Opinion ID: 659420
Heading Depth: 4
Heading Rank: 3

Heading: Relevance and Materiality

Text: 40 Both Paine Webber and Ruden Barnett argue that the California litigation materials were irrelevant and immaterial to BankAtlantic's lawsuit. The district court disagreed and found remarkable the alleged revelation in the materials for BankAtlantic that Butch Tharp, an alleged key player in the interest rate swap between BankAtlantic and Homestead, was not an employee of Paine Webber but of PWRES. BankAtlantic sued Paine Webber in large part because of the conduct of Tharp, who allegedly matched BankAtlantic with Homestead. BankAtlantic asserted that it always operated under the belief that Tharp was a Paine Webber employee. The California litigation examined a lengthy relationship between PWRES and Homestead. The fact that Tharp may have had a close connection with Homestead through PWRES is relevant and material to BankAtlantic's conflict of interest theory. Thus, the district court found this piece of evidence important to the relevance and materiality of the California litigation materials. BankAtlantic, 127 F.R.D. at 228. 41 Paine Webber and Ruden Barnett dispute the district court's finding that BankAtlantic first became aware of Tharp's employment with PWRES as a result of documents from the California litigation materials. They assert that BankAtlantic at all times knew Tharp worked for PWRES and not Paine Webber; therefore, the California litigation materials are irrelevant. Even if the district court erred in its finding that BankAtlantic first discovered Tharp's employment with PWRES as a result of the California litigation materials, the materials contain other relevant and material evidence. 42 One issue in BankAtlantic's lawsuit against Paine Webber was whether BankAtlantic was able to mitigate damages through exiting the swaps. BankAtlantic's position was that mitigation was impossible because Homestead was not credit worthy and no other financial institution would purchase BankAtlantic's position with Homestead. In Homestead I, PWRES argued that Homestead was unable to meet its side of the bargain with PWRES. PWRES emphasized Homestead's financial losses and unstable and incompetent management. Paine Webber's evidence to the contrary--that Homestead was credit worthy--only gives support to the district court's relevancy finding. The California litigation materials are relevant and material to contradict Paine Webber's evidence of creditworthiness. 43 The district court found other relevant material in the Homestead I materials: evidence that a Homestead official testifying to Homestead's creditworthiness lied under oath. BankAtlantic, 127 F.R.D. at 229. Because Paine Webber planned to rely on this official's statements to support its contention that Homestead was credit worthy, the Homestead I material is relevant to impeach the official. 44 The district court also found that the California litigation materials provided background evidence of PWRES and Homestead's relationship and why Paine Webber chose Homestead for the interest rate swaps. Based on the above, we agree with the district court that the California litigation materials were both relevant and material to BankAtlantic's lawsuit. 45 The discovery order was sufficiently clear to put Paine Webber on notice that the order required disclosure of the California litigation materials. These materials were both relevant and material to BankAtlantic's lawsuit. BankAtlantic suffered prejudice resulting from Paine Webber's violation of the discovery order. We hold that Paine Webber's contention that the sanction order violated due process is without merit, and the district court did not abuse its discretion in assessing reasonable attorneys' fees and costs BankAtlantic incurred against Paine Webber and Ruden Barnett as sanctions pursuant to rule 37. Paine Webber and Ruden Barnett's other contentions are without merit.