Matthew Focht Enterprises, Inc. v. Lepore

Filing 72

OPINION AND ORDER that Defendant's June 11, 2014, expert report shall be excluded, and Krasnosky shall not be permitted to testify as to its contents. IT IS FURTHER ORDERED that Defendant, on or before Noon on July 21, 2014, may submit a suppl emental expert report concerning the total surcharge commission damages claimed to be owed to Defendant, utilizing the methodology contained in Krasnosky's November 2013, supplemental report. IT IS FURTHER ORDERED that the Court will, at the p retrial conference set for July 22, 2014, consider Krasnosky's qualifications under Federal Rule of Evidence 702, whether Krasnosky should be entitled to provide the various opinions stated in his initial expert report and whether a Daubert hearing is required for the Court to determine the scope of Krasnosky's testimony at trial, if he is allowed to testify. Signed by Judge William S. Duffey, Jr on 7/16/2014. (anc)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
MATTHEW FOCHT
ENTERPRISES, INC., a Georgia
corporation,
Plaintiff,
v.

1:12-cv-4479-WSD

MICHAEL LEPORE, an individual,
Defendant.
OPINION AND ORDER
On or about June 21, 2013, Michael Lepore (“Defendant”) disclosed his
expert witness, Donald Krasnosky (“Krasnosky”) to Matthew Focht Enterprises,
Inc. (“Plaintiff”) and provided Plaintiff with Krasnosky’s initial expert report. On
July 19, 2013, the Court ordered Plaintiff to produce its Merchant Statements to
Defendant in order to provide Krasnosky the opportunity to review a sampling of
the statements and prepare a report calculating the commissions based upon the
information contained in the sampling. (Transcript of July 19, 2013, Proceeding,
at 24 [35]). On December 5, 2013, the Court ordered that Krasnosky be provided
access to all the Merchant Statements.
On June 11, 2014, Defendant provided Plaintiff with Krasnosky’s
supplemental expert report. On July 11, 2014, Plaintiff filed its Emergency Motion

for an Order Allowing It to File an Out of Time Daubert Motion [65] (“Emergency
Motion”). Plaintiff’s Emergency Motion asserted that Krasnosky altered the
methodology he used to calculate surcharge commissions between his November
2013, supplemental report and the June 11, 2014, supplemental report. Plaintiff
also asserted that Krasnosky’s recent supplemental report included a calculation of
qualified rate commissions, an area not addressed in Krasnosky’s earlier reports.
On July 14, 2014, the Court ordered [67] Defendant to show cause why the
June 11, 2014, supplemental report should not be excluded pursuant to Federal
Rule of Civil Procedure 37(c)(1). On July 15, 2014, Defendant filed his Response
to Order to Show Cause [68] (“Response”), asserting that the delay in preparing
the supplemental report was cause by Plaintiff’s delay in providing the Merchant
Statements.
A review of Krasnosky’s reports shows that Krasnosky altered his
methodology for calculating surcharge commissions. In his November 2013,
supplemental report, Krasnosky calculated the surcharge commissions using the
sum of all surcharges listed contained in the Interchange Charges section of the
sample of Merchant Statements provided. (Doc. 65-3 at p. 4, n.4). In the June 11,
2014, supplemental report, Krasnosky calculated the surcharge commissions using
the sum of all the line items that were not designated as “cleared” transactions

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from the total of the surcharges contained in the Interchange Charges section.
(Doc. 65-4 at p. 7). A review of Krasnosky’s reports also confirms that only the
recent June 11, 2014, supplemental report addresses qualified rate commissions
owed to Defendant.
Defendant, while entitled to provide a supplemental expert report containing
a full calculation of damages based upon the Merchant Statements, was not entitled
to have its expert revise the earlier established methodology for calculating
damages. Defendant was also not entitled to have Krasnosky opine on the
qualified rate commissions. Krasnosky could have referenced these commissions,
and his method of calculating them, in his November 2013, supplemental report,
but failed to do so.
For the foregoing reasons,
IT IS HEREBY ORDERED that Defendant’s June 11, 2014, expert report
shall be excluded, and Krasnosky shall not be permitted to testify as to its contents.
IT IS FURTHER ORDERED that Defendant, on or before Noon on July
21, 2014, may submit a supplemental expert report concerning the total surcharge
commission damages claimed to be owed to Defendant, utilizing the methodology
contained in Krasnosky’s November 2013, supplemental report.

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IT IS FURTHER ORDERED that the Court will, at the pretrial conference
set for July 22, 2014, consider Krasnosky’s qualifications under Federal Rule of
Evidence 702, whether Krasnosky should be entitled to provide the various
opinions stated in his initial expert report and whether a Daubert hearing is
required for the Court to determine the scope of Krasnosky’s testimony at trial, if
he is allowed to testify.

SO ORDERED this 16th day of July, 2014.

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