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Swindell Dressler v. Travelers Casualty and Surety Company

October 31, 2011

SWINDELL DRESSLER INTERNATIONAL COMPANY, PLAINTIFF,
v.
TRAVELERS CASUALTY AND SURETY COMPANY AND THE TRAVELERS INDEMNITY COMPANY, DEFENDANTS.



The opinion of the court was delivered by: Judge Nora Barry Fischer

MEMORANDUM ORDER

AND NOW, this 31st day of October, 2011, upon consideration of Plaintiff‟s Motion to Strike Affidavit of Howard E. Fitts and Motion for a Spoliation Inference as a Result of Travelers‟ Destruction of Relevant Underwriting Documents (Docket No. 36), Defendant the Travelers Indemnity Company‟s Response to Plaintiff‟s Motion to Strike Affidavit of Howard E. Fitts (Docket No. 45), Defendant the Travelers Indemnity Company‟s Response to Plaintiff‟s Motion for a Spoliation Inference as a Result of Travelers‟ Destruction of Relevant Underwriting Documents (Docket No. 46), Defendant the Travelers Indemnity Company‟s Supplemental Response to Plaintiff‟s Motion for a Spoliation Inference as a Result of Travelers‟ Destruction of Relevant Underwriting Documents (Docket No. 57), Plaintiff‟s Reply Brief in Further Support of Its Motions to Strike the Affidavit of Howard E. Fitts and for a Spoliation Inference (Docket No. 59), the June 21, 2011 Oral Argument thereon as well as the transcript of said argument (Docket No. 77), the Court rules as follows.

I. Motion to Strike the Affidavit of Howard E. Fitts:

A. Overview of Arguments:

As part of a dispute concerning the production of documents, Defendants produced the Affidavit of Howard E. Fitts. (see May 3, 2011 Hearing Memo at Docket No. 28). Said Affidavit provides, in relevant part, that Mr. Fitts is employed as a Second Vice President of Operations and Systems, Document Management Unit and is responsible for maintaining complete and accurate copies of commercial lines policies issued by Defendants. (Docket No. 36-1). Mr. Fitts has been employed by Defendants since 1959 and has had commercial lines document management responsibilities since 1987. Id. Mr. Fitts is put forth as an authorized representative for Defendants and given his duties, responsibilities and experience, he is familiar with how Defendants maintain business records, including insurance policies and underwriting documents. Id. In his Affidavit, Mr. Fitts affirms that as part of Defendants‟ document retention program (prior to 2006), Defendants maintained the underlying documents of a policyholder (designated as a National Account) for ten (10) years after completion of the activities referenced in the policyholder‟s account file. Id. Thereafter, Defendants‟ document retention program called for the destruction of the underwriting documents associated with that National Account policyholder. Id.

The Pullman Inc.*fn1 account was designated as a National Account and said account was closed when the last Travelers policy issued to Pullman, Inc. expired on July 1, 1979. Id. Accordingly, Mr. Fitts states that the underwriting documents associated with the policies thatDefendants issued to Pullman, Inc. were "likely destroyed" between July 1989 and July 1990, as part of Defendants‟ document retention program. Id. Said likely destruction was confirmed by the fact that Defendants were unable to locate any such underwriting documents, after a reasonable and diligent search. Id. Mr. Fitts further attests that he has personal knowledge of the facts, matters and statements set forth within his Affidavit and that he signs and affirms under the penalties of perjury that his statements are true and accurate to the best of his knowledge. Id.

In light of the content of the Fitts‟ Affidavit, Plaintiff argues that it is legally insufficient under Rule 56(c)(4)*fn2 because it is not based upon personal knowledge, does not set out facts that would be admissible in evidence and does not demonstrate that the Affiant is competent to testify on the matters stated therein. (Docket No. 36). In turn, Defendants argue that the Affidavit of Mr. Fitts adheres to the requirements of the Rule. (Docket No. 45, pg. 3). Specifically, Mr. Fitts swore under the penalties of perjury that the statements contained in his Affidavit were true and accurate to the best of his knowledge, which Defendants argue, satisfies the personal knowledge requirement. Id. Mr. Fitts has personal knowledge of and is intimately familiar with how Defendants maintain business records, including underwriting documents. Id. Further, the statement that the documents were "likely destroyed", does not indicate or constitute a lack of personal knowledge. Id. Defendants refer to Affiant Fitts‟ statements as averments and note that Plaintiff contends that the statements are opinions. (Docket No. 45, pg. 4). Defendants note that "belief" is the requisite knowledge requirement when opinion evidence is at issue. Id. Therefore, Defendants assert that if considered opinion testimony, the statements would still be admissible. Id.

B. Legal Standard and Discussion:

Following a thorough search of the rules, case law and treatises, the Court has been unable to locate a recognized standard to which an affidavit must adhere, during the discovery phase of a case.*fn3 Indeed, there is very little guidance in pertinent case law and legal treatises. On the other hand, there is ample case law concerning the standard to which an affidavit must adhere in Summary Judgment proceedings, in accordance with Federal Rule of Civil Procedure 56(c)(4).*fn4 However, Federal Rule of Civil Procedure 34(b) pertaining to the production of documents does not require verification. This leaves the Court in a quandary concerning the standard to which an affidavit must adhere, during the discovery phase of a case.

The Court notes that Affiant Howard E. Fitts may not only qualify as a fact witness, but may also potentially qualify as a lay opinion witness, pursuant to Federal Rule of Evidence 701, which permits a lay witness, who is not testifying as an expert, to offer testimony in the form of an opinion or inference. Fed. R.Evid. 701. In addition, it is possible that the Affidavit of Howard E. Fitts may potentially be used as evidence of Defendants‟ routine business practice. See Fed. R.Evid. 406, 803 and 902. See also, e.g. Envirex, Inc. v. Ecological Recovery Associates, Inc., et al., 454 F.Supp. 1329, 1333 (M.D.Pa. 1978) ("Evidence of the routine practice of an organization, whether corroborated or not, is relevant to prove that the conduct of the organization in a particular occasion was in conformity with the routine practice"); AMERICAN

JURISPRUDENCE PROOF OF FACTS;SECOND SERIES, 35 POF 2d 589 ¶ ¶ 1-11 (1983).

Furthermore, Defendants assert that the underwriting documents at issue were destroyed between July 1989 and July 1990, in the normal course of business, pursuant to a legitimatedocument retention policy. (Docket No. 46, pgs. 4-6). However, the Court has not been provided with a copy of same. Nor has the Plaintiff taken a 30(b)(6) deposition directed to Defendants‟ document control and retention. To that end, Affiant Fitts may be designated to respond. In that event, the Court notes that "it is unnecessary that the identification witness have personal knowledge of the actual creation of the document. [.] The absence or extent of personal knowledge regarding preparation of a business record affects the weight rather than the admissibility of the evidence." U.S. v. Page, 544 F.2d 982, 987 (8th Cir. 1976); see also U.S. v. Ortiz, 182 F.Supp.2d 443, 451 (E.D.Pa. 2000)(quoting 5 WEINSTEIN'S FEDERAL EVIDENCE § 803.11[11], at 803--62) (noting that the qualified witness must have familiarity with the record-keeping system, but that the "witness need not have personal knowledge of the actual creation of the document")).

C. Conclusion:

Given that this case is only in the discovery stage, the Court is of the opinion that Plaintiff‟s Motion to Strike Affidavit of Howard E. Fitts [36] should be denied, without prejudice. Instead, Plaintiff should proceed to depose Affiant Howard E. Fitts, no later than December 1, 2011, after which time Plaintiff may renew its Motion to Strike Affidavit of Howard E. Fitts, if the record warrants such Motion.

II.Motion for a Spoliation Inference as a Result of Travelers' Destruction of Relevant ...


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