Armstrong v. White Winston Select Asset Funds, LLC

647 F.Supp.3d 36

Grant ARMSTRONG and Armstrong RX GP, LLC, Plaintiffs, v. WHITE WINSTON SELECT ASSET FUNDS, LLC, Defendant/Third-Party Plaintiff, v. Armstrong RX II GP, LLC and Armstrong RX II, LP, Third-Party Defendants.

CIVIL ACTION NO. 16-10666-JGD

United States District Court, D. Massachusetts

Signed December 27, 2022

Benjamin H. Hathaway, Chase C. Hamilton, Richards Rodriguez & Skeith, Austin, TX, Justin P. O'Brien, Lovett O'Brien LLP, Boston, MA, W. Bradley Parker, The Parker Law Firm PC, Bedford, TX, for Plaintiffs.

George T. Dilworth, Jeffrey T. Piampiano, Kellie W. Fisher, Drummond Woodsum, Portland, ME, Jeffrey D. Sternklar, Jeffrey D. Sternklar LLC, Boston, MA, for Defendant/Third-Party Plaintiff.

Justin P. O'Brien, Lovett O'Brien LLP, Boston, MA, Benjamin H. Hathaway, Chase C. Hamilton, Richards Rodriguez & Skeith, Austin, TX, W. Bradley Parker, The Parker Law Firm PC, Bedford, TX, for Third-Party Defendants.

ORDER REGARDING WHITE WINSTON SELECT ASSET FUNDS, LLC'S MOTION TO STRIKE

DEIN, UNITED STATES MAGISTRATE JUDGE

I. INTRODUCTION

This matter concerns an action brought by Grant W. Armstrong ("Mr. Armstrong") and Armstrong RX GP, LLC ("AGP"), an entity wholly owned by Mr. Armstrong, against White Winston Select Asset Funds, LLC ("White Winston" or "WW"), a financing company that provided Mr. Armstrong and AGP with loans to purchase and operate two pharmacies in Texas, one in Plano (the "Plano Pharmacy") and one in Dallas (the "Dallas Pharmacy"). WW has also asserted counterclaims against Mr. Armstrong and AGP and filed a third-party complaint against Armstrong RX II GP, LLC and Armstrong RX II, LP (together with Mr. Armstrong and AGP, the "Armstrong Parties"). WW has moved for summary judgment in its favor on all claims asserted against it and its affirmative claims against the Armstrong Parties. (See Docket No. 233). The Armstrong Parties oppose WW's motion and argue that the evidence that they have submitted in response to the motion shows that genuine factual disputes exist to preclude entry of summary judgment in WW's favor. (See Docket No. 243). Currently before the court is "White Winston Select Asset Funds, LLC's Motion to Strike Portions of Affidavit of Grant W. Armstrong" (Docket No. 249) (the "Mot. to Strike"), which seeks to strike portions of one of the affidavits submitted by the Armstrong Parties to support their opposition to WW's motion for summary judgment.

The "Affidavit of Grant W. Armstrong" (Docket No. 245 Ex. 51) (the "Armstrong Affidavit") was executed on June 17, 2022, after WW filed its motion for summary judgment. WW now requests that the court strike certain paragraphs of the Armstrong Affidavit because, it argues, the information included within these paragraphs contradicts Mr. Armstrong's prior testimony at his March 7, 2022 deposition (see generally Mot. to Strike Ex. A ("Armstrong Dep. Tr.")). Specifically, WW seeks to strike the following portions of the Armstrong Affidavit: (i) paragraph 7; (ii) the final sentence of paragraph 8; (iii) a portion of paragraph 9; (iv) all of paragraphs 15 and 16; and (v) the final sentence of paragraph 20. (Mot. to Strike at 1).

The court assumes the reader's familiarity with the underlying facts of this matter. In sum, while the circumstances surrounding the timing of the Armstrong Affidavit call for a careful analysis to determine if it was proffered only to manufacture a factual dispute, the majority of the cited portions of the Armstrong Affidavit do not clearly contradict Mr. Armstrong's deposition testimony to warrant striking the information from the record. Accordingly, for the reasons provided herein, the Motion to Strike is hereby ALLOWED in part and DENIED in part.

II. LEGAL STANDARD

An affidavit submitted in connection with a motion for summary judgment is subject to the "sham affidavit" rule. "[W]hen an interested witness has given clear answers to unambiguous questions, he cannot create a conflict and resist summary judgment with an affidavit that is clearly contradictory, but does not give a satisfactory explanation of why the testimony is changed." Reynolds v. Steward St. Elizabeth's Med. Ctr. of Boston, Inc., 364 F. Supp. 3d 37, 52 (D. Mass. 2019) (quoting Colantuoni v. Alfred Calcagni & Sons, Inc., 44 F.3d 1, 4-5 (1st Cir. 1994)). The First Circuit has clarified, however, "that '[a] subsequent affidavit that merely explains, or amplifies upon, opaque testimony given in a previous deposition is entitled to consideration in opposition to a motion for summary judgment.' " Id. (quoting Gillen v. Fallon Ambulance Serv., Inc., 283 F.3d 11, 26 (1st Cir. 2002)). The "sham affidavit" rule is therefore only triggered when the affidavit clearly contradicts prior testimony. As such, in assessing the Motion to Strike, the court must first determine whether the "post-deposition affidavit contradicts [the] deposition testimony or whether the affidavit clarifies or augments the deposition." Mahan v. Boston Water & Sewer Comm'n, 179 F.R.D. 49, 55 (D. Mass. 1998). If there is a clear contradiction between the deposition testimony and the affidavit, "a satisfactory explanation is required." Id. Crucially here, the issue before the court is whether there is any inconsistency between the prior testimony and the new evidence, not the credibility of the statement included in the post-deposition affidavit. See Gattineri v. Wynn, MA, LLC, Civil Action No. 18-11229-FDS, 2022 WL 123621, at *5 (D. Mass. Jan. 13, 2022) (declining to strike information in affidavit that was not mentioned in deposition because such "issue appears to be one of credibility, which is best left to the jury").

III. DISCUSSION

a. Paragraph 7

In paragraph 7 of the Armstrong Affidavit, Mr. Armstrong attests, "No one conveyed to me prior to the Dallas transaction that Dallas sales by that time had been 'dropping like a rock.' " WW argues that this statement directly contradicts Mr. Armstrong's testimony that he could not recall any details about due diligence that he or any member of his team performed in connection with the purchase of the Dallas Pharmacy. (Mot. to Strike at 7). WW asserts that Mr. Armstrong similarly could not recall whether he had specific conversations with WW representatives concerning the profitability of the Dallas Pharmacy. (Id.) The court has reviewed the portions of Mr. Armstrong's deposition cited by WW as contradictory and concludes that Mr. Armstrong's statement that no one told him sales were "dropping like a rock" does not directly contradict his prior testimony. Neither Mr. Armstrong's failure to remember any due diligence efforts that he undertook nor his testimony that he did not recall whether he affirmatively discussed profitability with WW is inconsistent with the statement that he knows that no one at any time told him that sales at the Dallas Pharmacy were "dropping like a rock." Counsel for WW does not appear to have ever specifically asked Mr. Armstrong whether anyone conveyed to him that "sales were dropping like a rock" or asked about his knowledge with respect to sales at the Dallas Pharmacy in general. See Gattineri, 2022 WL 123621, at *5 (declining to strike paragraph when topic was not discussed during deposition and new information did not clearly contradict anything in testimony). As such, paragraph 7 of the Armstrong Affidavit provides only additional, not contradictory, testimony. Because the statement is not clearly contradictory, the "sham affidavit" rule does not apply, and the court will not strike paragraph 7 from the summary judgment record.

b. Paragraph 8

Paragraph 8 of the Armstrong Affidavit reads:

I testified truthfully at my deposition in this case to the best of my memory at the time about my conversation with Mr. Enright before the Dallas transaction. Since my deposition, I have recalled additionally that my meeting with Mr. Enright occurred at a restaurant (or hotel restaurant) near the Dallas-Fort Worth Airport because I recall that during our conversation Mr. Enright ordered a hamburger without a bun. I still do not recall how long the meeting lasted but I would estimate it was approximately 30 minutes to an hour.

(emphasis added). WW contends that this bolded portion of paragraph 8 directly contradicts Mr. Armstrong's deposition testimony in which he stated that he did not recall how long the meeting with WW's representative, Mr. Todd Enright, lasted. (Mot. to Strike at 8-9).

In his deposition, Mr. Armstrong was directly asked about the length of the meeting between himself and Mr. Enright. Mr. Armstrong repeatedly responded that he did not recall how long the meeting lasted and did not recall further details about the meeting.

Q: How long did the meeting last?

A: I don't recall.

Q: Or a magnitude: Was it a matter of minutes; was it a matter of hours; what was it?

A: I don't recall.

Q: Was there any other details of that meeting that you recall?

A: No.

(Armstrong Dep. Tr. 97:3-10). Mr. Armstrong's post-deposition statement providing an estimate for the length of the meeting, however, does not clearly contradict the information provided in his deposition. In his affidavit, Mr. Armstrong reasserts his previous testimony that he still does not recall how long the meeting lasted and merely provides an "estimate" of approximately 30 minutes to an hour. Even with the additional color of this statement, the fact remains that Mr. Armstrong does not recall how long this meeting lasted. The sentence at issue in paragraph 8 will therefore not be stricken from the record.

c. Paragraph 9

In paragraph 9 of the Armstrong Affidavit, Mr. Armstrong attests:

During my deposition, I testified to what I "believe" Mr. Enright told me. My intent was to convey that I remember in substance what he said but could not quote him or identify specifically how he said it. To be clear, my conversation with him during that meeting included his statements about the "Good Guy Clause," that the $500,000 line of credit and initial $100,000 draw would be

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