Erickson et al v. ING Life Insurance & Annuity Company

Filing 92

MEMORANDUM DECISION AND ORDER denying 65 Motion to Exclude Martha Tejera as an expert witness for plas. Signed by Judge Edward J. Lodge. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by dks)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO

STEPHANIE ERICKSON, et al.,

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)
Plaintiffs,
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v.
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ING LIFE INSURANCE & ANNUITY, )
COMPANY,
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Defendant.
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________________________________ )

Case No. CV09-204-S-EJL
MEMORANDUM DECISION
AND ORDER

Currently pending is Defendant’s Motion to Exclude Martha Tejera as Expert
Witness for Plaintiffs (Dkt. 65). Having reviewed the briefing, the Court finds that oral
argument is not necessary to assist the Court in deciding the matter and therefore issues the
following Memorandum Decision and Order based on the written materials and the record.
For the reasons set forth below, Defendant’s motion is denied.
BACKGROUND
The background of this litigation has been explained in detail in at least two prior
decisions. (See Dkts. 53, 58, 89). In summary, Plaintiffs in this action are the Trustees
and named fiduciaries of Building Materials Holding Corporation’s (BMHC) BMCC
Employees Savings & Retirement Plan (“the Plan”), and BHMC itself, as the Plan Sponsor
and a Plan fiduciary. Defendant is ING Life Insurance & Annuity Company (“ILIAC”),

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who formerly held invested Plan funds and performed related administrative services.
In early 2008, the Plan terminated its administrative services contract with ILIAC
and replaced ILIAC with Prudential Retirement (“Prudential”). In connection with the
termination, ILIAC was to transfer the Plan funds to Prudential in accordance with the
Plan Trustee’s wire instructions. One of the Plan’s funds, in an amount over $100 million,
was not received by Prudential before 4:00 p.m. on the date of transfer. Accordingly,
Prudential was unable to reinvest the funds into the market on that day which resulted in a
$375,790.16 loss to the Plan. The central issue in this lawsuit is whether ILIAC is
responsible for the loss.
During 2007, the Plan trustees hired Martha Tejeras to oversee the process of
considering whether ILIAC should continue as the record keeper/custodian for the Plan, or
be replaced. Ms. Tejeras assisted in both the selection and transfer of the Plan funds to
Prudential. Plaintiffs have disclosed her as an expert witness under Fed. R. Civ. P.
26(a)(2) based on her technical and specialized knowledge. (Affid. William Hitler (Dkt.
65-2), Exh. B, Plaintiffs’ Expert Disclosure, at 2). Plaintiffs’ Disclosure Statement
provides:
Plaintiffs anticipate that [Ms. Tejeras] will testify regarding industry custom
and practice concerning transfers such as the transfer at issue in this case,
including the industry custom and practice of completing such transfers prior
to 4:00 p.m. eastern time. In addition, Ms. Tejera is expected to testify
regarding her calculation of plaintiffs’ damages, which has been previously
produced.
(Id.) It further provides that Ms. Tejera was not retained or specially employed to provide

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an expert opinion, and not an employee of any party who’s duties involve giving expert
testimony. Accordingly, no written report is required or would be provided, citing Rent
Information Technology, Inc., v. Home Depot USA, Inc., 2008 WL 538916, at 3 (9th Cir.
2008). (See id.)
Defendant moves to exclude Ms. Tejeras as an expert witness on the basis that she
has no specialized knowledge or experience in mechanical aspects of wire transferring
funds, admitted she was unfamiliar with the terms of the services contract that governed
the payment of funds and has not provided any “legitimate methodology” to support her
opinion.1
ANALYSIS
Whether Martha Tejeras may testify at trial is addressed under the well-known
standard first enunciated in Daubert and its progeny, but now set forth in Rule 702 of the
Federal Rules of Evidence. Rule 702 establishes several requirements for permitting
expert opinion. First, the evidence offered by the expert must assist the trier of fact either
to understand the evidence or to determine a fact in issue. Primiano v. Cook, 598 F.3d 558,
563 - 64 (9th Cir. 2010); Fed. R. Evid. 702. “The requirement that the opinion testimony
assist the trier of fact goes primarily to relevance.” Id. at *4 (Internal quotations and
citation omitted).
Additionally, the witness must be sufficiently qualified to render the opinion. Id. at

1

Defendant does not appear to take any issue with Ms. Tejeras’s testimony
regarding her calculation of Plaintiff’s damages.

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*3. If specialized knowledge will assist the trier of fact to understand the evidence or
determine a fact in issue, a witness qualified by knowledge, skill, experience, training or
education may offer expert testimony where: (1) the opinion is based upon sufficient facts
or data, (2) the opinion is the product of reliable principles and methods; and (3) the
witness has applied those principles and methods reliably to the facts of the case. Fed. R.
Evid. 702; Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 592-93 (1993); Kumho
Tire Co. v. Carmichael, 526 U.S. 137, 147 (1999).
The inquiry is a flexible one. Primiano, 598 F.3d at 564. Ultimately, a trial court
must “assure that the expert testimony both rests on a reliable foundation and is relevant to
the task at hand.” Id. (Internal quotation and citation omitted). “Shaky but admissible
evidence is to be attacked by cross examination, contrary evidence, and attention to the
burden of proof, not exclusion.” Id.
Ms. Tejeras has worked in the field of retirement plans since 1981. (See Decl. of
Martha Tejera, (“Tejera Decl.”) (Dkt. 68-3), ¶ 11). In that last 10 years, her work has
included a substantial amount of time helping plan sponsors evaluate and select
recordkeepers and custodians. (Id. at ¶¶ 2, 3, 5, 11). During this time period she has
assisted with the transition from one recordkeeper to another on approximately 30
occasions. (Id. at ¶ 12).

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The Court finds the Ms. Tejeras has the minimal qualifications necessary to offer
expert testimony on the subject of the industry standard or custom with respect to the
timing of wire transfers in the context of transitioning from one record keeper/custodian to
another. The Court disagrees that an absence of knowledge on the mechanical aspects of a
wire transfer renders her unqualified. The record shows that she has sufficient experience
regarding the industry practice in transferring assets from one recordkeeper/custodian to
another to offer her opinion on the matter of timing based on her experience. To the extent
mechanical expertise on wire transfers would be germane to the topic, “[a] lack of
specialization affects the weight of the expert’s testimony, not its admissibility.” In re
Silicone Gel Breast Implants Products Liability Litigation, 318 F.Supp.2d 879, 889 (C.D.
Cal. 2004) (citing Holbrook v. Lykes Bros. S.S. Co., 80 F.3d 777, 782 (3d Cir. 1996)); see
also Hendrix v. Evenflo Company Inc., 255 F. R.D. 568, 578 (N.D. Fla. 2009) (Noting so
long as expert is minimally qualified, gaps in qualifications go toward weight of expert’s
testimony.)
The Court also finds that the remainder of Defendant’s objections to Ms. Tejeras’s
testimony, e.g., lack of familiarity with the governing contract provisions, her conflict of
interest, the lack of documentation substantiating a specific deadline for a transfer, that she
disregards the fact that the transferring recordkeeper/custodian has no control over when
the funds reach the recipient, also go toward its weight and not its admissibility under the
circumstances of this case.

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Finally, Defendant also argues that the industry custom or standard is not relevant
because the express terms of the contract govern this issue. Currently pending for review is
the Report and Recommendation on Defendant’s motion for summary judgment which
recommends denying Defendant’s motion in part on the issue of (Dkt. 89). Should the
Court adopt the Report and Recommendation, whether evidence of the industry custom or
standard will come into evidence at trial will be an open question that decided in the
context of the trial. Accordingly, the issue of relevance is premature.
In conclusion, Ms. Tejeras anticipated testimony appears to be potentially relevant
to the issues at trial at this time, useful to assist the triers of fact in understanding the issues
and she appears minimally qualified to render her opinions based on her experience.
ORDER
For the foregoing reasons,
IT IS HEREBY ORDERED that Defendant’s Motion to Exclude Martha Tejera As
An Expert Witness for Plaintiffs (Dkt. 65) is DENIED.
DATED: September 29, 2011

Honorable Edward J. Lodge
U. S. District Judge

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