## Facts

- Jack R. Lorraine and Beverly Mack owned the yacht *Chessie* and insured it under a marine policy issued by Markel American Insurance Company.
- The yacht was struck by lightning while anchored in the Chesapeake Bay on May 17, 2004.
- Markel paid part of the claimed loss; months later, additional hull damage was discovered after the yacht was removed from the water.
- Markel disputed that the later-discovered hull damage was caused by lightning or covered under the policy.
- The parties entered a private arbitration agreement after related litigation was dismissed, and an arbitrator found some hull damage was lightning-caused but limited recoverable damage to $14,100 plus incidental costs.
- In the ensuing federal diversity action, the dispute centered on the scope and effect of the arbitration agreement and award, including whether the arbitrator could limit damages as awarded.
- After discovery, both sides filed cross-motions for summary judgment supported largely by documents and electronically stored information (ESI), including emails and arbitration materials.

## Issues

1. Whether the parties’ summary-judgment materials, largely consisting of ESI and documents, were admissible under the Federal Rules of Evidence for purposes of Federal Rule of Civil Procedure 56.
2. Whether the parties established authentication, addressed hearsay limitations or exceptions, satisfied the original-writing rule, and accounted for Rule 403 balancing as prerequisites to relying on ESI at summary judgment.
3. If admissible evidence were presented, what effect the arbitration agreement and award had on the recoverable damages (an issue the court did not reach).

## Decision

- The court denied both motions for summary judgment without prejudice.
- The court held that neither party supported its asserted facts with admissible evidence that could be considered under Rule 56.
- The court found pervasive failures to authenticate exhibits, address hearsay, comply with the original-writing rule, and demonstrate that probative value outweighed any risk of unfair prejudice.
- Because the summary-judgment record was evidentially insufficient, the court did not decide the merits concerning the arbitration agreement’s scope or the proper measure of damages.

## Legal Principles

- Summary judgment must be supported by materials that can be presented in admissible form at trial; unsupported or inadmissible exhibits cannot carry a Rule 56 burden.
- ESI offered into evidence must satisfy multiple evidentiary requirements: relevance (Rules 401–402), authentication (Rules 901–902), non-hearsay status or a hearsay exception (Rules 801–807), compliance with the original-writing rule (Rules 1001–1008), and Rule 403 balancing.
- Authentication under Rule 901(a) requires evidence sufficient to support a finding that the item is what the proponent claims; this applies to emails and other digital records, which may be authenticated through witness testimony, distinctive characteristics, system/process evidence, or other permissible methods.
- Parties relying on written communications and digital records must identify a hearsay theory (non-hearsay use, party-opponent admission, business records, or another exception) when offering statements for their truth.
- When proving the contents of writings, recordings, or photographs, a proponent must produce an original or admissible duplicate, or satisfy the rules permitting secondary evidence of content.
- Preliminary admissibility determinations concerning ESI are governed by Rule 104, including the court’s role in deciding foundational questions and conditional relevance.

## Conclusion

The court refused to grant summary judgment because the parties’ reliance on unauthenticated, hearsay-laden, and best-evidence-deficient ESI and documents failed to meet the evidentiary foundations required for Rule 56, leaving the substantive arbitration-related dispute unresolved pending a properly supported record.


Lorraine v. Markel Am. Ins. Co., 241 F.R.D. 534 (D. Md. 2007)