Engineered Floors, LLC v. Beaulieu of America, Inc.

CourtUnited States Bankruptcy Court, N.D. Georgia
DecidedOctober 31, 2022
Docket18-04031
StatusUnknown

This text of Engineered Floors, LLC v. Beaulieu of America, Inc. (Engineered Floors, LLC v. Beaulieu of America, Inc.) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, N.D. Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Engineered Floors, LLC v. Beaulieu of America, Inc., (Ga. 2022).

Opinion

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Date: October 31, 2022 Loh Barbara Ellis-Monro U.S. Bankruptcy Court Judge

UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF GEORGIA ROME DIVISION IN RE: BEAULIEU GROUP, LLC et al., ! CASE NO. 17-41677-BEM Debtors. CHAPTER 11 ENGINEERED FLOORS, LLC, : Plaintiff, ADVERSARY PROCEEDING NO. v. 18-403 1-BEM BEAULIEU OF AMERICA, INC., et al., : Defendant. ORDER This matter is before the Court on Plaintiff Engineered Floors, LLC’s (“EF”) Motion to Determine Sufficiency of Answers and Objections to Requests for Admission and for Attorneys’ Fees (the “Motion”). [Doc. 197]. Defendant Lakeshore Equipment Company

(“Lakeshore”) filed a response, and EF filed a reply. [Docs. 199, 205]. The Motion is now ripe for determination. I. Background The background of this case is set forth in this Court’s order on motions for summary judgment (the “Summary Judgment Order”) and will not be repeated here. [Doc. 136 at

2-4]. At issue in this case are three categories of carpet and related product defect claims as follows: Bucket 1: carpet manufactured and sold by Debtors; Bucket 2: carpet manufactured in whole or part by Debtors and sold by EF; Bucket 3: carpet manufactured and sold by EF. In the Summary Judgment Order, the Court found that EF is not liable for Bucket 1 claims, but is not immune from liability for Bucket 2 and Bucket 3 claims. Shortly after entering the Summary Judgment Order, the Court entered a separate order granting Lakeshore’s motion to sever and dismissing all of EF’s claims against Lakeshore and all of Lakeshore’s counterclaims for lack of jurisdiction. The Court also denied all pending motions as moot (the “Severance Order”). [Doc. 138]. Both the Summary Judgment Order and the Severance Order were appealed to the

District Court. Although the District Court considered the appeals separately, it issued one order for both appeals. [Docs. 170, 171]. The District Court affirmed the Summary Judgment Order, and that decision—including the issue of whether EF is liable for Bucket 2 claims—is currently pending on appeal in the Eleventh Circuit Court of Appeals. [Doc. 173]. With respect to the Severance Order, the District Court reversed the dismissal of EF’s claim for contempt against Lakeshore (Count 9 of the amended complaint) and remanded for further proceedings. [Doc. 171]. That ruling was also appealed to the Eleventh Circuit, but the appeal was dismissed for lack of jurisdiction. [Docs. 182, 194]. These rulings put EF’s contempt claim back before this Court, and the Court reopened discovery on a limited basis. [Doc. 195]. EF’s Motion seeks a ruling that certain requests for admission (“RFA”) that it served on Lakeshore be deemed admitted because Lakeshore’s responses to those RFAs were incorrect, insufficient, and evasive. EF also seeks an award of attorneys’ fees. In response, Lakeshore contends that its responses were sufficient at the time they were provided, that it has now amended its responses rendering moot any issues with the original responses, and that attorney

fees are not appropriate because the Court has not ruled on its objections to the RFAs and EF has not shown the RFAs are of substantial importance to the contempt claim. II. Applicable Law Requests for admission are governed by Federal Rule of Civil Procedure 36, made applicable here by Federal Rule of Bankruptcy Procedure 7036. Rule 36 provides in relevant part as follows: (a) Scope and Procedure. (1) Scope. A party may serve on any other party a written request to admit, for purposes of the pending action only, the truth of any matters within the scope of Rule 26(b)(1) relating to: (A) facts, the application of law to fact, or opinions about either[.] … (4) Answer. 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. 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. The answering party may assert lack of knowledge or information as a reason for failing to admit or deny 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. … (6) Motion Regarding the Sufficiency of an Answer or Objection. The requesting party may move to determine the sufficiency of an answer or objection. Unless the court finds an objection justified, it must order that an answer be served. On finding that an answer does not comply with this rule, the court may order either that the matter is admitted or that an amended answer be served. The court may defer its final decision until a pretrial conference or a specified time before trial. Rule 37(a)(5) applies to an award of expenses. Fed. R. Civ. P. 36(a). A party who has responded to an RFA must timely supplement its responses “if the party learns that in some material respect the disclosure or response is incomplete or incorrect, and if the additional or corrective information has not otherwise been made known to the other parties during the discovery process or in writing[.]” Fed. R. Civ. P. 26(e)(1)(A); Fed. R. Bankr. P. 7026. Therefore, to determine whether to grant EF’s request that the RFAs at issue be

deemed admitted, the Court first must consider any objections raised by Lakeshore.1 If there are no justified objections, then the Court must consider whether the responses, as amended, are sufficient. A failure to admit a fact that the proponent of the RFAs contends is undisputed is not a basis for granting a motion under Rule 36(a)(6). Interland, Inc. v. Bunting, No. 1:04-CV- 444-ODE, 2005 WL 2414990, at *9 (N.D. Ga. Mar. 31, 2005) (“Rule 36 only requires an admission, denial, or objection. Defendant has complied. The accuracy of its responses will be determined at trial.”). However, it can be a basis for sanctions under Rule 37(c) in the absence of good reasons for the failure to admit. Fed. R. Civ. P. 36, Advisory Committee Note to 1970

Amendments. When the responding party provides a qualified answer, the Court should “balance the right of a party to qualify responses when necessary against the requirement that responses meet the substance of the request.” United States ex rel. Bibby v. Mortg. Invs. Corp., 323 F.R.D. 424, 430 (N.D. Ga. 2017). To do so, the Court should consider whether the substance of the qualification “had been put in issue by the request itself or whether instead the qualification injected argument where none was called for. … Where an issue had been raised in the request, a

1 Lakeshore’s original responses to the RFAs were prefaced with a number of general objections, which will not be considered. “Rule 36 is clear that objections to requests should be addressed to the specific matter. This ‘global guard tactic’ is improper and the Court will ignore the objections unless they are specifically asserted in response to a request.” Interland, Inc. v. Bunting, No. 1:04-CV-444-ODE, 2005 WL 2414990, at *9 (N.D. Ga. Mar. 31, 2005) (citing Henry v. Champlain Enter., Inc., 212 F.R.D. 73, 80 (N.D.N.Y. 2003)); see also United States ex rel.

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