Swendsen et al v. Corey et al

Filing 139

MEMORANDUM DECISION AND ORDER denying 99 Motion in Limine. Signed by Judge B. Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by cjm)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO

SEAN MICHAEL SWENDSEN,
Individually as a Remainder Beneficiary
of and Derivatively on behalf of the
Richard I. Swendsen Trust,
Plaintiff,

Case No. 4:09-cv-229-BLW
MEMORANDUM DECISION AND
ORDER

v.
RICHARD I. COREY, Trustee of the
Richard I. Swendsen Trust; and
CLAYNE I. COREY, an Individual in
possession of assets of the Richard I.
Swendsen Trust and accountant and
attorney to the Trust and Trustee,
Defendant.

INTRODUCTION
The Court has before it Plaintiff’s Motion in Limine Objecting to Designated
Expert Witness Mark Anderson (Dkt. 99). The motion is fully briefed and at issue. For
the reasons expressed below, the Court will DENY the Motion in Limine.
LEGAL STANDARD
Whether and to what extent Mark Anderson 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

MEMORANDUM DECISION AND ORDER - 1

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 (9th Cir. 2010); Fed. R. Evid. 702. “The requirement that the opinion
testimony assist the trier of fact goes primarily to relevance.” Id. at 564 (internal
quotations and citations omitted).
Additionally, the witness must be sufficiently qualified to render the opinion. Id.
at 563. 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 Pharmaceuticals, 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). In determining whether
expert testimony is reliable and relevant, the Court must determine “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.” Boyd v. City
and County of San Francisco, 576 F.3d 938, 945 (9th Cir. 2009) (internal citation
omitted). Finally, a review of the case law after Daubert reveals that exclusion of expert
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testimony is the exception rather than the rule. Fed. R. Evid. 702, Adv. Comm. Notes
(2000).
ANALYSIS
Sean Swendsen asks the Court to exclude the testimony of Richard Corey’s expert,
Mark Anderson. Swendsen argues that: (1) Anderson’s conclusions are unreliable; (2) his
opinions are not relevant; and (3) he is unqualified to offer such opinions. Pl.’s Br. at 3-7,
Dkt. 99.
In making his first argument, Plaintiff maintains that Anderson’s conclusions are
unreliable because his report does not utilize Plaintiff’s suggested analysis of Richard
Corey’s loan and investment decisions. Id. at 3. Specifically, Plaintiff faults him for not
applying the “higher standard of a prudent man standard,” and for failing to provide data
on “investment alternatives.” Id. Anderson’s report, however, reveals a thorough
analysis of the aforementioned loans and investment decisions. See Anderson Expert
Report ¶ 9, Dkt. 99-1. His report lists eight objective criteria he used in evaluating the
reasonableness of each loan and investment decision. These factors include sufficiency
of note documentation, collateral, subordination, payment period, frequency of payments,
balloon payments, default provisions, and stated interest rate for loan. Id. He then
analyzes each loan and investment decision using the listed criteria and draws a
conclusion based on this analysis. Id. at ¶¶ 10-27. Where peer review and publication are
absent, an expert “must explain precisely how they went about reaching their conclusion
and point to some objective source.” Daubert v. Merrell Dow Pharmaceuticals, Inc.
MEMORANDUM DECISION AND ORDER - 3

(Daubert II), 43 F.3d 1311, 1319 (9th Cir. 1995). Here, the Court recognizes Anderson’s
transparent criteria and systematic analysis as a reliable method. While the Plaintiff
disagrees with the conclusions proffered in Anderson’s report, these disagreements go to
the weight to be accorded to Anderson’s testimony, not its admissibility.
Swendsen also argues that this case is focused on the “prudence” of Richard
Corey’s investments during his time as trustee, so Anderson’s market valuation analysis is
irrelevant. Pl.’s Reply at 2 (Dkt. 104). It seems logical, however, that an investor would
undertake a market valuation analysis in determining the “prudence” of an investment.
Thus, Anderson’s analysis of the loan and investment decisions are relevant to the current
controversy. The Court finds Anderson’s opinions relevant to the current controversy and
again notes that Plaintiff’s argument goes to the weight of Anderson’s opinion.
Swendsen ultimately argues that Anderson is simply unqualified to offer an expert
opinion. Pl.’s Br. at 6, Dkt. 99. Plaintiff’s claim that Anderson “is not trained and he
does not have experience as an investment professional, nor a commercial lender,” is
contradicted by the credentials listed in Anderson’s curriculum vitae. Id. Anderson holds
a master’s degree in accounting and has worked with more than 280 clients throughout
his career concerning business valuation, forensic accounting, and economic loss
consulting. Anderson Expert Report, Attach. 1, Dkt. 99-1. His credentials suggest he has
extensive experience with investments and lending. Id. Anderson’s specialized
knowledge, education, and experience in the investment field all qualify him to provide
an expert opinion as stated in his report. Because an expert may be qualified “by
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knowledge, skill, experience, training, or education,” the Court is satisfied that Anderson
is qualified to testify. Fed. R. Evid. 702.
Finally, the section of Anderson’s report addressing Plaintiff’s proposed expert
witness, Russell Johnson, is no longer relevant because Johnson will not be allowed to
testify at trial. See Dkt. 135; see also Anderson Expert Report ¶¶ 28-30, Dkt. 99-1.
Accordingly, Anderson will not be allowed to opine on Russell Johnson’s report.
For all of the reasons stated above, the Court finds that Anderson meets the
admissibility standards of Rule 702. Swendsen can properly address his perceived
deficiencies of Anderson’s opinion through “[v]igourous cross-examination, presentation
of contrary evidence, and careful instruction on the burden of proof.” Daubert, 509 U.S.
at 596.
ORDER
IT IS ORDERED:
1.

Plaintiff’s Motion in Limine Objecting to Designated Expert Witness Mark
Anderson (Dkt. 99) is DENIED.

DATED: February 16, 2012

Honorable B. Lynn Winmill
Chief U. S. District Judge

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