Cruickshank v. Cook et al

Filing 30

Judge George A. OToole, Jr: ORDER entered For the reasons stated herein, the defendants Motion to Preclude Evidence of Damages or Expert Testimony and for Motion for Judgment as a Matter of Law (dkt. no. 14) is GRANTED as to the preclusion of expert testimony and judgment as a matter of law. In light of this ruling, insofar as it seeks also to preclude evidence relating to damages the motion is MOOT. The scheduled jury trial is cancelled. Judgment shall enter in favor of the defendant. It is SO ORDERED. (Nicewicz, Craig)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
CIVIL ACTION NO. 13-11247-GAO
GARY W. CRUICKSHANK,
as Trustee of the Chapter 7 Estate of the Environmental Careers Organization, Inc.,
Plaintiff,
v.
JOHN R. COOK, JR.,
Defendant.

ORDER
June 12, 2014
O’TOOLE, D.J.
The defendant moved in limine to exclude expert testimony and evidence of damages at
the scheduled trial of this matter. The Court discussed these issues with the parties at the pretrial
conference and requested them to submit further briefing, which they have done. The plaintiff’s
briefing proves the defendant’s point.
The plaintiff characterized his claim as follows:
This action turns on a single count alleging that Mr. Cook breached fiduciary
duties he owed to his company, the Environmental Careers Organization
(“ECO”). The claim is premised upon his failure to take corrective action after
receiving years of explicit warnings that ECO was misinterpreting government
contracts it had been awarded, his failure to sufficiently inquire into his
company’s practices in light of those warnings, and his failure to ensure that he or
his direct reports implemented proper policies to comply with the contracts’
terms.
(Pl.’s Mem. in Opp’n to Def.’s Mot. in Limine and Mot. for J. as a Matter of Law at 2 (dkt. no.
20).)
Whether Cook “failed” to take “corrective action” after being warned that ECO was
“misinterpreting government contracts,” or to “sufficiently inquire” into company practices, or to

“ensure” that the “proper policies” were implemented, and importantly whether any such failure
amounted to a breach of the applicable standard of care under state law, are not matters that a lay
fact finder can reliably assess without the assistance of persons having “knowledge, skill,
experience, training, or education” concerning such matters. See Fed. R. Evid. 702. It may be
true that the Court could adequately guide the jury’s understanding of what the relevant contracts
required by appropriate legal instructions, but the jury’s understanding of proper accounting
and/or corporate management practices would have to come from a witness qualified by
education, training, or experience to speak to such practices.
Indeed, the plaintiff wants the jury to be persuaded that the EPA’s opinion settles the
controversy. 1 But the EPA’s claim against ECO is just that, a claim that has not been adjudicated
by an impartial arbiter. There is apparently a contrary argument to be made, as the report for
ECO of Sonenthal & Overall P.C. indicates. In any event, the EPA’s Attestation Report is not a

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The audit report upon which the EPA claim is based was an expression of the auditors’ opinion.
The report said:
Preparing the Schedules of Recorded Costs and the final Financial Status Report
was the Recipient’s responsibility. Our responsibility is to express an opinion on
the Schedules of Recorded Costs and the final Financial Status Report and
whether the reported outlays were allowable and incurred in accordance with the
terms and conditions of the agreements and applicable EPA guidelines.
*
*
*
We conducted our examination in accordance with the Government Auditing
Standards issued by the Comptroller General of the United States, and the
attestation standards established for the United States by the American Institute of
Certified Public Accountants. We also followed the guidelines and procedures
established in the Office of Inspector General Project Management Handbook,
dated January 14, 2005. We examined, on a test basis, evidence supporting the
reported outlays, and performed such other procedures as we considered
necessary in the circumstances . . . . We believe that our examination provides a
reasonable basis for our opinion.
(Pl.’s Mem. in Opp’n to Def.’s Mot. in Limine and Mot. for J. as a Matter of Law, Ex. 5 at 8
(dkt. no. 20-5).)
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substitute for expert evidence. The fact that it may be admissible under Federal Rule of Evidence
803(8) is beside the point; that simply means that the rule against hearsay does not bar it. It does
not address the rule of state law that substantive matters beyond the ken of lay jurors require
evidence from a qualified witness who testifies subject to cross-examination. See, e.g., LeBlanc
v. Logan Hilton Joint Venture, 974 N.E.2d 34, 44 (Mass. 2012) (“Architects, like other
professionals, do not have a duty to be perfect in their work, but rather are expected to exercise
that skill and judgment which can be reasonably expected from similarly situated professionals. .
. . Only in exceptional cases, where the malpractice is so gross or obvious that laymen can rely
on their common knowledge to recognize or infer negligence, do we not require expert
testimony.”) (internal citations and quotations omitted).
The relevant standard of judgment for a person in the defendant’s position is set by
Massachusetts General Laws Chapter 180, Section 6C: an officer of a non-profit corporation
shall perform his duties . . . in good faith and in a manner he reasonably believes
to be in the best interests of the corporation, and with such care as an ordinarily
prudent person in a like position with respect to a similar corporation organized
under this chapter would use under similar circumstances.
Id. Unless the members of the jury have all had experience “in a like position with respect to a
similar corporation,” they will need to have evidence from someone with that experience about
what ordinary prudence would call for in that situation. And without it, they will not have what
they need to make a rational evaluation and decision.
The plaintiff does not propose to offer an expert witness as to this matter, and even if he
did, he has not satisfied the various procedural prerequisites to the presentation of such evidence.
Consequently, while the defendant’s motion in limine to preclude any expert testimony may be
superfluous in the absence of a proffer of such testimony, it is nonetheless GRANTED for the
sake of clarity.
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In the absence of expert evidence regarding the standard of care, as a matter of law the
plaintiff cannot satisfy his burden of proof on his claim. A jury trial would be a futile exercise
and waste of time and resources, most particularly for the jurors.
For the reasons stated herein, the defendant’s Motion to Preclude Evidence of Damages
or Expert Testimony and for Motion for Judgment as a Matter of Law (dkt. no. 14) is
GRANTED as to the preclusion of expert testimony and judgment as a matter of law. In light of
this ruling, insofar as it seeks also to preclude evidence relating to damages the motion is
MOOT.
The scheduled jury trial is cancelled. Judgment shall enter in favor of the defendant.
It is SO ORDERED.
/s/ George A. O’Toole, Jr.
United States District Judge

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