Loadman Grp. v. Banco Popular N. Am.

LOADMAN GROUP, L.L.C., et al., PLAINTIFFS,

v.BANCO POPULAR NORTH AMERICA, DEFENDANT.

CASE NO. 4:10cv1759

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF OHIO EASTERN DIVISION

Dated: March 19, 2013

JUDGE SARA LIOI

MEMORANDUM OPINIONAND ORDER

(Resolving Doc. Nos. 52 and 53)

Before the Court are defendant's motions to strike the affidavit of Eric Loadman and the affidavit and supplemental affidavit of Frank Coco (Doc. Nos. 52 and 53), plaintiffs' opposition thereto (Doc. No. 58), and defendant's reply (Doc. No. 60). For the reasons discussed below, the Court construes defendant's motions to strike as evidentiary objections pursuant to Fed. R. Civ. P. 56(c)(2)¹ and the same are SUSTAINED in part.²

I. RELEVANT PROCEDURAL OVERVIEW

A full recitation of the procedural history and factual background may be found in the Court's Memorandum Opinion and Order (Doc. No. 65) filed contemporaneously with thisMemorandum Opinion and Order. For purposes of the Court's ruling herein on the motions to strike, and in order to prevent unnecessary repetition, the Court provides this very succinct procedural overview: On May 3, 2011, Loadman Group L.L.C. ("Loadman Group") and Eric J. Loadman ("Loadman")³ filed an amended complaint against defendant Banco Popular North America ("defendant" or "Banco"), alleging claims for breach of oral and written contracts, breach of the duty of good faith and fair dealing, willful misconduct and intentional misrepresentation, intentional infliction of emotional distress, and negligent misrepresentation, all stemming from Banco's decision not to close on a Small Business Administration ("SBA") insured loan to Loadman and Loadman Group. (Doc. No. 19.)

On April 2, 2012, Banco moved for summary judgment as to all claims in the amended complaint. (Doc. No. 35.) In response to that motion, plaintiffs offered the affidavit testimony of Loadman and Coco (Doc. Nos. 45-4, 45-5 and 46-4), which plaintiffs maintain created genuine issues of material fact. Defendant moves to strike the affidavits, raising a myriad of evidentiary objections to the content therein. Defendant's objections to the affidavits must be resolved before the Court addresses the motion for summary judgment. Because the number of meritorious objections is so great, and the required analysis is so extensive, the Court has elected to rule on the objections in this separate Memorandum Opinion and Order.

II. APPLICABLE EVIDENTIARY CONSIDERATIONS UNDER RULE 56

In order to be considered by the Court on a motion for summary judgment, an affidavit must satisfy three formal requirements: (1) it "must be made on personal knowledge";(2) it must "set out facts that would be admissible in evidence"; and (3) it must "show that the affiant . . . is competent to testify on the matters stated." Fed. R. Civ. Pro. 56(c)(4). Additionally, the party offering the affidavit must support the assertions made therein by "citing to particular parts of materials in the record[.]" Fed. R. Civ. P. 56(c)(1)(A). Further, a party may not "'create a factual issue by filing an affidavit, after a motion for summary judgment has been made, which contradicts . . . earlier deposition testimony.'" Wright v. Baker, 849 F. Supp. 569, 572 (N.D. Ohio 1994) (quoting Reid v. Sears Roebuck & Co., 790 F.2d 453, 460 (6th Cir. 1986)). Courts have also held "a party cannot create a genuine issue of fact sufficient to survive summary judgment simply by contradicting his or her own previous sworn statement without explaining the contradiction or attempting to resolve the disparity." Aerel, S.R.L. v. PCC Airfoils, L.L.C., 448 F.3d 899, 908 (6th Cir. 2006). In resolving defendant's objections to the affidavits offered in opposition to summary judgment, the Court must use "a scalpel, not a butcher knife, . . . striking portions of affidavits that do not satisfy the requirements of [Rule 56(c)(4)]." Upshaw v. Ford Motor Co., 576 F.3d 576, 593 (6th Cir. 2009) (citation and internal quotation marks omitted) (holding district court abused its discretion by striking the entire affidavit, rather than striking only the inadmissible portions).⁴ But some courts (outside the Sixth Circuit) have found entire affidavits inadmissible on the grounds that it would be all but impossible for the trial court to separate out the affidavit's admissible content from the inadmissible content. See Hatch v. Boulder Town Council, No. 07-4239, 2009 WL 82699, at *1 (10th Cir. Jan. 14, 2009)(acknowledging general rule that courts disregard only portions of affidavit that are inadmissible, but noting exception that "entire affidavit may be disregarded if inadmissible matter is so interwoven or inextricably combined with the admissible portions that it is impossible, in the practical sense, to separate them.") (quoting S. Concrete Co. v. United States Steel Corp., 394 F. Supp. 362, 380-81 (N.D. Ga. 1975), aff'd, 535 F.2d 313 (1976)) (internal quotation marks omitted); Southard v. State Farm Fire & Cas. Co., No. 4:11-CV-243, 2013 WL 209224, at *10 (S.D. Ga. Jan. 17, 2013) (finding that inadmissible portions of summary judgment affidavit were so interwoven with the rest of the affidavit that the affidavit should be excluded in its entirety).

III. ANALYSIS OF DEFENDANT'S OBJECTIONS

When Loadman and Coco were deposed, they responded to questions about a multitude of events and issues, their responses to which often indicated a lack of any recall and/or specific details. Despite this testimony, and in an apparent attempt to create issues of material fact, Loadman and Coco are now able, in their affidavits, to recount with specific clarity and exceptional detail the very same events and conversations that they either could not recall or failed to mention during their depositions. For example, in their affidavits, unlike their deposition testimony:

• They related the same exact word-for-word conversation with Joe Wojtowicz ("Wojtowicz") and Matthew Putnam ("Putnam") of Banco, in which Wojtowicz and Putnam made certain assurances in exchange for Loadman's promise to give the exclusive right to make the loans. (Doc. No. 45-4 at 1475; Doc. No. 45-5 at 1493.) This purportedly led Loadman to withdraw his loan application with Community South Bank, losing a non-refundable fee of $15,000.00. (Doc. No. 45-5 at 1494.)

Additionally, although not testified to while being deposed, they averred in their affidavits that:

• Banco's in-house attorney, Kristina Rozek ("Rozek"), wrote to Loadman's attorney, Vincent Restauri ("Restauri"), and told him all that was needed toresolve the environmental issues was execution of an indemnification agreement and a deposit in escrow for 150% of the cost of remediation as estimated by John Burkart ("Burkart"), an environmental expert from LandAmerica who worked with Allred Metal Stamping Works, Inc. ("Allred Metal"), a metal stamping business in North Carolina, on a remediation plan. (Doc. No. 45-4 at 1479; Doc. No. 45-5 at 1497.); and

• While Loadman was waiting for loan approval, Banco imposed additional requirements, including instructing Loadman and Allred Metal to phase out certain customers and to bring in new customers, resulting in declining revenues; directing him to quit his $120,000 a year job in Atlanta and to move to North Carolina; mandating he hire a plant manager subject to Banco's approval; and requiring him to create a North Carolina limited liability company. (Doc. No. 45-5 at 1500-01; Doc. No. 45-4 at 1483-84.)

These are but some of the newly recalled facts and details, which, curiously, the affiants did not mention during their depositions, notwithstanding numerous opportunities to do so in response to directly pertinent questions.

As discussed more fully below, the Court finds the affidavits of Loadman and Coco are replete with content that is not based on personal knowledge, lacks foundation, is speculative, is based on inadmissible hearsay and lay opinion testimony, and refers to documentary evidence not in the record. As well, several of Coco's and Loadman's sworn statements must be disregarded on summary judgment because those statements are inconsistent with and directly contradictory to the affiants' deposition testimony. In short, the affidavits contain so much inadmissible content that, once those portions are set aside, little remains, and what does remain is so interwoven and inextricably combined with the inadmissible content that the Court believes it is presented with the rare situation wherein all three affidavits should be disregarded in their entirety. Nonetheless, in an effort to perform the favored "scalpel" method, as set forth in the chart at the end of this opinion and in accordance with the evidentiary standards which follow, this Court has performed a line-by-line analysis of the affidavits (inresponse to defendant's stated objections) to determine the admissibility of the individual statements contained therein.

A. Personal Knowledge

Summary judgment affidavits must be based on personal knowledge. Sperle v. Mich. Dep't of Corr., 297 F.3d 483, 495 (6th Cir. 2002); Fed. R. Civ. P. 56(c)(4). Affidavits based on mere "information and belief," as opposed to facts the affiant knows to be true, are not proper. Automatic Radio Mfg. Co. v. Hazeltine Research, Inc., 339 U.S. 827, 831 (1950), overruled on other grounds by Lear, Inc. v. Adkins, 395 U.S. 653 (1969). In order for inferences, thoughts, and opinions to be properly included in a Rule 56 affidavit, they must be premised on firsthand observations or personal experience, and established by specific facts. Buchanan v. City of Bolivar, 99 F.3d 1352, 1355 n.2 (6th Cir. 1996); Drake v. Minn. Mining & Mfg. Co., 134 F.3d 878, 887 (7th Cir. 1998) ("[a]lthough 'personal knowledge' may include inferences and opinions, those inferences must be substantiated by specific facts"). "Mere suspicion or possibility[] . . . does not create an issue of fact." Milne v. Mills, 765 F.2d 145 (Table), 1985 WL 13294, at *1 (6th Cir. May 29,...