Signal Financial Holdings LLC et al v. Looking Glass Financial LLC et al

Filing 653

OPINION and ORDER: For the reasons stated here within, the court rules as follows. Signal's motion to bar or limit the expert testimony of Adrian Vuckovich (dkt. 601 ) is denied; Signal's motion to bar the expert testimony of Gary Chodes (dkt. 603 ) is granted; and SFGH's motion (dkt. 605 ) and Jafri's motion (dkt. 606 ) to bar expert testimony of David Hough and Juan Arciniegas are granted in part and denied in part. In light of these rulings, Signal's motion for l eave to file a motion for partial summary judgment (dkt. 641 ) is granted; the response is due 3/23/2022 and reply due 4/6/2022. Signal's motion to seal document (dkt. 639 ) is reserved and is taken with the motion for partial summary judgment.The status hearing scheduled for 3/1/2022 at 11:15 a.m. stands. Signed by the Honorable Joan H. Lefkow on 2/23/2022. Mailed notice (ags)

Case: 1:17-cv-08816 Document #: 653 Filed: 02/23/22 Page 1 of 15 PageID #:16189

IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
SIGNAL FINANCIAL HOLDINGS LLC
and SIGNAL FUNDING, LLC, both
Delaware limited liability companies,
Plaintiffs,
v.
LOOKING GLASS FINANCIAL LLC, a
Delaware limited liability company, et al.,
Defendants.

)
)
)
)
)
)
) Case No. 17 C 8816
)
) Judge Joan H. Lefkow
)
)
)

OPINION AND ORDER
Before the court are four motions concerning the admissibility of expert witnesses.
Plaintiffs Signal Financial Holdings LLC and Signal Funding, LLC (collectively referred to in
the singular as “Signal”) move to exclude the expert testimony of Adrian Vuckovich, offered by
defendants Sugar Felsenthal Grais & Helsinger LLP, Jonathan P. Friedland, Vanessa J.
Schoenthaler, Ethan M. Cohen and Elizabeth B. Vandesteeg (collectively “SFGH” or “SFGH
defendants”) (dkt. 601), and the expert testimony of Gary Chodes, offered by defendants
Looking Glass Legal LLC, Looking Glass Partners LLC, Looking Glass Financial LLC, Pinnacle
Disability LLC, Pinnacle Structures LLC, and Farva Jafri (collectively “Jafri”) (dkt. 603). Both
SFGH and Jafri separately move to exclude testimony of Signal’s expert witnesses David Hough
and Juan Arciniegas (dkts. 605, 606). For the following reasons, Signal’s motion to exclude
Vuckovich is denied; Signal’s motion to exclude Chodes is granted; and SFGH’s and Jafri’s
motions to exclude Hough and Arciniegas are granted in part and denied in part.

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ANALYSIS
I.

Signal’s motion to bar or limit the testimony of the SFGH defendants’ malpractice
expert Adrian Vuckovich pursuant to Federal Rules of Civil Procedure 37(c)(1) and
37(d)(1(a)(ii), Federal Rule of Evidence 702 and Daubert, and for an award of
attorney’s fees (dkt. 601) is DENIED.
Signal moves to exclude or limit Vuckovich’s expert testimony on the relevant standard

of care for a legal malpractice claim. To prevail on a legal malpractice claim, a plaintiff must
show (1) the defendant attorney owed the plaintiff a duty of care arising from the attorney-client
relationship; (2) the defendant attorney breached that duty; and (3) as a proximate result, the
plaintiff suffered damages. Tri-G, Inc. v. Burke, Bosselman & Weaver, 856 N.E.2d 389, 394 (Ill.
2006). Generally, a plaintiff must establish the standard of care against which the defendant
attorney’s conduct must be measured through expert testimony, and the failure to present expert
testimony is typically fatal to the plaintiff’s case. See Barth v. Reagan, 564 N.E.2d 1196, 1199–
1200 (Ill. 1990).
A.

The governing standards for the admissibility of expert testimony.

Under Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993) and Rule of
Evidence 702, district courts are gatekeepers to expert evidence, ensuring that it is not only
relevant but also reliable. See Kirk v. Clark Equip. Co., 991 F.3d 865, 871 (7th Cir. 2021)
(district court did not err in excluding expert’s testimony where methodology was unreliable).
Under Federal Rule of Evidence 702, a proffered expert’s testimony is admissible if “(a) the
expert’s …specialized knowledge will help the trier of fact to understand the evidence or to
determine a fact in issue; (b) the testimony is based on sufficient facts or data; (c) the testimony
is the product of reliable principles and methods; and (d) the expert has reliably applied the
principles and methods to the facts of the case.” In making Rule 702 determinations, district
courts follow the standard articulated in Daubert by scrutinizing “(1) the proffered expert’s

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qualifications; (2) the reliability of the expert’s methodology; and (3) the relevance of the
expert’s testimony.” Gopalratnam v. Hewlett-Packard Co., 877 F.3d 771, 779 (7th Cir. 2017)
(emphasis original). The proponent of the expert bears the burden of establishing the
requirements of Rule of Evidence 702 by the preponderance of the evidence. See Lewis v.
CITGO Petroleum Corp., 561 F.3d 698, 705 (7th Cir. 2009). “[T]he key to the gate is not the
ultimate correctness of the expert’s conclusions. Instead, it is the soundness and care with which
the expert arrived at her opinion.” Schultz v. Akzo Nobel Paints, LLC, 721 F.3d 426, 431 (7th
Cir. 2013). Whether to admit expert testimony rests within the discretion of the district court. See
Gen. Elec. v. Joiner, 522 U.S. 136, 142 (1997).
“Doubts about whether an expert’s testimony will be useful should generally be resolved
in favor of admissibility.” Richman v. Sheahan, 415 F. Supp. 2d 929, 943–44 (N.D. Ill. 2006)
(citations omitted). “[W]hether the expert’s theory is correct given the circumstances of a
particular case is a factual one left for the jury to determine.” Stuhlmacher v. Home Depot
U.S.A., Inc., 774 F.3d 405, 409 (7th Cir. 2014). And the factual basis for an expert’s opinion
goes to the credibility of the testimony, not the admissibility. See Smith v. Ford Motor Co., 215
F.3d 713, 718 (7th Cir. 2000) (soundness of factual underpinnings of expert’s analysis and
correctness of the “conclusions based on that analysis are factual matters to be determined by the
trier of fact, or, where appropriate, on summary judgment”). “Vigorous cross-examination,
presentation of contrary evidence, and careful instruction on burden of proof are the traditional
and appropriate means of attacking shaky but admissible evidence.” Daubert, 509 U.S. at 596.
B.

Vuckovich’s testimony on the standard of care is admissible.

The standard of care in a legal malpractice action is measured through expert testimony,
see Barth, 564 N.E.2d at 1199–1200, and the Illinois Rules of Professional Conduct “may be
relevant to the standard of care . . . ,” Nagy v. Beckley, 578 N.E.2d 1134, 1138 (Ill. App. Ct.
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1991). Vuckovich offers opinion on the relevant standard of care, using his experience and Rules
of Professional Conduct 1.7 (Conflict of Interest: Current Clients) and 1.9 (Duties to Former
Clients) in analyzing facts that he deems relevant.
Signal does not challenge Vuckovich’s qualifications. Instead, it challenges the reliability
and relevance of Vuckovich’s opinions. Those arguments include Signal’s belief that Vuckovich
did not consider SFGH defendants’ conduct after October 27, 2017, which it considers critical to
its “hot potato” theory of liability (dkt. 614 at 4, Argument 1) and its claim that Vuckovich dealt
“only with facts helpful to SFGH [d]efendants’ case, and ignore[d] all others” (id. at 17,
Argument 4). 1 Within these arguments, Signal identifies multiple facts that it believes were
ignored or are inaccurate.
Vuckovich’s testimony is both reliable and relevant. His testimony is reliable because,
using his experience and knowledge, he links the facts that he deems material to his conclusions
about the standard of care for a reasonable attorney. See Cox as Tr. for Est. of Cent. Ill. Energy
Coop. v. Evans, 457 F. Supp. 3d 634, 648 (C.D. Ill. 2020) (expert’s testimony reliable where he
used facts “deemed relevant to the transaction,” placed those facts in context, and offered
opinions on whether a conflict disclosure was adequate to meet standard of care). And there is a
“rational connection” between the facts and opinion. See Manpower, Inc. v. Ins. Co. of Pa., 732
F.3d 796, 809 (7th Cir. 2013). Specifically, Vuckovich opines that there was no conflict of
interest as proscribed in Rules of Professional Conduct 1.7 or 1.9 based on the particular services
that SFGH provided Jafri while she was still employed by Signal and after her termination while,
at the same time, representing Signal in “three areas of law: General Corporate, Sales Force (a
Signal Vendor) and Trademark matters.” (See Dkts. 614-1 at 3–9, 614-2 at 2, 9.) He also opines
Signal’s “hired gun” argument (Argument 8) is redundant of its other Rule of Evidence
702/Daubert arguments.
1

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on the appropriateness of how SFGH terminated its representation of Signal. (See dkts. 615-2 at
9, 625-2 at 76–79.) Vuckovich’s testimony therefore meets the reliability requirement.
Vuckovich’s proposed testimony also is relevant to the issue and helpful to the jury.
“Standard of care” is an abstract concept to a non-attorney, especially in a legal malpractice
claim where the particular type of services rendered to Signal and Jafri are material to the
analysis, and attorneys are subject to unique duties and limitations for current and former clients,
as explained in the Rules of Professional Conduct. Indeed, except for the most obvious cases of
negligence, the standard of care is established through expert testimony. See Barth, 564 N.E.2d
at 538; see also Ill. Pattern Jury Instructions, Civil, No. 105.00 (2020). And there are different
duties owed to current and former clients that are at issue for this claim. Vuckovich’s testimony
in this regard is also relevant and necessary to determining the standard of care.
Thus, Vukovich’s opinions are based on his experience and qualifications, which have
not been contested, and his review of the facts in this case that he deemed pertinent to
determining whether SFGH breached the applicable standard of care. Those opinions are
admissible. At bottom, Signal’s arguments about reliability and relevance go to weight and
credibility, not admissibility. Both Signal and SFGH accuse the other of ignoring certain facts in
the case. But a review of the purported factual errors reveals that they are actually quibbles as to
the facts and the inferences to be drawn from certain evidence, which are within the province of
the jury. (See dkt. 614 at 11–16, 24–31; dkt. 625 at 12–15, 19–21.)
C.

Vuckovich’s report and testimony will not be excluded as a discovery
sanction.

Signal argues that Vuckovich’s expert testimony should be excluded as a discovery
sanction under Rule of Civil Procedure 37. Signal claims that SFGH violated Rule 26 by not
adequately describing the facts or data that Vuckovich considered in forming his opinions in his
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written report, in violation of Rule 26(a)(2)(B)(ii), and the report did not contain a statement of
Vuckovich’s compensation for his work on the case, in violation of Rule 26(a)(2)(B)(vi). Signal
also seeks to exclude Vuckovich’s testimony under Rule 37(d)(1)(A)(ii) because SFGH did not
include a written response with its document production related to Vuckovich’s opinions.
According to the parties’ description of events, discovery unfolded as follows: On
March 1, 2021, Signal issued a Rule 34 document production request on SFGH for all materials
that their anticipated expert relied on and of any documents relevant to his compensation. On
March 15, 2021, SFGH disclosed Vuckovich as its expert and tendered his expert report. That
report did not contain a statement of his compensation. As to materials relied on, it broadly
referenced “the majority of the pleadings in the matter, the depositions and exhibits to the same,
the production of the parties, the Court Order on the motion to dismiss and Illinois Rules of
Professional conduct,” along with his “education and experience.” Also on March 15, Signal
issued a subpoena for the documents that Vuckovich relied on and his appearance for a
deposition. On May 12, 2021, SFGH issued a supplemental expert report from Vuckovich that
contained a more detailed explanation of materials relied on, including billing records and
depositions of specific individuals. On May 13, 2021, SFGH electronically produced the
documents relevant to the Rule 34 production request via a Dropbox link that organized the files
within subfolders. Vuckovich was deposed on May 17, 2021, during which four new pages of his
billing records were produced.
Rule of Civil Procedure 37(c)(1) allows sanctions on a party who fails to comply with
Rule 26(a) or (e) unless that failure was “substantially justified” or “harmless.” Fed. R. Civ. P.
37(c); Finley v. Marathon Oil Co., 75 F.3d 1225, 1230 (7th Cir. 1996). “‘Harmless’ means a lack
of prejudice to the party entitled to the information.” DR Distributors, LLC v. 21 Century

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Smoking, Inc., 513 F. Supp. 3d 839, 959 (N.D. Ill. 2021). To determine whether a discovery
failure is substantially justified or harmless, the court considers: (1) the prejudice to the party
against whom the improperly undisclosed evidence is or would be offered; (2) the ability of the
violating party to cure the prejudice; (3) the likelihood of disruption of the proceedings; (4) and
the bad faith or willfulness involved in not disclosing the evidence earlier. See Uncommon, LLC
v. Spigen, Inc., 926 F.3d 409, 417 (7th Cir. 2019). Moreover, Rule 37(d)(3) permits sanctions
based on a party’s failure to respond to a document production request under Rule 34.
Here, there is no apparent harm from the late disclosures. Signal states that the harm from
the tardy production is obvious, but it is not obvious to the court. The documents were eventually
produced before close of discovery and Signal still does not specify how Vuckovich’s deposition
would have gone differently had it received the documents earlier or how the late disclosure
might prejudice them at trial. See U.S. Sec. & Exch. Comm’n v. Berrettini, No. 10 C 1614, 2015
WL 5159746, at *2 (N.D. Ill. Sept. 1, 2015) (late disclosure harmless where opposing party
identified no harm if documents were introduced at trial and failed to allege that late production
of documents inhibited trial preparation). The request to bar Vuckovich’s report and testimony as
a Rule 37(c)(1) sanction is denied.
The request for sanctions for the failure to serve written responses accompanying the
document production under Rule of Civil Procedure 37(d)(3) also is denied. Rule 37(d)(1)(A)(ii)
contemplates a complete failure to respond to a document request. And before bringing such
motion, Rule 37(d)(1)(B) requires a movant to certify that he “has in good faith conferred or
attempted to confer with the party failing to act in an effort to obtain the answer or response
without court action.” Here, Signal conferred with opposing counsel on August 19, 2021, around
three months after the documents had been belatedly produced, which were organized under file

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folders with descriptions of the documents, and discovery had closed. Signal waived the ability
to seek sanctions for the written response requirement by waiting so long to fulfill its meet-andconfer obligation and seek sanctions for discovery conduct that appears to have caused no issue
at the time of the late production. Moreover, there is no indication that the lack of a written
response accompanying the file repository for the documents caused any confusion or harm.
There was and still is no objection to the electronic form of the document production.
D.

Vuckovich’s opinions do not usurp the court’s role in announcing the law.

Next, Signal argues that Vuckovich’s report improperly instructs the jury on the
applicable law. It claims that Vuckovich’s citation to or quotation of Rules of Professional
Conduct 1.7 and 1.9 and applicable comments to those rules usurps the court’s role in
announcing the law.
“In an action for legal malpractice the plaintiff must prove that the defendant attorney
owed plaintiff a duty of due care arising from the attorney-client relationship, that the defendant
breached that duty, and that as a proximate result, the plaintiff suffered injury.” Barth, 546
N.E.2d at 91. The duty of care is defined by what a reasonably careful lawyer would do under
circumstances similar to those shown by the evidence. E.g., Brown v. Gitlin, 313 N.E.2d 180,
182 (Ill. App. Ct. 1974). Although it is ultimately for the jury to decide the duty of care,
Vuckovich may tell the jury his opinion, based on his knowledge and expertise, of what a
reasonably careful lawyer would do in the circumstances presented. Use of the Rules of
Professional Conduct and opining on the relevant conduct offer some “concrete information” to
aid the jury in making its decision. United States v. Neushwander, No. 15 CR 542-1, 2017 WL
4572212, at *3 (N.D. Ill. Oct. 14, 2017).
In addition, the expert may state his opinion whether, based on his knowledge and
experience, SFHG’s conduct was consistent with the standard of care in representing Jafri and
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Signal at the same time. See Fed. R. Evid. 704; United States v. Brown, 871 F.3d 532, 539 (7th
Cir. 2017) (expert opinion on ultimate issues not categorically impermissible, so long as expert
opinion does not merely tell jury the results to reach). The jury will be instructed, as is always
the case, that it is not required to accept the expert’s opinion, see 7th Cir. Pattern Jury Instruction
1.21 (2017 rev.), thus placing in the jury’s hands both the nature of the duty and whether there
was a breach.
E.

Vuckovich may opine on proximate cause.

Signal argues that Vuckovich may not offer testimony on the issue of proximate cause
because it is a fact question for the jury. As noted in this court’s decision on the motion to
dismiss, “‘[t]he proximate cause element of this claim requires that the plaintiff must . . . show
that, but for the attorney’s malpractice, the client would have been successful in the undertaking
the attorney was retained to perform.’” (Dkt. 295 at 9 (quoting Owens v. McDermott, Will &
Emery, 736 N.E.2d 145, 155 (Ill. App. Ct. 2000))). Under Illinois law, whether proximate cause
is a legal or fact question depends on the nature of the claim, e.g., First Nat’l Bank of LaGrange
v. Lowrey, 872 N.E.2d 447, 470 (Ill. App. Ct. 2007), although no party addressed this
discrepancy. In any event, the experts can explain the facts that lead to their opinions that Signal
was or was not damaged by SFGH’s actions. See Nelson v. Quarles & Brady, LLP, 129 N.E.3d
70, 96 (Ill. App. Ct. 2018) (court considered expert testimony on whether defendant law firm’s
failure to raise particular argument established proximate cause).
F.

Vuckovich does not impermissibly opine on Friedland’s credibility, intent, or
state of mind.

Last, Signal cursorily argues that Vuckovich impermissibly opines on Friedland’s
credibility, intent, or state of mind by stating that Friedland’s conclusion that no conflict of
interest existed was “correct.” Underlying Vuckovich’s expert opinion on the standard of care

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are Friedland’s actions and analysis with regard to two of his clients. But Vuckovich’s opinions,
although they align with Friedland’s, do not encompass any assessments or conclusions about
Friedland’s credibility, intent, or state of mind.
II.

Signal’s motion to bar or limit the testimony of the Jafri defendants’ expert Gary
Chodes (dkt. 603) is GRANTED.
Jafri disclosed Gary Chodes as an expert witness to offer testimony on the legal funding

industry and the slide deck that is at issue in the claim for misappropriation of trade secrets.
Signal submits several bases to disqualify Chodes as an expert or bar his expert testimony. Only
disqualification based on a conflict of interest needs to be addressed.
The consensus in the Northern District of Illinois, among many other district courts, is
that disqualification of an expert based on a potential conflict of interest is warranted where both
(1) a confidential relationship existed between the party seeking disqualification of an expert,
and (2) confidential information relevant to the action was exchanged. See Demouchette v. Dart,
No. 09 C 6016, 2012 WL 472917, at *3 (N.D. Ill. Feb. 10, 2012) (Keys, Mag. J.); U.S.
Commodity Futures Trading Comm’n v. Oystacher, No. 15-CV-9196, 2015 WL 9259899, at *3
(N.D. Ill. Dec. 18, 2015) (St. Eve, J.). On top of that, courts also balance policy concerns over
the integrity and fairness of the adversary process. Id. Disqualification is drastic, imposed in the
rare case where absolutely necessary. See Hemphill v. Obaisi, No. 15 C 4968, 2019 WL
4345360, at *1 (N.D. Ill. Sept. 12, 2019). The party seeking disqualification bears the burden of
showing a conflict. Id.
Although disqualification is a high bar, it is more readily granted when the targeted
expert is a former employee of the party seeking disqualification. “[M]ost courts” disqualify
experts who are former high-ranking employees who learned of technical information related to
the action. Brunstad v. Medtronic, Inc., No. 14 C 255, 2015 WL 1962104, at *3 (W.D. Wis.
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Apr. 30, 2015) (disqualifying former vice president of research and development for a defendant
company who had important role in design and quality control of medical device at issue in
action) (citing Thompson, I.G ., L.L.C. v. Edgetech I.G., Inc., No. 11 C 12839, 2012 WL
3870563, at *5–6 (E.D. Mich. Sept. 6, 2012); Pellerin v. Honeywell Int’l Inc., No. 11 C 1278,
2012 WL 112539 (S.D. Cal. Jan. 12, 2012); Lifewatch Serv. Inc. v. Braemer Inc., No. 09 C 6001,
2010 WL 3909483 (N.D. Ill. Sept. 28, 2010)).
Here, disqualifying Chodes as an expert is appropriate. Chodes was employed by plaintiff
Signal Funding LLC as its chief executive officer, beginning July 16, 2016 (dkt. 615-4), until his
termination in March 2017 (dkt. 622 at 8). (His resume curiously stops at 2015. Dkt. 615-2.) His
employment with Signal was governed by an agreement that contained a confidentiality clause.
(Dkt. 615-4 at 6); see Brunstad, No. 14 C 255, 2015 WL 1962104, at *2 (“Many courts have
held that the existence of a confidentiality agreement substantiates a reasonable expectation of a
confidential relationship.”). While CEO, Chodes was involved in the creation of the slide deck
that is alleged to contain misappropriated trade secrets. (Dkt. 615-5 at 7.) Thus, as a high-ranking
employee of Signal who had access to confidential information, Chodes satisfies the two
requirements for disqualification. Further, no policy concerns override that determination.
Disqualification would preserve the integrity of the judicial process and, it seems, would not
unduly prejudice Jafri because Chodes may still serve as a fact witness.
Jafri develops no meaningful response to disqualification. She points out that the Seventh
Circuit has not had the occasion to endorse or reject the disqualification test, and she factually
distinguishes one of the cases on which Signal relies, Great Lakes Dredge & Dock Co. v.
Harnischfeger Corp., 734 F. Supp. 334 (N.D. Ill. 1990). But Jafri has presented no case where a
court rejected or questioned the test, so the court follows the “abundant persuasive authority” and

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employs the test. Brunstad, No. 14 C 255, 2015 WL 1962104, at *2. Moreover, Jafri does not
address the relevance of Chodes’ confidential relationship with Signal and involvement in the
creation of the slide deck. Nor does she address any policy considerations.
Therefore, Chodes is disqualified as an expert based on a conflict of interest. The other
bases in Signal’s motion need not be addressed.
III.

SFGH’s motion and Jafri’s motion to exclude expert report and testimony of David
Hough and Juan Arciniegas (dkt. 605, 606) are GRANTED IN PART AND
DENIED IN PART.
To support its claimed damages, Signal disclosed David Hough and Juan Arciniegas as

expert witnesses on damages. (Dkt. 605-1.) Both men are partners at 777 Partners LLC (id. at 1),
which is Signal’s parent company and is a, if not the, primary source of investment and credit for
Signal (see dkt. 605-2 at 3–4).
Hough and Arciniegas submitted a joint expert report. (Dkt. 605-1.) But Hough was the
one who created the formulas used in the report and Arciniegas merely reviewed it. (Dkt. 605-2
at 29–30.) In Hough’s methodology, he based Signal’s lost revenue and profits calculation on
two components. He first took “the total capital committed and invested in Looking Glass” 2 from
three investors — Brijesh Shah, OTRA Capital Partners, LLC, and Bryan Belcher — and
assumed that both the committed and invested funds, totaling $620,000, would have gone to
Signal under similar terms as those between 777 Partners, LLC and Signal but for Jafri’s
wrongful conduct. (Dkt. 605-1 at 5.) Then he plugged $620,000 into “collection curves” based
on Looking Glass’s financial projections and Signal’s historical performance, to project what
Signal’s gains with that capital would have been, which he believed would have been nearly
$3,500,000, a roughly 40 percent return. (Id.)
2

“Looking Glass” refers to all of Jafri’s corporate entities.

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SFGH and Jafri do not challenge either purported expert’s qualifications, and a review of
their resumes shows that they have experience in finance generally. Rather, SFGH and Jafri
challenge the reliability of their expert testimony. In addition to the standards described above,
see infra section I.A., when making a reliability determination, courts consider the following
non-exhaustive list of factors: “(1) whether the particular scientific 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; (4) the existence and maintenance of standards controlling the
technique’s operation; and (5) whether the technique has achieved general acceptance in the
relevant scientific or expert community.” Kirk, 991 F.3d at 873 (cleaned up). No one factor is
dispositive, and test is “flexible.” Id. The “inquiry focuses not on the ultimate correctness of the
expert’s conclusions, but rather on the soundness and care with which the expert arrived at her
opinion.” Id. (cleaned up).
Here, the “collection curve” methodology component can be tested, but because it was
created specifically for this litigation it has not been peer reviewed or published, and there are no
governing standards or general acceptance as to the methodology. Nevertheless, the
methodology at least has some factual grounding in Looking Glass’s own financial projections
and Signal’s historical data, and its accuracy based on the assumptions can be readily
ascertained. That is reliable enough for admissibility’s sake.
The more difficult question is whether the $620,000 input for that methodology is
reliable. The issue here “is whether this is a case where the expert’s assumptions amount to
rampant speculation and should be excluded, or whether his assumptions merely represent a
weak factual basis for his testimony that is appropriately challenged on cross examination.”
Heller v. Dist. of Columbia, 952 F. Supp. 2d 133, 140 (D.D.C. 2013) (quotations marks omitted).

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The fact supporting Hough and Arciniega’s opinion about lost revenue and profit is that three
investors “committed” or “invested” in Looking Glass. From that factual premise, Hough and
Arciniegas assume a lot about the counterfactual. Indeed, there are assumptions embedded within
that assumption: (1) that all three investors would have brought business to Signal but for Jafri’s
alleged wrongdoing, even though the three investors were in contact with Jafri at different times
before and after her departure from Signal; (2) that the sum would have included both the
committed and invested funds; and (3) on terms materially similar to terms used between Signal
and 777 Partners, LLC.
Erring on the side of admissibility, the credibility of this speculation can be tested
through rigorous cross-examination. If a jury believes that Jafri diverted one or more of these
investors while at Signal, then it is not out of the realm of possibility that one or more of them
would have invested with Signal if Jafri had not left. SFGH and Jafri point out several infirmities
with these opinions and, if the case progresses to a jury, they will have plenty of fodder for crossexamination.
Finally, because Hough created the formulas, the court exercises its discretion to bar
Arciniegas from offering expert testimony. Only Hough may give expert testimony on his
damages calculation, even though it was presented as a joint report.
The other bases raised relating to the admissibility of the expert’s testimony are denied
without prejudice and may be addressed later in a pretrial motion in limine, if this case gets to
that stage.
CONCLUSION AND ORDER
For these reasons, the court rules as follows. Signal’s motion to bar or limit the expert
testimony of Adrian Vuckovich (dkt. 601) is denied; Signal’s motion to bar the expert testimony

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