defendants D'Amico, United Cut Rate Store, Inc. and Cordua for allegedly assisting, aiding and/or facilitating the transfer of assets of the defendants in the Underlying Claim in an effort to keep funds out of the reach of their creditors, including Plaintiffs.*fn1

Defendants generally deny Plaintiffs' allegations. Defendant D'Amico claims that he does not know what the bank records reflect as he does not serve as the custodian of such information for the defendants from the Underlying Claim. He also claims he did not engage in illegal conduct, but, rather, he operated his business as a licensed check cashier and collected appropriate and allowable fees in compliance with the Pennsylvania's Check Cashier Licensing Act, 63 P.S. § 2301, et seq. Defendant Cordua denies that the check funds were divided between him and any other parties and that there was any intent to defraud any creditors.

The case has been in the discovery phase since it was initiated back in 2007.*fn2 On November 4, 2008, Plaintiffs sent Defendant D'Amico its Second Set of Requests for Admissions. The list of 22 admissions asked Defendant to admit whether he or United Cut Rate Store, Inc. "utilized" various First Union Bank accounts. All of the requests for admissions followed the same format: "It is admitted that First Union Bank account #[account number provided] is a bank account utilized by [Martin D'Amico or United Cut Rate Store, Inc.]."

On December 2, 2008, Defendant D'Amico responded to Plaintiff's requests for admissions. Defendant D'Amico admitted six of the twenty-two requests and denied the remaining sixteen requests. Wherever Defendant D'Amico responded "Denied", he included one of the following statements: "Denied. This is a corporate account and not Defendant, Martin D'Amico's personal account."; "Denied. This is not a First Union Bank Account."; "Denied. This is not Defendant, Martin D'Amico's personal account."; or "Denied. This is not a corporate account of United Cut Rate Store, Inc."

On July 15, 2009, Plaintiffs filed a Motion to Compel Defendant D'Amico (Doc. 73) to either (1) amend his Answers to Plaintiffs' Second Set of Requests for Admissions or (2) have the admissions deemed admitted pursuant to Federal Rule of Civil Procedure 36 ("Rule36"). On July 30, 2009, Defendants filed a Response in Opposition thereto (Doc. 77). The Court now addresses this pending motion.

APPLICABLE LAW

Rule 36 allows a party to "serve upon any other party a written request to admit... the truth of any matters within the scope of Rule 26(b)(1)" relating to, inter alia, "facts, the application of law to fact, or opinions about either." Fed. R. Civ. P. 36(a). "The purpose of Rule 36(a) is to narrow the issues for trial to those which are genuinely contested." United Coal Companies v. Powell Constr. Co., 839 F.2d 958, 967 (3d Cir. 1988). "If a matter is not admitted, the answer must specifically deny it or state in detail why the answering party cannot truthfully admit or deny it." Fed. R. Civ. P. 36(a)(4). "Where... issues in dispute are requested to be admitted, a denial is a perfectly reasonable response." Id. "However, qualifications are permitted when good faith requires that a party qualify an answer." Caruso v. Coleman Co., No. 93-CV-6733, 1995 WL 347003, at *2 (E.D. Pa. June 07, 1995) (citing Fed. R. Civ. P. 36(a)). See also Fed. R. Civ. P. 36(a)(4) ("a denial must fairly respond to the substance of the matter").

"Once a party has answered a request, the requesting party may seek a judicial determination of the sufficiency of the answers." Williamson v. Corr. Med. Servs., No. 06-379-SLR, 2009 WL 1364350, at *2 (D. Del. May 14, 2009). "In evaluating the sufficiency of the answers, the court should consider: (1) whether the denial fairly meets the substance of the request; (2) whether good faith requires that the denial be qualified; and (3) whether any 'qualification' which has been supplied is a good faith qualification." Id. (internal citations omitted). In addition, the court should "consider the phraseology of the requests as carefully as that of the answers or objections." United States v. Chevron U.S.A. Inc., No. 88-6681, 1989 WL 100927, at *1 (E.D. Pa. Aug. 30, 1989). Courts should not, however, "allow the responding party to make hair-splitting distinctions that frustrate the purpose of the Request." United States v. Lorenzo, No. 89-6933, 1990 WL 83388, at *1 (E.D. Pa.1990). With respect to the request for admission, regardless of its subject matter, "the statement... should be in simple and concise terms [so] that it can be denied or admitted with an absolute minimum of explanation or qualification." Chevron U.S.A. Inc., 1989 WL 100927, at *2. With respect to the response to the request for admission, an answer will be deemed insufficient if it appears "to be non-specific, evasive, ...


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