United States District Court, W.D. Kentucky, Louisville
GEORGE A. GRAYIEL PLAINTIFF
AIO HOLDINGS, LLC,. DEFENDANTS
MEMORANDUM OPINION AND ORDER
B. RUSSELL, SENIOR JUDGE UNITED STATES DISTRICT COURT
matter is before the Court on Defendants AIO Holdings, LLC
(“AIO”), Samir Anastas, and Gregory Anastas's
(collectively, “Defendants”) Motion to Strike
Portions of Plaintiff George A. Grayiel's Witness List.
[R. 106.] Grayiel responded, [R. 109], and Defendants
replied, [R. 112]. Fully briefed, this matter is ripe for
adjudication. For the reasons stated herein, Defendants'
Motion to Strike, [R. 106], is DENIED.
factual allegations, as set out in the First Amended
Complaint, [R. 86], assert a tangled web of fraud perpetuated
by Defendants. [See R. 86 at 3-20 (First Amended
Complaint).] Defendants disagree with this characterization.
According to Grayiel, from January 2000 through December 2001
Martin Twist convinced him to invest nearly $900, 000 in a
natural gas endeavor. [Id. at 3-4.] Grayiel claims
that Twist lied to him when Twist promised that investing in
his natural gas well ventures was safe and would yield a high
return. [Id. at 4.] Allegedly, Twist used business
entities, such as AIO Holdings, LLC and Blue Light of
Kentucky LLC, along with the continuing help of the other
named defendants, Samir Anastas, Gregory Anastas, and
Sarinprapa Teema, to divert investments, including
Grayiel's investment, to Twist and the defendants for
their personal use. [Id.]
to the matter at hand is the testimony of two witnesses,
Jerry M. Layne, Sr. and Todd Pilcher. According to Grayiel,
Layne is the owner of a portion of the land that produced the
gas for Twist's ventures and he was party to discussions
concerning the ownership of that property with Teema and
Samir Anastas. [See R. 86 at 16-17, ¶ 93; R. 92
at 4 (Grayiel's Witness List).] Grayiel states that
Pilcher was an employee of Twist and committed fraudulent
actions involving AIO Holdings, LLC. [See R. 86 at
20, FN 14; R. 92 at 4.] In the witness list filed by Grayiel
on August 29, 2017, Grayiel failed to list the contact
information for Layne or Pilcher. [R. 92 at 4.] Defendants
argue that these omissions violate the Court's scheduling
orders, and now move to prohibit Layne and Pilcher from
testifying and prohibit Grayiel from amending his witness
list. [R. 106-1 at 1 (Memorandum in Support of Motion to
to Federal Rule of Civil Procedure (“FRCP”)
37(c)(1), Defendants urge the Court to preclude Pilcher and
Layne from testifying due to Grayiel's failure to list
their contact information on his witness list. [R. 106-1 at
1.] Defendants also argue that Grayiel should be prohibited
from adding to or amending his witness list.
sets forth a general framework to regulate pretrial
discovery. Of particular importance in this dispute is Rule
26(a)(3)(A)(i), which mandates that a party must provide to
the other parties “the name and, if not previously
provided, the address and telephone number of each
witness--separately identifying those the party expects to
present and those it may call if the need arises . .
..” Fed.R.Civ.P. 26(a)(3)(A)(i). Rule 37 dovetails with
this requirement: If a litigant “fails to provide
information or identify a witness as required by Rule 26(a)
or (e), the [litigant] is not allowed to use that information
or witness to supply evidence on a motion . . . or at a
trial, unless the failure was substantially justified or is
harmless.” Fed.R.Civ.P. 37(c)(1). Exclusion “of
late or undisclosed evidence is the usual remedy for
noncompliance with Rule 26(a) or (e).” Howe v. City
of Akron, 801 F.3d 718, 747 (6th Cir. 2015). But that is
not always the case, as the Rule gives the Court “the
option to order alternative sanctions ‘instead of'
exclusion of the late or undisclosed evidence ‘on
motion and after giving an opportunity to be
heard.'” Id. (quoting Fed.R.Civ.P.
37(c)(1)); see also 8B Charles Alan Wright et al.,
Federal Practice and Procedure §
2289.1 (3d ed.), Westlaw (database updated Apr. 2017).
Grayiel may avoid sanction if “there is a reasonable
explanation of why Rule 26 was not complied with or the
mistake was harmless.” Bessemer & Lake Erie
R.R. Co. v. Seaway Marine Transp., 596 F.3d 357, 370
(6th Cir. 2010) (quoting Vance ex rel. Hammons v. United
States, 182 F.3d 920, 1999 WL 455435, at *6 (6th Cir.
1999) (unpublished table decision)). To assess whether a
litigant's belated disclosure is “substantially
justified” or “harmless, ” courts in this
Circuit look to five factors:
(1) the surprise to the party against whom the evidence would
be offered; (2) the ability of that party to cure the
surprise; (3) the extent to which allowing the evidence would
disrupt the trial; (4) the importance of the evidence; and
(5) the nondisclosing party's explanation for its failure
to disclose the evidence.
Howe, 801 F.3d at 748 (quoting Russell v.
Absolute Collection Servs., Inc., 763 F.3d 385, 396-97
(4th Cir. 2014)); see also Abrams v. Nucor Steel Marion,
Inc., 694 F. App'x 974, 2017 WL 2297486, at *6 (6th
Cir. 2017). These factors simply lend themselves “to
the task at the heart of Rule 37(c)(1): separating
‘honest, ' harmless mistakes from the type of
‘underhanded gamesmanship' that warrants the harsh
remedy of exclusion.” Bentley v. Highlands Hosp.
Corp., No. CV 15-97-ART-EBA, 2016 WL 5867496, at *10
(E.D. Ky. Oct. 6, 2016) (quoting Howe, 801 F.3d at
Motion to Strike Witnesses: Howe Five Factor
the Howe Test weighs in favor of Grayiel. First,
Defendants do not seem to be surprised about the possibility
of Layne or Pilcher testifying. In fact, Grayiel states that
Defendants have been on notice about the two witnesses for
months. [R. 109 at 7 (Grayiel Response).] In response,
Defendants argue that their cognizance of a witness
“does not absolve Plaintiff from compliance with the
Court's order.” [R. 112 at 5 (Defendants Reply).]
Furthermore, Defendants claim that it is still not clear what
information or evidence these two witnesses will bring
against them. [Id. at 6.] Unlike most other cases
where a party attempts to add a new witness at the eleventh
hour, Defendants were made aware of these two witnesses in
Grayiel's witness list from August of 2017, [R. 92].
See Boegh v. United States, No. 5:08-CV-150-R, 2010
WL 4286150 (W.D. Ky. Oct. 22, 2010) (allowing the late
addition of a witness as a harmless error); Consumer Fin.
Prot. Bureau v. Borders & Borders, PLC, No.
3:13-CV-1047-CRS, 2016 WL 9460472 (W.D. Ky. June 29, 2016)
(striking the disclosure of 561 named consumers, seven of
which provided statements, when the disclosure was tardy and
the movant previously maintained that consumer harm was
irrelevant to its theory of the case). Therefore, the issue
of surprise weighs in favor of Grayiel.
even if Defendants are surprised, there is enough time to
cure this issue. As suggested by Grayiel, the Court could
modify the closing of the discovery period for the purpose of
allowing the parties to depose Pilcher and Layne. See,
e.g., Boegh, 2010 WL 4286150, at *1 (allowing the
nonmovant to depose a witness that was not disclosed during
the discovery period); United States v. Nugent, No.
5:16-CV-380-JMH, 2017 WL 4249775, at *5 (E.D. Ky. Sept. 25,
2017) (allowing ...