Western Alliance Bank v. Jefferson
ORDER AND OPINION denying 108 Motion to Exclude the Expert Reports and Testimony of William Flynn and denying 110 Motion for Discovery. Jefferson shall pay Bank and Kritza their reasonable attorney fees incurred in connection with the motions at (Docs. 108 and 110 ), and if the parties cannot agree on the appropriate amount of fees and so advise the court in a stipulation, Bank and Kritza shall file a motion for attorney fees within 21 days from the date of this order, Jefferson shall respond within 7 days from the filing of each motion, and Bank and Kritza may reply within 7 days from the filing of the response to its motion. See PDF document for details. Signed by Judge John W Sedwick on 8/6/15.(LSP)
UNITED STATES DISTRICT COURT
DISTRICT OF ARIZONA
Western Alliance Bank,
Western Alliance Bank,
Theodore Kritza & Michelle Lee
Third-party defendants. )
ORDER AND OPINION
[Re: Motions at Dockets 108 and 110]
I. MOTIONS PRESENTED
At docket 108 third-party defendants Theodore Kritza and Michelle Lee Kritza
(“Kritza”) move for an order precluding opinion testimony from William Flynn (“Flynn”), a
forensic document examiner retained by defendant, counter-claimant, and third-party
plaintiff Richard Jefferson (“Jefferson”). At docket 110, plaintiff Western Alliance Bank
(“Bank”) also moves to preclude opinion testimony from Flynn. Jefferson opposes both
motions in a single response at docket 137. Kritza’s reply is at docket 145. Bank did
not file a reply. Oral argument was requested but would not assist the court.
II. BACKGROUND OF THE LAWSUIT
The court has described the background giving rise to this litigation in detail in
the order at docket 183. It need not be repeated here. Suf fice it to say for purposes of
the present motion that Bank sued Jefferson to recover an unpaid debt evidenced by or
reflected in various documents attached to its complaint. In his answer, Jefferson
admitted that he is the borrower listed in the paperwork, but alleged that his signature
on the documents was forged. In his third-party complaint against Kritza, Jefferson
recites, “Jefferson affirmatively believes that Exhibits A-K [to Bank’s complaint] are
forgeries, signed without his consent or authorization by Third-Party Defendant
Theodore Kritza.”1 Jefferson retained Flynn as a handwriting expert to examine the
signatures whose authenticity he disputes.
Doc. 33 at ¶ 9.
A. Background Of The Motions at Dockets 108 and 110
The court entered a Scheduling Order at docket 26 which set the date for Bank’s
expert disclosures on September 5, 2014, the date for Jefferson’s expert disclosures on
October 3, 2014, and rebuttal reports on November 4, 2014. 2 Thereafter the parties
twice stipulated to extend those deadlines. The court approved the stipulations. The
order at docket 57 approving the second stipulation set the deadline f or Jefferson’s
expert disclosures on November 10, 2014, Kritza’s expert disclosures on December 10,
2014, and the deadline for rebuttal expert disclosures on January 6, 2015.
Of course, the deadlines for expert disclosures are an important consideration in
setting a deadline for the close of discovery. The Scheduling Order at docket 26 set the
deadline for completion of discovery on April 10, 2015. On April 10, the parties
stipulated at docket 91 to extend the date for taking the depositions of lay witnesses
Corey Hoff, James Tucciarone, Richard Jefferson, Richard Murnick and Daniel Kelly
until various specific dates, the latest of which was May 6, 2015.3 The parties also
stipulated to extend the deadlines for discovery motions and dispositive motions to
reflect the extension of the discovery deadline. The court approved the stipulation in an
order at docket 94. Thus, with the exception of the depositions of the five specified
No deadline was set for Kritza to disclose an expert report because the parties’
underlying report upon which the court relied was based on a meeting held prior to the
appearance of Kritza in the action.
The parties subsequently stipulated at docket 103 and jointly moved at docket 104 to
extend the date for Daniel Kelly’s deposition to May 20, 2015. The requested extension was
approved by the court in the order at docket 105.
witnesses, discovery closed on April 10, 2015.
Jefferson made a timely expert disclosure on November 10, 2014, (“First
Report”) identifying Flynn as an expert forensic document examiner, setting out his c.v.,
and describing Flynn’s examination of six signatures known to be genuine and his
examination of 37 questioned signatures. The First Report also provided Flynn’s
Based on my knowledge, experience, and the forensic examination of the
questioned Items Q(1-37) and known Items K(1-6), the following
conclusions were reached:
The known signatures of Richard Jefferson appearing on Items
K(4-6) (his post-NBA style of signature) are in agreement with one
another. That is to say, there are consistent letterforms, sizes and
movements associated with these three signatures, even though
they have been executed of over a period of more than 3 years.
The 37 questioned signatures, however, are made in ways that are
consistently different than the K(4-6) signatures.
If Mr. Jefferson’s signature style has remained consistent with
those exhibited in Items K(4-6) during the period in question (20042013), then there is strong forensic evidence indicating that the
signatures in question are the product of another writer.
I would request that additional normal-course-of-business
signatures of Mr. Jefferson be obtained that are unquestionably his
and cover the period in time 2004 through 2013. If such signatures
can be located and submitted for forensic examination, it is likely
that a final determination as to authorship of the questioned
signatures can be obtained. 4
The First Report suggests that, given an assumption about how representative
Doc. 108-1 at 6-7. It will be noted that Flynn’s statement in Item 1 to the effect that the
three known items spanned a period of three years is inconsistent with Flynn’s description of
the items. He describes K4 as a document dated July 21, 2010, item K5 as an undated
document, and item K6 as a document dated 10-9-12, establishing a time span of only 2 years
and 2 months.
Items K(4-6) may be, there would be strong evidence that the questioned documents
were forged. However, the First Report does not actually conclude that any of the
questioned documents are forgeries. The First Report was the only expert witness
disclosure from Jefferson available to Kritza prior to the date his own expert disclosure
was due on December 10, 2014. Given the absence of probative value in Flynn’s
conclusions in the First Report, it is not surprising that Kritza did not retain an expert to
provide expert testimony regarding the signatures.
On March 13, 2015 Kritza obtained a subpoena directing Flynn to provide the
documents on which the First Report relied and then noticed Flynn’s deposition for April
9, 2015. Responding, on March 25, 2015, Jefferson disclosed the documents relied on
by Flynn in the First Report, and also disclosed a second report f rom Flynn dated March
25, 2015 (“Second Report”) together with the additional documents relied on in the
Second Report. 5 The Second Report reflects Flynn’s examination of 46 questioned
items and 20 items known to contain Jefferson’s signature as well as one item known to
contain the handwriting and signatures of Corey Hoff. What may be Hoff’s signature
appears as a witness’ signature on the first questioned item, a durable power of
attorney dated August 1, 2003, a document of great significance in this litigation.
The Second Report is substantially more significant than the First Report. In it
Flynn announces the following conclusions, among others:
As a result of my examination I have concluded that, to a high
degree of probability, the “Richard Jefferson” signatures in question
appearing on Items Q(1-41) and Q(43-46) were not executed by
the maker of the known Richard Jefferson signatures. The
A copy is at doc. 110-3.
questioned signature appearing on Item Q-42 was too faint to see
the fine detail needed to reach a conclusion as to authorship.
On March 14, 2015 I received an email attachment from Mr.
Saalfeld marked as the Cannon Street Interview Report dated
3/14/15. This document contained known handwriting and
signatures of Mr. Corey Hoff. The signatures contained in this file
were then compared to the questioned Corey Hoff signature
appearing on Item Q-1. In this exam significant differences were
noted in the “Hoff” signature appearing on Item Q-1 and the “early
version” of Mr. Hoff’s signature. As a result of this analysis it is
considered probable that the maker of the known Corey Hoff
signatures on Item K-21 did not execute the Hoff signature
appearing on Item Q-1.6
Flynn was deposed as scheduled on April 9, 2015. During the deposition, he
testified that he probably began asking plaintiff’s lawyer, Mr. Saalfald, for additional
known signatures shortly after he issued the First Report and that Saalfald assured him
“they would make every effort they could.”7 Flynn testified that he received the
additional known Jefferson signatures on March 17, 2015, and the Hof f writing on
March 23, 2015. 8
Jefferson supplemented his expert disclosures with the Second Report and the
various signature-bearing documents on March 26, 2015, 9 more than four months after
Jefferson’s expert disclosures were required.10 Bank and Kritza contend that because
the Second Report and all of the known signature-bearing documents were untimely
Id. at 14.
Deposition of William J. Flynn, extract provided at doc. 108-1 at 60-61 (pp. 31-32 of the
Id. at 59-60 (pp. 29-30 of the deposition transcript).
Opposition, doc. 137 at 5.
Order at doc. 57.
disclosed, the court should exclude Flynn’s testimony in its entirety. Jefferson argues
that for several reasons, the court should not exclude Flynn’s testimony.
The arguments by Bank and Kritza implicate several provisions of the Federal
Rules of Civil Procedure. The first is Rule 26(b)(2)(B) which, as pertinent here, requires
that expert disclosures include: “(1) a complete statement of all opinions the witness
will express and the basis and reasons for them; (ii) the facts or data considered by the
witness in forming them; [and] (iii) any exhibits that will be used to summarize or
support them.” The second is Rule 26(a)(2)(D) which requires the parties to make their
expert disclosures “at the times and in the sequence that the court orders.” The third is
Rule 37(c)(1) which states that if a party fails to provide information as required by Rule
26(a) “the party is not allowed to use that information or witness to supply evidence . . .
unless the failure was substantially justified or is harmless.” It must be noted that
instead of or in addition to this exclusionary sanction a court may impose other
appropriate sanctions. 11
B. Testimony Based on the First Report
Both Kritza and Bank contend that the First Report and t estimony corresponding
thereto should be excluded. The argument for exclusion of the First Report and related
testimony rests on the asserted failure of Jefferson to disclose the information required
by Rule 26(a)(2)(B). In particular, it is asserted that there was no timely disclosure of all
of Flynn’s opinions, no disclosure of the “basis and reasons” for Flynn’s opinions, no
disclosure of “the facts or data considered by [Flynn]”, and no disclosure of documents
Fed. R. Civ. P. 37(c)(1)(C).
that will be used to “summarize and support” Flynn’s opinions.
Movants’ papers are correct to suggest that the First Report does not disclose all
of Flynn’s opinions. What the First Report says is that if an assumption is made
regarding the duration of a certain signature style then there would be “strong evidence”
of forgery. This is not a complete statement of Flynn’s opinions, for that does not
emerge until the presentation of the Second Report. As the court sees the issues, the
First Report and testimony based on it would not be admissible for the purpose of
showing that any of the questioned documents were forged, because the First Report
does not, and cannot as seen in Flynn’s own conclusions, actually express an opinion
on that issue. In general, the court agrees with Kritza’s argument12 that testimony
based on the First Report is not sufficiently reliable to be admissible under Rule 702
and that any probative value it might conceivably have is substantially outweighed by
the risk of confusing the jury which would require its exclusion under Rule 403.
Testimony based on the First Report will not be permitted. Thus, the issue becomes
whether under all of the circumstances, testimony based on the Second Report and
associated supplementary materials should be admitted.
B. Testimony Based on the Second Report
The court now considers the Second Report and the various supplementary
documents showing Jefferson’s signatures. One reason Jefferson contends that the
delayed disclosure of the Second Report and supplementary materials does not bar
Doc. 108 at 10-12.
their use is that they were “proper supplements.”13 Jefferson cites Rule 26(e) and an
Illinois district court case, Talbert v. City of Chicago 14 to support this argument.
Jefferson does not elaborate on the proposition that the Second Report and
supplementary materials were a timely supplement to the First Report based on Rule
26(e). An examination of the relevant rules shows that Jefferson’s reliance on Rule
26(e) is unavailing. That rule provides that supplements relating to expert disclosures
must be made by the time disclosures under Rule 26(a)(3) are due. Rule 26(a)(3) in
turn provides for disclosures within 30 days prior to trial unless “the court orders
otherwise.” Here the court did order otherwise when it set the November 14, 2014,
deadline for Jefferson’s expert disclosures.15 The scheduling of expert disclosures by
the court is a common practice and one specifically sanctioned by Rule 26(a)(2)(D).
Jefferson’s reliance on Talbert is also unavailing. There, the City of Chicago
complained that Talbert’s supplemental report which had to a large extent been
produced at the City’s own request should be excluded. In contrast to the situation
here, in Talbert the supplemental report was not untimely. To the contrary, the parties
in Talbert agreed that there would be a supplemental report with the expert’s deposition
to follow the supplemental report.16 Indeed, in Talbert the judge made a point of
distinguishing a decision by the relevant circuit court in Salgado v. General Motors
Doc. 137 at 9.
236 F.R.D. 415 (N.D. Ill. 2006) (mis-named by Jefferson as “Talbot v. City of
Order at doc. 57.
236 F.R.D. at 417-18.
Corp.,17 pointing out that in Salgado, the party offering the expert report had not
complied with the court ordered deadline for submitting expert reports. “There is
nothing novel about Salfado’s holding. It is simply an application of the federal court’s
consistent recognition of the importance of adherence to discovery deadlines and of the
broad authority district courts have to deal with deviations from those deadlines.” 18
Rule 37(c)(1) and Ninth Circuit case law 19 recognize that untimely disclosed
expert testimony should not be excluded where the failure to timely disclose “was
substantially justified or is harmless.”20 Bank and Kritza’s initial motion papers
persuasively argue that the untimely disclosure of the Second Report and
supplementary materials was not substantially justified. Jefferson’s response does not
include meaningful argument that the late disclosure was substantially justified.
Jefferson does argue that the delay in disclosing the Second Report and
supplementary materials was harmless. He urges that this is so because defendants
had an opportunity to and did depose Flynn after the Second Report and
supplementary materials were disclosed. Jefferson cites Cloud v. Pfizer, Inc.21 in
support of his argument. The pertinent issue in Cloud was whether to strike an affidavit
by plaintiff’s expert filed to support plaintiff’s opposition to Pfizer’s motion to exclude the
expert’s testimony. The court denied the motion to strike for two reasons, the first being
150 F.3d 735 (7th Cir. 1998).
236 F.R.D at 422-23.
Yeti by Molly, Ltd. v. Deckers Outdoor Corp., 259 F.3d 1101, 1106-07 (9th Cir. 2001).
Fed. R. Civ. P. 37(c)(1).
198 F. Supp.2d 118, 1128 (D. Ariz. 2001).
that the court had already ruled that the affidavit was timely filed, and the second being
that the affidavit was harmless in light of what Pfizer knew from the expert’s original
report and deposition testimony. Cloud did not involve an effort to have a second or
supplemental expert report considered. It dealt only with the viability of the first and
only expert report, and so offers little support for Jefferson’s position.
Jefferson also relies on Jackson v. Allstate Ins. Co. 22 That case supports his
contention that the delay in disclosure was harmless. In Jackson the relevant evidence
included evidence about the location of certain individuals around the time of a fire
which burned Jackson’s home. Allstate retained an expert witness named Levy with
expertise in locating people via cell phone tracking. The appellate court framed the
issue as follows:
Jackson next asserts the district court erred by denying her motion to
exclude Levy’s expert testimony because of a late disclosed supplement
expert report. The record indicates that on December 2, 2013, Jackson
took an extensive deposition of Levy . . . . On the morning of the
deposition Levy conducted a field study of the cell towers located near
Jackson’s house. During the deposition Levy disclosed to Jackson’s
counsel that he had conducted the f ield study, discussed the
methodologies he utilized, and fully explained the results of the study.
Approximately two weeks later, Levy provided Jackson with a
supplemental report that summarized the same information Levy
disclosed during his deposition.23
The Jackson court recognized that under Rule 37(c)(1) the supplemental report and
associated testimony was subject to exclusion, but nonetheless affirmed the trial court’s
decision to permit use of Levy’s testimony. The appellate court found the late
785 F.3d 1193 (8th Cir. 2015).
Id. at 1203-04.
disclosure to be harmless because Jackson had deposed Levy on the topic of the field
study, had not sought a supplemental deposition, and failed to identify any information
in the report that took Jackson by surprise.
The next case Jackson cites to show the delay is harmless is Smith v. Tenet
Healthsystem SL, Inc.24 There, plaintiff Smith objected to an expert’s reliance on x-rays
during his trial testimony. The x-rays had not been disclosed in the expert’s report, but
were discussed during his deposition. Given that the x-rays were covered in the
deposition, the court held the omission form the report was harmless.25 This case also
supports Jackson’s argument.
The last case cited by Jackson on this issue is Commonwealth Ins. Co. v. Titan
Tire Corp.26 There, defendant Titan complained about plaintiff’s failure to disclose the
expert opinion of one Robert Ochs. However, as the appellate court explained, Ochs
was the plaintiff’s expert in the underlying lawsuit and Titan had participated in Ochs’
deposition in that case and so he knew the substance of his testimony. The court also
pointed out that Titan knew plaintiff would rely on Ochs expert testimony by virtue of
plaintiff’s interrogatory answers. The facts in Titan are so different from the situation at
bar that the case has no bearing on the motion at hand.
Reduced to its essence, Jefferson’s argument is that the deposition provided an
adequate cure for the failure to timely present the Second Report and associated
436 F.3d 879 (8th Cir. 2006).
Id. at 889.
398 F.3d 879 (7th Cir. 2004).
supporting materials. In its memorandum at docket 110, Bank contends that the late
disclosure was not harmless because its “expert rebuttal deadline has passed and
discovery is now closed.”27 Bank did not file a reply memo (although it did join in
Kritza’s reply). Kritza correctly notes in his opening memorandum that the burden is on
Jefferson to show that the late disclosure was not harmless, citing ninth Circuit case law
on point.28 However, Kritza did not specifically address how the late disclosure harmed
Kritza. Kritza’s reply memo addresses the topic of harm as follows:
While being able to depose Flynn helps, it is not a complete cure to the
prejudice resulting from the untimely disclosure. The biggest problem is
that Kritza has no way to rebut the Second Report under the Court’s
Kritza also makes the point that “the disruption of the scheduling order can hardly be
considered harmless.”30 Kritza goes on to note that disrupting the schedule will
ultimately effect how soon trial may be had and the case resolved.
The court finds that Jefferson’s late disclosure of the Second Report and
supplementary documents was not substantially justified. The court also finds that the
extensive deposition of Flynn taken after disclosure of the late materials obviates most
of the harm to Bank and Kritza. The most significant harm which the deposition does
not eliminate is the opportunity Bank and Kritza should have to secure their own expert
witnesses whose testimony might rebut that of Flynn.
Doc. 110 at 7.
Doc. 108 at 8 (citing Yeti by Molly, 259 F.3d at 1107).
Doc. 145 at 6.
As noted above, Rule 37(c)(1), on which Bank and Kritza primarily rely,
authorizes the court to exercise its discretion to impose sanctions other than exclusion
of evidence. In the exercise of its discretion here, the court is mindful of the fact that
establishing the existence of forgeries is central to Jefferson’s position, and Flynn’s
opinions would support Jefferson’s own testimony that the signatures he disputes are
not his own. Under these circumstances and although the court is not sanguine about
re-opening the pre-trial schedule for the limited purpose of allowing Bank and Kritza to
retain their own (or perhaps a single joint) expert witness to rebut Flynn, that resolution
would eliminate all of the harm from the late disclosures save disruption to the pre-trial
schedule. In order to assure that the parties’ claim s and defenses are decided on the
merits, the court will extend the pre-trial schedule as follows: Bank and Kritza shall have
the opportunity to jointly retain a witness (or if they prefer each to retain a witness) to
rebut Flynn’s report. A rebuttal witness report or reports shall be provided to Jefferson
within 42 days from the date of this order. The rebuttal witness or witnesses shall be
deposed within 56 days from the date of this order. Questioning by Jefferson’s counsel
shall be limited to 2 hours for each (or the single joint) rebuttal witness.
As an appropriate sanction under Rule 37(c)(1) in lieu of excluding Flynn’s
testimony, Jefferson shall pay the reasonable attorney fees incurred by Bank and Kritza
in connection with their motions at docket 108 and 110. The court encourages counsel
to confer and stipulate to the amount of such fees. If counsel cannot agree, then Bank
and Kritza may each file a properly supported motion for fees within 21 days from the
date of this order; Jefferson shall respond within 7 days from the filing of each such
motion; and Bank and Kritza may reply within 7 days from the filing of Jefferson’s
response to its motion. If a motion for attorney fees is made, it may include the attorney
fees associated with preparing the motion for fees itself, as well as the attorney fees
associated with either the motion at docket 108 or the motion at docket 110. If a reply
is filed, the attorney fees associated with the reply may not be included in the total
sought. Jefferson may contest the quantum of, but not the right to recover, attorney
fees in his response.
For the above reasons, the motions at dockets 108 and 110 are DENIED, and
IT IS FURTHER ORDERED:
(1) Jefferson shall pay Bank and Kritza their reasonable attorney fees
incurred in connection with the motions at dockets 108 and 110, and if the
parties cannot agree on the appropriate amount of fees and so advise the
court in a stipulation, Bank and Kritza shall file a motion for attorney fees
within 21 days from the date of this order, Jefferson shall respond within 7
days from the filing of each motion, and Bank and Kritza may reply within
7 days from the filing of the response to its motion;
(2) Bank and Kritza may each retain expert witnesses, or preferably will
jointly retain a single expert witness, to rebut the testimony of William
Flynn and such expert’s or experts’ report(s) shall be provided to Jefferson
within 42 days from the date of this order.
(3) The expert or experts retained by Bank and Kritza may be deposed by
Jefferson within 56 days from the date of this order. Jefferson’s
examination at deposition shall be limited to 2 hours for each expert or the
single joint expert.
DATED this 6th day of August 2015.
JOHN W. SEDWICK
UNITED STATES DISTRICT JUDGE
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