OWENS et al v. STIFEL NICOLAUS & COMPANY INC
Filing
189
ORDER denying #108 Motion in Limine; deferring ruling on #109 Motion in Limine; denying #110 Motion in Limine; denying #111 Motion in Limine; granting #112 Motion in Limine; deferring ruling on #113 Motion in Limine; granting #114 Motion in Limine; deferring ruling on #115 Motion in Limine; granting #116 Motion in Limine; finding as moot #120 Motion in Limine; deferring ruling on #127 Motion in Limine; denying in part and reserving ruling in part #129 Motion in Limine; granting #132 Motion to Introduce Witness Testimony by Skype; granting in part and denying in part #155 Motion to Amend/Correct. Ordered by U.S. District Judge HUGH LAWSON on 10/30/2014. (nbp)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
VALDOSTA DIVISION
SUSAN ROCKETT, Individually and
as the Administrator for the
ESTATE OF ANDREW T. FULLER,
and as the Executrix of the
ESTATE OF MARTHA F. OWENS,
Plaintiffs,
Civil Action No. 7:12-CV-144 (HL)
v.
STIFEL, NICOLAUS & COMPANY,
INC. and ANTHONY JOHN FISHER,
Defendants.
ORDER
A pretrial conference was held in this case on October 24, 2014. During
the conference, several pending motions were heard. The Court enters the
following order on those motions.
I.
Plaintiffs’ Motion to Add Exhibits to the Pre-Trial Order (Doc. 155)
Plaintiffs move to append their exhibit list to include two recently
discovered police reports. The police reports allegedly were made at some point
in 2006 and relate to reported incidents of domestic violence between Defendant
Anthony Fisher and his wife. The reports further suggest that Fisher was
employed by Defendant Stifel in 2006. Throughout the course of this litigation,
Stifel has asserted that the firm did not hire Fisher until 2009. The Court opines
that the only potential relevance these reports may have may be for the purpose
of impeaching Stifel’s testimony regarding Fisher’s dates of employment. The
introduction of this evidence shall be limited to the employment information listed
on the report. Plaintiffs shall properly redact the documents to exclude the
irrelevant portions. To that extent, Plaintiffs’ motion is granted.
II.
Plaintiffs’ Motion to Introduce Witness Testimony at Trial Via Skype
(Doc. 132)
Plaintiffs seek permission to take the testimony of Steve Fried at trial via
Skype or some other internet based electronic conferencing system. Mr. Fried
resides in Las Vegas, Nevada. While Mr. Friend previously confirmed with
Plaintiffs that he would be available for trial, on the eve of trial, Mr. Fried’s
attorneys advised him not to appear. However, his attorneys have informed
Plaintiffs’ attorneys that Mr. Fried is available electronically. Defendant objects to
the introduction of remote testimony on the ground the Plaintiffs have failed to
meet the Rule 43 requirement of “good cause in compelling circumstances” to
permit remote testimony during the course of the trial. Fed.R.Civ.P. 43(a).
Recognizing that courts are moving into a more technologically advanced
world, and realizing that the Court’s subpoena powers do not extend to Las
Vegas, the Court grants Plaintiffs’ motion to implement remote testimony at trial.
Plaintiffs have tested the electronic system in the courtroom and assure the
Court that testimony of this nature is feasible. The Court expects the testimony to
be presented smoothly and without interruption. In the event of a technological
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failure or glitch, Plaintiffs will forfeit the opportunity to engage in the examination
of this witness. Both parties will provide any exhibits they plan to utilize to the
witness in advance of his testimony. The parties shall take head to limit the
number of documents to prevent any delays or confusion.
III.
Plaintiffs’ Motion in Limine to Prohibit Any Reference to Defendant
Being Deprived of Commissions (Doc. 129)1
Plaintiffs argue that Defendant should be precluded from introducing
evidence that Stifel earned no commissions from Plaintiffs’ investment in Cardiac
Networks, Inc. because that information is not relevant. Defendant responds that
the fact that Defendant earned no fees when Plaintiffs transferred funds from
their Stifel accounts to invest in Cardiac Network, Inc. is relevant to (1) whether
Fisher acted as Defendant’s agent in assisting Plaintiffs in wiring money out of
their Stifel accounts; (2) whether Stifel ratified Fisher’s actions; and (3) Plaintiffs’
expert’s testimony that Fisher’s past production history indicated a desperation
for commissions that should have been a red flag to Defendant that Fisher was
likely to engage in high-risk trading activity. The Court agrees that this evidence
may be relevant to the question of agency and to whether or not Defendant
ratified the acts of its agent. Accordingly, this motion is denied.
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Plaintiffs’ filed their motions in limine two times, apparently to correct the
omission of certain exhibits. (Doc. 120, 129). The Court denies the initial filing as
moot. (Doc. 120).
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IV.
Plaintiffs’ Motion in Limine to Preclude Any Reference to Plaintiffs’
Financial Circumstances (Doc. 129)
Plaintiffs seek to exclude any reference to the individual Plaintiffs’ net
worth as irrelevant and prejudicial. Defendant asserts that evidence Plaintiffs’
financial circumstances is relevant to counter Plaintiffs’ characterization of
themselves as unsavvy investor. This motion is denied.
V.
Plaintiffs’ Motion in Limine to Prohibit Any Reference to Michael
Mazor’s Good Character (Doc. 129)
The Court denies Plaintiffs’ motion to prevent the introduction of evidence
relating to Michael Mazor’s good character. To the extent that Plaintiffs call
Mazor’s character, or the character of any other witness, into question,
Defendant shall be permitted to introduce evidence to rehabilitate the character
of the witness.
VI.
Plaintiffs’ Motion in Limine to Bar Defendant from Taking Any
Position Contrary to Those Taken in its 30(b)(6) Deposition (Doc. 129)
Plaintiffs ask the Court to limit any testimony offered by Michael Mazor,
Defendant’s 30(b)(6) deposition witness, to the testimony given by Mazor in the
course of his deposition. The Court reserves ruling on this motion. The Court will
consider any objections to Mazor’s testimony has they may arise at trial.
VII.
Defendant’s Motion in Limine to Exclude Evidence Regarding Tube
Media and Banneker Inc. (Doc. 108)
Following Fisher’s termination, Defendant conducted an inspection of
Fisher’s office and discovered paperwork relating to Plaintiffs and Cardiac
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Network, Inc. Defendant also unearthed documentation evidencing the possibility
of other alleged outside business activity by Fisher, including Fisher’s dealings
with Tube Media and Banneker, Inc., both companies in which David Levy, who
currently is serving a prison sentence for his part in running known pump and
dump schemes, allegedly was involved. Defendant gathered these documents
and sent them to their legal department. Defendant asks the Court to prevent
Plaintiffs from introducing these documents to the jury, arguing that the
documents cannot be authenticated. Defendant further argues that any line
drawn between Levy and Defendant through the presentation of these
documents could cause the jury to extrapolate the existence of a larger
conspiracy and would be extremely prejudicial to Defendant.
Plaintiffs respond that they are not seeking to introduce this evidence for
their truth but rather to show the extent to which Fisher was engaging in conduct
of which Defendant should have been aware. Plaintiffs argue that Defendant
made the documents relevant when they boxed the paperwork and sent it to
Defendant’s legal department in St. Louis.
To the extent that Plaintiffs seek to introduce the documents as evidence
of negligent hiring and supervision, Defendant’s motion is denied.
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VIII.
Defendant’s Motion in Limine to Exclude Evidence Regarding Penny
Stocks and Suitability (Doc. 109)
Plaintiffs consent to Defendant’s motion to exclude evidence of penny
stocks and suitability as it relates to the Court’s prior ruling on Plaintiffs’ expert’s
ability to offer such testimony. However, Plaintiffs seek to introduce evidence of
penny stocks as evidence of the procedures Defendant had in place to limit the
sale of penny stocks and Defendant’s alleged failure to properly supervise
Fisher, who encouraged Plaintiffs to invest their funds in ventures that allegedly
were inappropriate for them and their circumstances. The Court wants to hear
the evidence prior to making a final determination about the relevance and
admissibility this evidence. Accordingly, the Court reserves ruling on the motion.
IX.
Defendant’s Motion in Limine to Exclude Evidence Regarding NonParties’ Investments in Cardiac Network, Inc. (Doc. 110)
Defendant asks the Court to exclude evidence that other Stifel client’s
invested in Cardiac Network, Inc. through Fisher. In the course of discovery,
Defendant identified twelve other known Stifel clients who invested in Cardiac
Network, Inc. Defendant argues that evidence of these non-parties’ investment
does not make it any more or less probable that Defendant was negligent or that
Fisher defrauded Plaintiffs. According to Defendant, parallels cannot be drawn
between any advice offered by Fisher to these non-parties and Plaintiffs. What
these other investors did or did not know in relation to their personal investments
has no bearing on what Plaintiffs’ knew, thought, or did.
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Plaintiffs state that evidence of these others investors is relevant to
Plaintiffs’ negligent retention and supervision claims. To the extent that Ms.
Rockett can confirm that Fisher used the same sales pitch to lure her and her coPlaintiffs into investing in Cardiac Network, Inc. as he employed with other
investors, the evidence also may go to Plaintiffs’ fraud claims.
Defendant’s motion is denied.
X.
Defendant’s Motion in Limine to Exclude Any Speculative Testimony
or Evidence of Plaintiffs’ Alleged Damages (Doc. 111)
The Court denies Defendant’s motion, finding that Plaintiffs’ damages are
not speculative in nature and can be ascertained easily through lay testimony.
XI.
Defendant’s Motion in Limine to Exclude Certain Testimony from
Gregory Wood (Doc. 112)
The parties do not contest this motion. Accordingly, Defendant’s motion to
exclude certain testimony of Gregory Wood, Plaintiff’s expert witness, is granted.
XII.
Defendant’s Motion in Limine to Exclude Plaintiffs’ Audio Tapes (Doc.
113)
Plaintiffs
produced
nine
CDs
containing
recordings
of
alleged
conversations between Martha Owens, Susan Rockett, and Anthony Fisher.
Defendant seeks to exclude these recordings, which Defendant claims cannot be
authenticated because Plaintiffs have been unable to produce the originals and
because the copies have been modified and appended. Plaintiffs explain that
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they only wish to introduce a single, 18-minutes recording, which they claim has
been unaltered.
The Court reserves ruling on this motion until trial. In the meantime, the
Court orders Plaintiffs to inform Defendant of the exact recording Plaintiffs intend
to introduce at trial. The Court further orders the parties to listen to the recording
together and to determine whether they can stipulate to its admission.
XIII.
Defendant’s Motion in Limine to Exclude Defendant Anthony Fisher’s
Invocation of His Fifth Amendment Rights (Doc. 114)
At the time of the pretrial conference, the Court reserved ruling on this
motion. After reviewing the parties’ written submissions and conducting additional
research, the Court grants Defendant’s motion.
On March 15, 2013, prior to being named a Defendant in this action,
Anthony Fisher agreed to appear for a deposition. (Doc. 114-1). Fisher offered
very little useful testimony during the course of his succinct deposition. Upon
Plaintiffs’ counsel inquiring about Fisher’s educational background, Fisher
replied, “From here on out, I am going to on every question that you are going to
be asking, I am going to be respectfully declining to answer the questions by
asserting my rights and privileges under the Fifth Amendment of the U.S.
Constitution.” (Doc. 114-1, p. 3). Plaintiffs’ counsel followed up by inquiring
whether Fisher would assert his Fifth Amendment privilege to any additional
questions. Fisher replied in the affirmative, and the deposition quickly ended.
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Defendant challenges the admissibility of Fisher’s invocation of the Fifth
Amendment on the grounds that Fisher’s testimony is irrelevant, that Plaintiffs
failed to establish the requisite foundation for using such evidence, and that
Fisher’s invocation is unreliable and the probative value of the statement’s
admission is substantially outweighed by the dangers of misleading the jury.
According to Defendant, if Fisher’s statement is admitted there is a risk that (1)
the jury will be confused because Fisher will not be present during the trial and
(2) Defendant will be unfairly prejudiced.
In civil cases, the Supreme Court has held that “the Fifth Amendment does
not forbid adverse inferences against parties . . . when they refuse to testify in
response to probative evidence offered against them.” Baxter v. Palmigiano, 425
U.S. 308, 318 (1976). When remaining silent in the face of an accusation, an
inference may be drawn that the party’s silence is indicative of the reliability of
the adverse inference drawn against him “if it would have been natural under the
circumstances to object to the [accusation] in question.” Id. at 319. The
implication is that the party by pleading the Fifth Amendment seeks to avoid
criminal liability. See FDIC v. Attorneys’ Title Ins. Fund, Inc., 2014 U.S. Dist.
LEXIS 126471 (S.D. Fla. Sept. 3, 2014).
The problem with Plaintiffs’ pursuit to enter evidence of Fisher’s invocation
of his Fifth Amendment privilege is that there is no substance to Fisher’s
testimony. Fisher invoked the privilege in response to one question asked by
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Plaintiffs’ counsel. That question related to Fisher’s educational background,
which has no bearing on this case. “The Fifth Amendment privilege against
compulsory self-incrimination must be claimed . . . with respect to particular
questions. Anglada v. Sprague, 822 F.2d 1035, 1037 (11th Cir. 1987). The
problem with a witness like Fisher making a “blanket” refusal to provide any
testimony is that “it forces the reviewing court to speculate as to which questions
would tend to incriminate.” Id. (citing United States v. Malnik, 489 F.2d 682, 685
(5th Cir. 1974), cert. denied, 419 U.S. 826 (1974)). It was counsel’s prerogative
here not to ask additional questions of Fisher and await his response. However,
the outcome is that the testimony Plaintiffs did procure from Fisher is irrelevant
and shall not be permitted at trial.
XIV. Defendant’s Motion in Limine to Exclude the Testimony of Zev Helfer
and Testimony Regarding an Unrelated Fraudulent Scheme
Committed by Non-Parties David Levy, Donna Levy, and Fortis
Georgiadis (Doc. 115)
The Court reserves ruling on this motion. The Court wishes first to see how
the evidence develops at trial before ruling on the relevance and admissibility of
evidence pertaining to Zev Helfer, David Levy, Donna Levy, and Fortis
Georgiadis.
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XV.
Defendant’s Motion in Limine Regarding Anthony Fisher’s Arrest for
Domestic Battery (Doc. 116)
The Court grants Defendant’s motion to preclude any evidence of Fisher’s
past arrest for domestic battery. Evidence of Fisher’s domestic disputes is
irrelevant to the case at hand.
XVI. Defendant’s Motion in Limine to Exclude Plaintiffs’
Testimony Concerning Martha Owens (Doc. 127)
Hearsay
The parties previously agreed that because Ms. Owens was unable to be
deposed, Ms. Owens likewise would be precluded from testifying at trial. Ms.
Owens subsequently passed away. Consistent with that prior agreement,
Defendant seeks to exclude any hearsay testimony regarding Ms. Owens.
Plaintiffs wish to use testimony of conversations between Ms. Owens and Ms.
Rockett to explain Ms. Rockett’s conduct.
The Court reserves ruling on this motion for trial. However, the Court here
holds that hearsay testimony of Ms. Owens will not be permitted in the absence
of some exception to the hearsay rule.
XVII. Other Matters
Counsel for Plaintiffs and Defendant are ordered to meet in Macon,
Georgia on Monday, October 27, 2014, in order to confer about proposed
exhibits and the use of deposition transcripts. The Court will make the jury room
available. The Court expects the attorneys to narrow down the evidence the
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parties actually plan to introduce at trial and to report back to the Court about the
evidence to which they are able to stipulate.
SO ORDERED this 30th day of October, 2014.
s/ Hugh Lawson_______________
HUGH LAWSON, SENIOR JUDGE
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