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Lightstyles, Ltd. v. Marvin Lumber and Cedar Co.

United States District Court, M.D. Pennsylvania

December 9, 2014

LIGHTSTYLES, LTD., by and through its bankruptcy trustee, LEON P. HALLER, Plaintiff
v.
MARVIN LUMBER AND CEDAR COMPANY, d/b/a MARVIN WINDOWS AND DOORS, Defendant

MEMORANDUM

WILLIAM W. CALDWELL, District Judge.

I. Introduction

Plaintiff, Leon P. Haller, as the trustee in bankruptcy for LightStyles, LTD ("LightStyles"), filed this lawsuit alleging several causes of action based on the decision of defendant, Marvin Lumber and Cedar Company, /d/b/a Marvin Windows and Doors ("Marvin"), to terminate its business relationship with LightStyles. LightStyles was formerly a distributor for Marvin and asserts that Marvin's decision forced it into bankruptcy. Marvin has counterclaimed against LightStyles and has sued Robert Slagle, LightStyles' principal, as a third-party defendant. Marvin claims that LightStyles and Slagle fraudulently induced it to continue the business relationship and that Slagle made false statements about Marvin to LightStyles' customers in the period before the business relationship ended. Marvin says that a part of the fraud involved the misuse of LightStyles' account receivable from Marvin Window & Door Showplace ("Showplace"), a customer of LightStyles that was owned by Slagle.

We are considering Marvin's motion to compel responses to its two sets of Requests for Admission (RFAs), one set sent to LightStyles and the other to Slagle. LightStyles admitted some of the RFAs and responded to others by way of objection and answer. Slagle responded by way of objection and answer. Marvin contends the responses are inadequate. As relief, it seeks an order stating that the requests have been admitted.

II. Discussion

A. Relevant Law

Fed. R. Civ. P. 36 governs requests for admission. In relevant part, Rule 36(a)(1)(A), permits a party to serve upon another party "a written request to admit... facts, the application of law to fact, or opinions about either...." The responding party can admit the request but if it "is not admitted, the answer must specifically deny it or state in detail why the answering party cannot truthfully admit or deny it." Rule 36(a)(4). "A denial must fairly respond to the substance of the matter; and when good faith requires that a party qualify an answer or deny only a part of a matter, the answer must specify the part admitted and qualify or deny the rest." Id. "Generally, the use of only the word denied' is sufficient to comply with the rule." Bisker v. GGS Info. Services, Inc., No. 07-CV-1465, 2009 WL 3241675, at *2 (M.D. Pa. Oct. 1, 2009)(Caldwell, J.)(citing United Coal Companies v. Powell Constr. Co., 839 F.2d 958, 967 (3d Cir. 1988)). A party can respond to a request by asserting it can neither admit nor deny it, but if it does so, it must be based upon a "lack of knowledge or information" and "only if the party states that it has made reasonable inquiry and that the information it knows or can readily obtain is insufficient to enable it to admit or deny." Rule 36(a)(4). A party may also object to the request but must state the grounds for doing so. Rule 36(a)(5).

If a party responds to a request by asserting it can neither admit nor deny it, Rule 36(a)(4) indicates that in making the response, the party may quote the language of the Rule and assert a lack of knowledge after having "made reasonable inquiry and [concluding] that the information it knows or can readily obtain is insufficient to enable it to admit or deny." Thus, a response that fails to include the language that a "reasonable inquiry" was made is deficient. See Panara v. Hertz Penske Truck Leasing, Inc., 122 F.R.D. 14, 17 (E.D. Pa. 1988). However, the courts also require more than just a recitation of the Rule's language. See, e.g., Asea, Inc. v. Southern Pacific Transp. Co., 669 F.2d 1242, 1246-47 (9th Cir. 1981). The answering party must also explain in some detail why the request cannot be affirmed or denied. Moeck v. Pleasant Valley Sch. Dist., No. 13-CV-1305, 2014 WL 4446730, at *3 (M.D. Pa. Sept. 10, 2014)(quoting Philadelphia Gear Corp. v. Techniweld, Inc., 1992 WL 99622, at *2 (E. D. Pa. May 1, 1992)).

Rule 36 is intended "to narrow the issues for trial, or even altogether obviate the need for trial." Langer v. Monarch Life Ins. Co., 966 F.2d 786, 803 (3d Cir. 1992). The requesting party "may not present... a broad and non-specific request for admissions of facts.'" Illes v. Beaven, No. 12-CV-395, 2013 WL 522075, at *4 (M.D. Pa. Feb. 11, 2013)(Caldwell, J.)(quoting McCarthy v. Darman, No. 07-3958, 2008 WL 2468694, at *2 (E.D. Pa. June 17, 2008)). Instead, a request should "be in simple and concise terms in order that it can be denied or admitted with an absolute minimum of explanation or qualification.'" Id. (quoting United Coal Companies, supra, 839 F.2d at 967-68 (quoted case omitted)). "To compel answers to vague and indefinite questions capable of more than one interpretation and which require an explanation thwarts the purposes of Rule 36(a).'" Moeck, supra, 2014 WL 4446730, at *4 (quoted case omitted). Requests reciting compound factual assertions are improper. Caruso v. Coleman Co., 1995 WL 347003, at *6 (E.D. Pa. June 7, 1995), and so are requests relating to a pure matter of law. Kutner Buick, Inc. v. Crum & Foster Corp., 1995 WL 508175, at *2 (E.D. Pa. Aug. 24, 1995).

B. The Requests Directed to LightStyles

Marvin served LightStyles with thirty requests for admission. LightStyles admitted requests 5-6, and 19-20, and made a qualified admission to request 28, leaving twenty-five requests that were disputed. After review of each request and the objections and responses, we can group some requests together in addressing defendant Marvin's motion.

1. RFAs 1 Through 4

Requests No. 1 through 4 are as follows:

ADMISSION NO. 1: Admit that LightStyles did not enter into a written distribution agreement with Marvin at any time.
ADMISSION NO. 2: Admit that LightStyles did not enter into a written franchise agreement with Marvin at any time.
ADMISSION NO. 3: Admit that LightStyles did not pay any money to Marvin to become a distributor of Marvin products.
ADMISSION NO. 4: Admit that LightStyles did not pay a franchise fee to Marvin at any time.

(Doc. 140-1, ECF p. 3). LightStyles objected to each of these requests on the grounds that they were vague and ambiguous. It also responded to each request by a simple denial. (Doc. 140-1, ECF pp. 17-18).

In moving to compel answers to these requests, Marvin contends in part that an objection that they are vague and ambiguous is an attempt to obfuscate what should be a straightforward admission or denial. (Doc. 139, ECF p. 23).

We agree. The requests are simple and concise factual assertions that LightStyles could have admitted or denied. They are not vague or ambiguous. LightStyles did also deny the requests, and a simple denial is generally sufficient, but a denial must fairly respond to the substance of a request. Here, the requests go to elemental factual issues relating to the parties' business relationship; indeed, in its opposition brief, LightStyles admitted request no. 1. (Doc. 144, ECF p. 2 n.1). It went on to qualify that admission, but that qualification should have occurred in its response to the request, not in a brief opposing the requesting party's motion to compel a proper response. LightStyles will be permitted to file amended answers to these requests. If LightStyles denies the requests, it shall explain the denial. A simple denial will not do here.

2. RFAs 7 Through 11

Requests No. 7 through 11 deal with several financial statements that LightStyles provided Marvin from time to time and whether those statements reflected a write off of LightStyles' account receivable from Showplace. Requests No. 7 through 11 are as follows:

ADMISSION NO. 7: Admit that the financial statements dated November 30, 2008 that LightStyles provided to Marvin did not reflect a write off of the LightStyles account receivable from Showplace. (MW000862-867)
ADMISSION NO. 8: Admit that the financial statements dated June 30, 2010 that LightStyles provided to Marvin did not reflect a write off of the LightStyles account receivable from Showplace. (MW047893-896)
ADMISSION NO. 9: Admit that the financial statements dated November 30, 2010 that LightStyles provided to Marvin did not reflect a write off of the LightStyles account receivable from Showplace. (MW102410-413)
ADMISSION NO. 10: Admit that the financial statements dated December 31, 2010 that LightStyles provided to Marvin did not reflect a write off of the LightStyles account receivable from Showplace. (MW001287-291) ADMISSION NO. 11: Admit that the financial statements dated April 30, 2011 that LightStyles provided to Marvin did not reflect a write off of the LightStyles account receivable from Showplace. (MW04827-030)

(Doc. 140-1, ECF pp. 3-4). LightStyles objected to each of these requests on the grounds that they were vague and ambiguous. (Doc. 140-1, ECF pp. 19-20). It also objected to requests no. 8 through 11 on the ground that the requests "called for expert opinion and analysis." ( Id. ). Additionally, it responded to all the requests that it could not admit or deny them "based on its review" of the financial statements referred to in each request. ( Id. ).

In moving to compel, Marvin argues that LightStyles cannot assert vagueness or ambiguity in these requests because Marvin parenthetically cited the relevant financial documents by Bates number and because it included in its Requests For Admission a definitions section defining various terms and entities used in the requests. Marvin also argues that the "cannot admit or deny" responses on the basis of "its [LightStyles'] review" and the "expert opinion and analysis" responses were inadequate because Trustee Haller (who signed the responses) could not rely on his lack of personal knowledge but had to do "due diligence" before responding. (Doc. 139, ECF p. 24). That due diligence should have included talking to Slagle and to Phil Stoltzfus, LightStyles' former controller.

In opposing Marvin on these requests, LightStyles does not address Marvin's argument on vagueness or ambiguity except to say that the definitions section has no bearing on any vagueness or ambiguity in the requests. LightStyles also argues that its "cannot admit or deny" response was proper because it is no longer in business and it could only consult with Slagle or Stoltzfus. It did consult with these individuals and its responses were based on that consultation. (Doc. 144, ECF p. 13, citing Doc. 144-1 ΒΆ 8, the declaration of Douglas J. Rovens, Plaintiffs' attorney). It also contends that Marvin's argument that LightStyles had to say in its response that it had made a "reasonable inquiry" (an apparent reference to Marvin's due diligence argument) would "elevate form over substance." (Doc. 144, ECF p. 14).

In regard to LightStyles' vague-and-ambiguous objection, we agree with LightStyles' point on the definitions section of the Requests For Admission.[1] However, we disagree that its vague-and-ambiguous objection is valid in regard to these requests; we note that LightStyles did not support its objection in its brief by way of an argument bearing directly on the phrasing of these requests.

We also agree with Marvin that LightStyles "cannot admit or deny" responses were inadequate. LightStyles argues that requiring it to say in its responses that it had made a "reasonable inquiry" would "elevate form over substance." But this is exactly what Rule 36(a)(4) requires. The party must assert in its responses that it has "made reasonable inquiry" if it is going to say that it can neither admit nor deny. Moreover, the answering party must also explain in some detail in its responses why the request cannot be affirmed or denied. It is not sufficient to explain its inquiry in a brief opposing a motion to compel ...


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