Regions Bank v. Kaplan et al

Filing 809

ORDER denying 555 Motion in Limine to Strike or Exclude Testimony and Report of Paul A. Carrubba. Signed by Judge Elizabeth A. Kovachevich on 3/24/2017, nunc pro tunc April 17, 2016. (JM)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
REGIONS BANK, etc.,
Plaintiff,
v.

CASE NO. 8:12-CV-1837-T-17MAP

MARVIN I. KAPLAN, etc., et al.,
Defendants.

ORDER

This cause is before the Court on:
Dkt. 541-43 Affidavit of Paul A. Carrubba
Dkt. 555
Motion to Strike or Exclude Testimony and Report of
Wells Fargo’s Purported Expert, Paul Carrubba (Kaplan Parties)
Dkt. 556
Notice of Filing Expert Report of Paul Carrubba
Dkt. 572
Response in Opposition (Wells Fargo Bank, N.A.)
Crossclaim Plaintiffs Marvin I. Kaplan, R1A Palms, LLC, Triple Net Exchange,
LLC, MK Investing, LLC and BNK Smith, LLC (“Kaplan Parties”) move to exclude from
evidence the testimony and report of Crossclaim Defendant Wells Fargo, N.A.’s expert,
Paul Carrubba.
Crossclaim Plaintiffs argue that the opinions of Paul Carrubba should be
excluded because the opinions are legal conclusions presented as expert opinions.
Paul Carrubba has provided an opinion on two issues: 1) Wells Fargo, N.A.
returned the checks at issue according to reasonable banking standards and in
accordance with the time frames set forth by law, and 2) whether using “Refer to maker”
as a return reason was proper and in accordance with commercial banking standards.

Case No. 8:12-CV-1837-T-17MAP

Crossclaim Defendant Wells Fargo, N.A. responds that the opinions of Paul
Carrubba, that Well Fargo timely returned the WFB Replacement Checks and that
Wells Fargo’s use of RTM as a return reason was in accordance with reasonable
commercial standards, are opinions regarding ultimate facts, based on Mr. Carrubba’s
experience in the banking industry.
I. Standards - Fed. R. Ev. 702 and Daubert
The district court serves as a gatekeeper to the admission of scientific testimony.
Daubert v. Merrell Dow Pharms.. Inc.. 509 U.S. 579, 589 (1993). The district court has
the same responsibility when the court is presented with a proffer of expert technical
evidence or other specialized knowledge. Kumho Tire Co. v. Carmichael. 526 U.S.
137,147(1999).

The district court considers whether:
1. The expert is qualified to testify competently regarding the matters he
intends to address;
2. The methodology by which the expert reaches his conclusions is
sufficiently reliable as determined by the sort of inquiry mandated in
Daubert: and
3. The testimony assists the trier of fact, through the application of
scientific, technical or specialized expertise, to understand the evidence or
to determine a fact in evidence.
See Quiet Technology DC-8. Inc. v. Hurel-Dubois. U.K. Ltd.. 326 F. 3d 1333,1340-41
(11th Cir. 2003). The Court’s inquiry into the expert’s qualifications, the reliability of the
proffered opinion and the helpfulness of that opinion overlap each other; however,
these are distinct concepts. United States v. Frazier. 387 F.3d 1244,1260 (11th Cir.
2004). “The burden of laying the proper foundation for the admission of the expert
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Case No. 8:12-CV-1837-T-17MAP
testimony is on the party offering the expert, and admissibility must be shown by a
preponderance of the evidence.” Allison v. McGahan Med. Corp.. 184 F.3d 1300,1306
(11th Cir. 1999).
“While scientific training or education may provide possible means to qualify,
experience in a field may offer another path to expert status.” Frazier. 387 F.3d at
1260-61. Fed. R. Ev. 702 provides that expert status may be based on “knowledge,
skill, experience, training or education.” “[I]f the witness is relying solely or primarily on
experience, then the witness must explain how that experience leads to the conclusion
reached, why that experience is a sufficient basis for the opinion, and how that
experience is reliably applied to the facts, id. (citing Committee Note to the 2000
Amendments of Rule 702).
A qualified expert, however, must still offer reliable testimony. See Quiet Tech..
326 F.3d at 1341-42. “When evaluating the reliability of scientific expert opinion, the
trial judge must assess ‘whether the reasoning or methodology underlying the testimony
is scientifically valid and whether that reasoning or methodology properly can be
applied to the facts in issue.’” Frazier. 387 F.3d at 1261-62 (quoting Daubert. 509 U.S.
at 592-93). In ascertaining the reliability of a particular scientific expert opinion, the
Court considers, to the extent possible: 1) whether the expert’s theory can be and has
been tested; 2) whether the theory has been subjected to peer review and publication;
3) the known or potential rate of error of the particular scientific technique; and
4) whether the technique is generally accepted in the scientific community...
[Tjhese factors do not exhaust the universe of considerations that may bear on the
reliability of a given expert opinion, and a federal court should consider any additional
factors that may advance its rule 702 analysis. ]d at 1262.
The district court must determine whether the proposed testimony is sufficiently
relevant. Expert testimony is considered relevant when “it logically advances a material
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Case No. 8:12-CV-1837-T-17MAP
aspect of the proposing party’s case.” Allison v. McGhan Med. Corp.. 184 F.3d 1300,
1312 (11th Cir. 1999)(quotations and citation omitted).

It is not the role of the district court to make ultimate conclusions as to the
persuasiveness of the proffered evidence. “A district court’s gatekeeper role under
Daubert is not intended to supplant the adversary system or the role of the jury.” Maiz
v. Verani. 253 F.3d 641, 666 (11th Cir. 2001). “Vigorous cross-examination,
presentation of contrary evidence, and careful instruction on the burden of proof are the
traditional and appropriate means of attacking shaky but admissible evidence.” Daubert
v. Merrell Dow Pharmaceuticals. 509 U.S. 579 (1993).

II. Discussion

1. Qualified to Testify
The Expert Report identifies Mr. Carrubba’s education and experience, the
publications to which Mr. Carrubba has contributed, and the cases in which Mr.
Carrubba has given trial or deposition testimony within the last five years.
After consideration, the Court finds that Mr. Carrubba is qualified to testify based
on his education, training and experience.

2. Methodology is Reliable
Crossclaim Defendant Wells Fargo, N.A. argues that Fed. R. Ev. 702
contemplates the admission of expert testimony by experts whose knowledge is based
on experience. Expert testimony as to standard practices in an industry is admissible
when it is relevant and the expert has demonstrated a basis for the opinion. See United
States v. Frazier. 387 F.3d 1244,1260-61,1298 (11th Cir. 2004). When the relevant
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Case No. 8:12-CV-1837-T-17MAP
professional practices and standards have been shaped by the law, as is true in the
banking industry, the expert may refer to legal principles or assumptions in order to
place his opinions in context. See Travelers Indemnity Co. of Illinois v. Roval Oak
Enterprises. Inc.. 2004 WL 3770571 at *2 (M.D. Fla. Aug. 20, 2004).
Mr. Carrubba has testified that the proposed Commentary relied on by the
Kaplan Parties was never adopted, that it was vehemently opposed by the banking
industry at large, and that the current Commentary was the operative law at the time
that Wells Fargo returned the WFB Replacement Checks. Mr. Carrubba has applied
his specialized experience to the facts and circumstances surrounding the transactions
at issue, and reached distinct conclusions regarding Wells Fargo’s compliance with
“prudent banking practices.”
The opinions at issue are not scientific opinions and do not apply scientific
techniques or theories; the Daubert factors as to reliability are not helpful in determining
the reliability of the methodology.

However, Wells Fargo has shown that Mr.,

Carrubba’s opinions are grounded in banking law and practical knowledge of the
banking industry.
After consideration, the Court finds that the methodology of Mr. Carrubba is
sufficiently reliable.
3. Opinions Will Assist Trier of Fact
Wells Fargo argues that expert opinions regarding custom and practice in a
certain industry should not be excluded simply because they reference statutes and
regulations. See Travelers Indemnity Co. of Illinois v. Roval Oak Enterprises. Inc.. 2004
WL 3770571 at *2 (M.D. Fla. Aug. 20, 2004).

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Wells Fargo argues that Kaplan Parties have admitted that Wells Fargo returned
the WFB Replacement Checks before the midnight deadline (Dkt. 553 at p. 4);
however, Kaplan Parties have asserted that Wells Fargo’s return of the WFB
Replacement Checks was untimely due to alleged invalid return reason, RTM.

Wells Fargo argues that Mr. Carrubba’s specialized knowledge regarding the
standards of care applicable to payor banks, the banking industry’s interpretation and
treatment of Regulation CC Commentary, and the character and purpose of the RTM
return reason will assist the Court in understanding the evidence and resolving the
ultimate fact disputes in this case.
After consideration, the Court finds that the testimony and opinions of Mr.
Carrubba are relevant, and would assist the Court in understanding the evidence and
resolving a disputed issue of fact in this case. Accordingly, it is

ORDERED that the Motion to Strike or Exclude Testimony and Report of
Wells Fargo’s Purported Expert, Paul Carrubba, (Dkt. 555) is denied.

DONE and ORDERED in Chambers in Tampa, Florida on this J ^ ^ ftavST
March, 2017. nunc pro tunc April 17, 2016.

All parties and counsel of record

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