Caplan v. Telephone Technologies, Inc. et al

UNITED STATES BANKRUPTCY COURT
DISTRICT OF NEW MEXICO
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06/10/06
Michael J. Caplan v. Telephone Technologies, Inc., et al.
04-01196
Order Granting [33-1] Motion to Depose Witnesses that Reside in the Virgin
Islands and to use deposition of witnesses as evidence at trial by Government of
the Virgin Islands .
Received on: 2006-04-18 12:55:43.000
2006-04-18 00:00:00.000
2006-04-18 00:00:00.000
Ellen Snyder
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UNITED STATES BANKRUPTCY COURT
DISTRICT OF NEW MEXICO
In re:
Colony Information Technology Corp.,
Debtor. 	No. 7-03-11161 MA
Michael J. Caplan, Trustee,
Plaintiff,
v. 	Adv. No. 04-1196 M
Telephone Technologies, Inc.
and Government of the Virgin Islands, a territory of
the United States of America,
Defendants.
ORDER GRANTING MOTION TO DEPOSE WITNESSES
TO PRESERVE TESTIMONY FOR TRIAL
THIS MATTER is before the Court on the Government of the Virgin Islands’ Motion to
Depose Witnesses That Reside in the Virgin Islands and to Use Deposition Testimony of
Witnesses as Evidence at Trial (the “Motion”). The Plaintiff, Michael J. Caplan (“Plaintiff”)
filed an Objection, to which the Government of the Virgin Islands (“GVI”) replied. Having
reviewed the Motion, the Objection, and the Reply, and the applicable law, and being otherwise
sufficiently informed, the Court will grant the Motion and will allow the GVI to take the
deposition testimony of its witnesses to be offered at trial in lieu of live testimony.
Discussion
The GVI argues that the depositions are warranted under Rule 32(a)(3)(B), Fed.R.Civ.P.,
made applicable in bankruptcy adversary proceedings by Rule 7032, Fed.R.Bankr.P., which
allows the use of deposition testimony at trial. The Rule states the following:
(a) Use of Depositions. At the trial or upon the hearing of a motion or an interlocutory
proceeding, any part or all of a deposition, so far as admissible under the rules of
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1 Rule 16(b),Fed.R.Civ.P., applicable to this proceeding through Rule 7016,
Fed.R.Bankr.P., states “[a] schedule shall not be modified except upon a showing of good cause
and by leave of the district judge . . .
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evidence applied as though the witness were then present and testifying, may be used
against any party who was present or represented at the taking of the deposition or who
had reasonable notice thereof, in accordance with any of the following provisions:
. . .
(3) The deposition of a witness, whether or not a party, may be used by any party
for any purpose if the court finds:
. . .
(B) that witness is at a greater distance than 100 miles from the place of
trial, . . . or is out of the United States, unless it appears that the absence of
the witness was procured by the party offering the deposition[.]
Rule 32(a)(3)(B), Fed.R.Civ.P.
Plaintiff argues that depositions in lieu of live testimony should not be allowed because
the deadline for discovery, January 20, 2006, has passed according to the Scheduling Order
(Doc. No. 26), and the GVI has not shown good cause to modify the Scheduling Order under
Rule 16(b), Fed.R.Civ.P.1 According to Plaintiff, all depositions, whether to preserve trial
testimony or for discovery purposes, are subject to the Scheduling Order and the strictures for
modification, The GVI contends that even though discovery is closed, it should be permitted to
take depositions because they are not part of its discovery, but are only a means to present
testimony at trial. The GVI argues in the alternative that if the Court finds that good cause is
necessary to allow these depositions, then it has shown that there is good cause to allow the
depositions. The GVI asserts that the expense to transport several witnesses to New Mexico for
trial is too burdensome when presentation of the witnesses’ deposition testimony would be
allowed pursuant to Rule 32, Fed.R.Civ.P.
Rule 32, Fed.R.Civ.P. allows admission of depositions under certain circumstances but
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does not distinguish between depositions for the purpose of discovery and depositions for the
purpose of preserving testimony to be used at trial. See Integra Lifesciences I, Ltd. V. Merck
KGaA, 190 F.R.D. 556, 558 (S.D.Cal. 1999)(“Although Rule 32(a)(3)(B) & (E) provides
circumstances under which depositions may be admissible as evidence at trial, that Rule does not
distinguish between discovery and trial depositions or suggest when or under what circumstances
a deposition to be used at trial should properly be taken.”). Moreover, Rule 30, Fed.R.Civ.P.,
which governs depositions in general does not distinguish between types of depositions.
Although the Rules do not distinguish between discovery depositions and trial
depositions, courts have recognized a difference as a practical matter. See RLS Assoc., LLC v.
United Bank of Kuwait, PLC, 2005 W.L. 578917 at * 6 (S.D.N.Y. 2005)(unpublished) (“the
majority of courts considering this issue have made what can only be described as a federal
common law distinction between ‘discovery depositions’ and ‘trial depositions’ (or alternatively,
‘preservation depositions.’), and have held the latter category permissible even after the
discovery deadline had passed.”); Estenfelder v. Gates Corp., 199 F.R.D. 351, 354 (D. Colo.
2001)(“[M]any courts recognize that ‘the discovery cut-off’ does not prevent a party from
memorializing a witness' testimony in order to offer it at trial.’”)(quoting, Spangler v. Sears,
Roebuck and Co., 138 F.R.D. 122, 123 (S.D.Ind.1991)); and Spangler v. Sears, Roebuck & Co.,
138 F.R.D. 122, 124 (S.D.Ind. 1991)(finding that the difference between discovery and trial
depositions is recognized “[a]s a matter of custom or practice.”).
Plaintiff argues that the Scheduling Order expressly requires notice of all depositions to
be served and all depositions to be completed before the deadline:
January 20, 2006: Discovery completion deadline. For purposes of this order,
“completed” is defined as having served all . . . notices to take depositions . . . within a
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time frame which allows for . . . depositions . . . to be completed prior to the discovery
deadline.
Scheduling Order, Doc. No. 26. Plaintiff argues that this language distinguishes this case from
those allowing late trial depositions. Plaintiff argues further that the GVI has not shown good
cause to modify the Scheduling Order under 16(b).
The Court agrees with the more flexible approach of the majority of courts allowing the
taking of trial depositions to be offered in lieu of live testimony of an unavailable witness even
though the discovery deadline has passed. Therefore, the Court will allow the depositions under
the circumstances presented by this case.
THEREFORE, IT IS HEREBY ORDERED that the Motion is granted contingent upon
the GVI reimbursing the bankruptcy estate for all reasonable expenses incurred by the Plaintiff’s
counsel to attend the depositions;
FURTHER ORDERED that by May 5, 2006 the GVI shall provide a list of all witnesses
that it intends to depose;
FURTHER ORDERED that by July 7, 2006 all of the depositions must be completed;
and
FURTHER ORDERED that counsel for the GVI and the Plaintiff shall agree to a
schedule for the depositions and file the schedule with the Court by May 15, 2006.
MARK B. McFEELEY
UNITED STATES BANKRUPTCY JUDGE
I certify that on the date shown on the attached document verification, a true and correct copy of
the foregoing was either electronically transmitted, faxed, delivered or mailed to the listed
counsel and/or parties.
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William F. Davis
Attorney for the Plaintiff
P.O. Box 6
Albuquerque, NM 87103
Carol Thomas-Jacobs
Assistant Attorney General GVI
34-38 Kronprindsens Gade
GERS Complex, 2nd Floor
St. Thomas, USVI 00801
Ellen C. Snyder
Law Clerk
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