Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_10-cv-01042/USCOURTS-azd-2_10-cv-01042-1/pdf.json

Nature of Suit Code: 370
Nature of Suit: Other Fraud
Cause of Action: 28:1332 Diversity-Fraud

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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Museum Associates, Ltd., a Washington 

corporation and Richard Berger, an 

individual, 

Plaintiffs, 

vs. 

Gary Midzor, an individual; Chris Ivey, an 

individual; GM Property Development, 

LLC, an Arizona limited liability 

corporation; Tina Choate, an individual; 

Brian Meyers, an individual; Goldstone 

Management, LLC, an Arizona limited 

liability corporation; Craig Ramsell, an 

individual; Kailasa Enterprises, LLC, an 

Arizona limited liability corporation; and 

Dirck’s Moving Services, Inc, an Arizona 

corporation, 

Defendants.

No. CV 10-01042-PHX-NVW

ORDER 

Before the Court is Defendant Craig Ramsell’s and Defendant Kailasa Enterprises, 

LLC’s “Motion to Strike Plaintiffs’ Personal Injury Claims” (Doc. 206). For the reasons 

stated below, the motion will be granted. 

I. BACKGROUND 

In this action, Plaintiffs allege that they were swindled out of a highly valuable 

collection of gems and fossils. Plaintiffs named as defendants, among others, Ramsell 

and the limited liability company he manages, Kailasa Enterprises (collectively 

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“Ramsell” for purposes of this order). Ramsell owns and operates the Sedona warehouse 

where Plaintiffs temporarily stored the collection, and from which the collection was 

allegedly stolen. Plaintiffs’ first amended complaint accuses Ramsell of negligently 

inflicting emotional distress on Berger “by failing to take adequate care to ensure that the 

Collection . . . did not wrongfully leave [Ramsell’s] warehouse.” (Doc. 71 ¶ 125.) 

Plaintiffs further allege that “[t]he negligence was a cause of emotional distress to 

Mr. Berger and the emotional distress resulted in physical injury and illness to 

Mr. Berger.” (Id. ¶ 129.) 

Plaintiffs exchanged their Fed. R. Civ. P. 26(a)(1) disclosures on October 22, 

2010. As part of those disclosures, they were required to: first, include “a copy — or a 

description by category and location — of all documents, electronically stored 

information, and tangible things that the disclosing party has in its possession, custody, or 

control and may use to support its claims or defenses”; second, state “a computation of 

each category of damages claimed”; and third, “make available for inspection and 

copying . . . the documents or other evidentiary material, unless privileged or protected 

from disclosure, on which each [damages] computation is based, including materials 

bearing on the nature and extent of injuries suffered.” Fed. R. Civ. P. 26(a)(1)(A)(ii)–

(iii). Plaintiffs’ Rule 26(a)(1) disclosures included no documents related to Berger’s 

emotional damages claim, nor did it offer to make such documents available. Its 

computation of damages stated, in its entirety: “Plaintiff reserves the right to supplement 

because damages are ongoing in this matter. However, at this time, Plaintiffs’ damages 

are in excess of two million dollars.” (Doc. 206-1 at 7.) 

Following exchange of initial disclosures, Plaintiffs were under a continuing 

obligation to “supplement or correct its disclosure[s] * * * in a timely manner if [it 

learned] 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). Between October 22, 2010 (the date of the initial disclosures) and 

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September 12, 2011, Plaintiffs supplemented their disclosures five times. None of these 

supplements disclosed or made available documents relevant to Berger’s emotional 

damages, nor did the supplements expand upon the original damages estimate. 

On Friday, September 23, 2011, Ramsell’s deadline for disclosing an expert 

passed. The following Monday, Plaintiffs supplemented their disclosures for a sixth 

time. (Doc. 206-4.) This latest supplement contained medical records generated from 

certain visits by Berger to one or more doctors for anxiety and other symptoms 

purportedly related to the stress of losing his collection. Plaintiffs did not update their 

damages calculation. 

On October 25, 2011, Plaintiffs again supplemented their Rule 26(a) disclosures, 

this time disclosing a document titled “Richard Berger Health Expenses.” (Doc. 206-5 at 

14.)1

 The document has the appearance of a report generated by a finance-tracking 

program. It lists 27 instances of incurring medical expenses — in April, May, June, July, 

August, September, October, and December 2010; and January, March, April, May, June, 

August, and September 2011. Plaintiffs did not update their damages calculation. 

II. ANALYSIS 

Ramsell now moves to strike the emotional damages evidence as prejudicially 

untimely disclosed. The Court treats this as a motion brought under Fed. R. Civ. P. 

37(c)(1): “If a party fails to provide information . . . as required by Rule 26(a) or (e), the 

party is not allowed to use that information . . . to supply evidence on a motion, at a 

hearing, or at a trial, unless the failure was substantially justified or is harmless.” 

Plaintiffs did not “provide information” about Berger’s emotional damages “as 

required by Rule 26(a) or (e).” The various documents eventually disclosed show that 

 1

 Ramsell characterizes this supplement as occurring “just two business days after

Defendants’ deadline to serve discovery requests passed.” (Doc. 206 at 3 (emphasis in 

original).) However, according to the Revised Scheduling Order entered on June 13, 

2011 (Doc. 155), the deadline for serving fact discovery requests was November 22, 2011 

(45 days before the January 6, 2012 fact discovery deadline, see id. at 2). 

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Berger was incurring expenses (and generating documents) related to his alleged 

emotional distress as early as April 2010 and almost monthly thereafter. Plaintiffs 

therefore failed to make proper Rule 26(a)(1) disclosures (which were exchanged six 

months after April 2010) and they failed their Rule 26(e) obligation to timely supplement 

their previous disclosures. 

Plaintiffs have offered no explanation for their untimely disclosures, nor is any 

explanation evident from the record. Therefore, Plaintiffs’ failure was not “substantially 

justified.” Nor was it “harmless” — Plaintiffs’ first relevant disclosure came one 

business day after Ramsell’s expert disclosure deadline expired. Ramsell is therefore 

prejudiced in his ability to call an expert to opine on whether Berger’s medical expenses 

were reasonable and necessary. Compare RAJI (Civ. 4th ed.) Personal Injury Damages 1 

(allowing damages for “[r]easonable expenses of necessary medical care, treatment, and 

services rendered . . . .”). 

Theoretically, the Court could admit Plaintiffs’ emotional damages evidence and 

extend discovery so that Defendants could have a fair opportunity to seek impeaching 

evidence. Discovery will not be extended for three reasons. First, it has already been 

extended once (see Doc. 153). Second, Plaintiffs have not explained why they failed to 

comply with continuing obligations that arose more than a year ago. Third, Plaintiffs’ 

emotional distress evidence would likely be excluded at trial anyway on relevance 

grounds because Berger apparently fails to state a claim for negligent infliction of 

emotional distress. In Arizona, such a cause of action requires negligence that “created 

an unreasonable risk of bodily harm” to the plaintiff. RAJI (Civ. 4th ed.) Negligence 9. 

This cause of action is intended for situations where, e.g., the defendant crashes into the 

plaintiff’s car while the plaintiff is standing just outside of it. In such cases, the plaintiff 

may not be injured by the crash but the fright of the situation may cause ongoing 

emotional trauma leading to physical symptoms. See, e.g., Quinn v. Turner, 155 Ariz. 

225, 226, 745 P.2d 972, 973 (Ct. App. 1987). Ramsell’s alleged failure to protect 

Plaintiffs’ collection did not “create an unreasonable risk of bodily harm” to Berger. 

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Accordingly, Plaintiffs’ evidence of Berger’s emotional distress damages will be 

excluded. 

IT IS THEREFORE ORDERED that Defendant Craig Ramsell’s and Defendant 

Kailasa Enterprises, LLC’s “Motion to Strike Plaintiffs’ Personal Injury Claims” (Doc. 

206), construed as a Fed. R. Civ. P. 37(c)(1) motion, is GRANTED. 

Dated this 4th day of January, 2012. 

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