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Rigby v. Corliss

United States District Court, W.D. Washington, Seattle

June 27, 2018

JAMES F. RIGBY, Trustee of Michael R. Mastro, Plaintiff,
MICHAEL J. CORLISS, et al., Defendants.


          Robert S. Lasnik United States District Judge

         This matter comes before the Court on the “Defendant's Motions in Limine.” Dkt. # 18. Plaintiff is the trustee in an involuntary bankruptcy proceeding involving Michael R. Mastro. The trustee accuses defendant Michael J. Corliss of assisting Mastro in secreting assets and leaving the district, causing the trustee to incur additional expenses to locate both the debtor and the assets. This matter will be decided in a bench trial scheduled to begin on July 9, 2018. Corliss seeks to exclude from trial seven categories of evidence.

         1. Mastros' Invocation of the Fifth Amendment

         The Court takes this matter under advisement. The parties agree that the imputation of a non-party's invocation of the Fifth Amendment to a party requires an evaluation of the relationship between the two people (including its nature, the degree of control the party has over the non-party, the compatibility of their interests in the litigation, and the role the non-party played in the events giving rise to the litigation) in order to determine whether the Mastros acted out of loyalty to Corliss. The Court will be in a better position to judge whether the Mastros' invocation of the Fifth Amendment in response to the trustee's questions gives rise to an adverse inference against Corliss after the record is more fully developed at trial.

         2. Gloria Plischke Letters to Mastro

         Corliss seeks to exclude from evidence two handwritten letters written by Mastro to his sister, Gloria Plischke, regarding his wishes for disbursement of a portion of the inheritance Mastro received from another sister. The trustee argues that the letters are not being offered for the truth of the matters asserted therein, but rather to show the effect the letters had on Plischke, particularly why she sent two checks to a corporation owned by Corliss on April 11, 2011. The trustee also identifies three potentially applicable exceptions to the hearsay rule: the state of mind exception, the business records exception, and the statement against interest exception. While the Court has doubts regarding the applicability of the business records and statement against interest exceptions, the letters appear to be admissible for non-hearsay purposes and/or as a statement of Mastro's state of mind at the time the letters were written. When the letters were written is a contested issue of fact, however. To the extent Mastro intended to make an assertion of fact when he dated the letters and/or referenced the date of the first letter in the second, those statements are hearsay, and the trustee has not identified an applicable exception. Fed. R. Ev. 801(a). The Court will not, therefore, rely on those “statements” for the truth of the date on which the letters were written.

         3. Documents Filed in Bankruptcy Court

         Corliss objects to the admission of certain documents filed in the bankruptcy court, including United States Bankruptcy Judge Mark Barreca's orders, on hearsay grounds. While the Court may take judicial notice that a document was filed and the contents of that record, unless the doctrines of claim or issue preclusion applies, the statements contained therein are not proof of the matters asserted. U.S. v. Stinson, 647 F.3d 1196, 1210-11 (9th Cir. 2011). The trustee offers no theory under which Judge Barreca's finding that certain gold bars, jewelry, and other property were assets of the bankruptcy estate is legally operative in its own right. Rather, the trustee wants to use Judge Barreca's statements as proof of ownership. The orders are not admissible for that purpose.

         4. Documents Disclosed After the Discovery Deadline

         The trustee produced two documents that he intends to use as trial exhibits nine months after the discovery deadline set by the bankruptcy court. The trustee asserts that the documents were previously disclosed, but the evidence he cites has nothing to do with the two documents to which Corliss objects. The trustee also suggests, without actually stating, that the failure to disclose was substantially justified because there was a colorable claim of privilege and the documents were the subject of a then-pending motion to compel. If the Court understands the trustee's argument correctly, it is unpersuasive. The trustee produced the two documents before the Court ruled on the motion to compel. Any claim of privilege was seemingly too insubstantial to wait for the Court's decision, and the trustee has not otherwise shown that the failure to disclose was substantially justified. Unless the trustee can show, prior to offering these documents at trial, that the failure to disclose during discovery was substantially justified and/or harmless, the documents are inadmissible.

         5. Witnesses Disclosed After the Discovery Deadline

         Federal Rule of Civil Procedure 26(a)(1)(A)(i) requires litigants to disclose the name, address, and telephone number “of each individual likely to have discoverable information-along with the subjects of that information-that the disclosing party may use to support its claims or defenses, unless the use would be solely for impeachment.” The fact that the trustee identified pages of names in response to a discovery request seeking the identity of persons with knowledge of particular investigative activities did not alter the fact that Corliss had no idea whose testimony the trustee intended to rely upon at trial until long after discovery had closed. The trustee was required to identify each person he intended to use to support his claims at the beginning of the litigation and to supplement that list as discovery revealed additional witnesses he may call as witnesses. He did not, and has not shown that the failure was substantially justified or harmless. The trustee will not be permitted to call Kara King, David Gebben, or Eugene Becker as witnesses in his case in chief at trial.[1]

         The trustee may call Michael and Lauri Corliss as witnesses. The harms at which Rule 26(a) is aimed, namely an inability to inquire as to a witnesses knowledge and test the veracity of their statements through discovery, do not apply when the undisclosed witness is the defendant and spouse with whom he shares a community of interests.

         6. Expert Report and ...

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