Consolidated Rail Corporation v. Grand Trunk Western Railroad Company

Filing 145

ORDER granting in part and denying in part 131 & 133 Motions in Limine to Exclude Certain Testimony of David Wilson and Paul Carey. Signed by District Judge Nancy G. Edmunds. (CHem)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
CONSOLIDATED RAIL CORPORATION
and NORFOLK SOUTHERN RAILROAD
COMPANY,
Case No. 09-cv-10179
Plaintiffs/Counter-Defendants,
Honorable Nancy G. Edmunds
v.
GRAND TRUNK WESTERN RAILROAD
COMPANY,
Defendant/Counter-Claimaint.
/

OPINION AND ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANT’S MOTION TO EXCLUDE CERTAIN TESTIMONY OF DAVID WILSON
AND PAUL CAREY
This matter comes before the Court on Defendant Grand Truck Western Railroad
Company’s motion to exclude from consideration in the summary judgment proceedings
and admission at trial certain testimony from David Wilson and Paul Carey. For the
reasons set forth below, Defendant’s motion is GRANTED in part and DENIED in part.
I.

Facts
A.

David Wilson

David Wilson worked for Plaintiffs from 1967 to 1984. (Wilson Dep. 9:4-12, Dec.
9, 2009.) He then worked for Defendant from 1984 until July of 1996. (Id. at 9:15-21.)
Wilson was the vice president of operations the entire time he worked for Defendant.
(Id. at 32:19-24.) His job included approving trackage rights agreements and handling
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disputes with other railroads over the right to service customers under Defendant’s prior
agreements. (Id. at 43:14-20.) Wilson stated that in the entire time he worked for
Defendant, he never saw a dispute similar to the one at issue in this case. (Id. at 43:2125.)
During the time from 1993 to 1996, Bill Lipton and Paul Ladue worked under
Wilson, and they were responsible for overseeing and managing the joint facility
agreements and addressing the dispute between Plaintiffs and Defendant that gave rise
to this case. (Id. at 46:6-19.) Wilson relied on Mr. Lipton and Mr. Ladue to handle direct
responsibility and report back to him generally. (Id. at 46:20-23.) In 1993, Wilson was
directly involved in the dispute between Plaintiffs and Defendant about whether an
agreement from 1897 afforded Plaintiffs the right to cross over Defendant’s tracks to
access the Trenton Steel Warehouse property. (Id. at 63:9-64:24.)
David Wilson, on behalf of Defendant, and Paul Carey, on behalf of Plaintiffs,
discussed the various ways that this dispute might be resolved. If Plaintiffs had the right
to cross Defendant’s tracks, Wilson determined that it was in Defendant’s best interest
that instead of installing a diamond crossing, Defendant would grant Plaintiffs trackage
rights (i.e. allow Plaintiffs limited use of Defendant’s tracks). (Id. at 173:7-175:21.)
In 1994, Plaintiffs and Defendant agreed to submit the dispute to arbitration and
signed a letter agreement stating the provisions that would be met in the event that the
arbitrators decided that Plaintiffs could cross Defendant’s tracks to serve Trenton Steel
Warehouse. (Def.’s Mot. Ex. 2.) Paul Carey signed this letter agreement on behalf of
Plaintiffs and David Wilson signed on behalf of Defendant. (Id.) The letter agreement
indicated that if Plaintiffs prevailed in the arbitration, Defendant would provide
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immediate access to Trenton Steel Warehouse by a trackage rights agreement. (Id.)
On July 13, 1994, Plaintiffs and Defendant submitted the dispute to arbitration. (Def.’s
Mot. Ex. 3.) Specifically, the parties asked the arbitrators:
Do [Plaintiffs] have the right, pursuant to the Agreements, to cross the tracks,
facilities, right-of-way, and other property of [Defendant] in or near Trenton,
Michigan for the purpose of providing [Plaintiffs] access to and the ability to
provide rail freight transportation service to the Trenton Steel Warehouse?
(Id.) At that time, Wilson considered the “Trenton Steel Warehouse” to be a physical
piece of property, not a building or corporation. (Wilson Dep. at 73:6-74:1.) Wilson
admits, however, that he had no idea as to the amount of property owned by the owner
of Trenton Steel Warehouse at that time. (Id. at 106:24-107:4.) Wilson also stated that
he referred to Huron Valley Steel Corporation as the “Trenton Steel Warehouse.” (Id. at
30:25-31:4.) Wilson did not attend the arbitration proceedings and did not actively
participate in the preparation of materials for the arbitration, nor did he review those
materials. (Id. at 208:25-209:11.)
On January 21, 1996, the arbitrators ruled in Plantiffs’ favor. (Def.’s Mot. Ex. 4.)
In order to effectuate the arbitration award, Plaintiffs and Defendant entered into a
Trackage Rights Agreement (“TRA”) to allow Plaintiffs access to Defendant’s tracks to
service Trenton Steel Warehouse. (Def.’s Mot. Ex. 6.) Wilson stopped working for
Defendant in 1996 and was no longer physically present in Defendant’s offices as of
March 1, 1996. (Wilson Dep. at 79:4-9.) Wilson was not involved in the drafting of the
TRA and had never reviewed or seen it before he prepared for his deposition in this
case. (Id. at 78:19-80:2, 185:1-2.) To the extent that Paul Ladue drafted the TRA while

3

Wilson was still employed with Defendant, though, Ladue was under Wilson’s direction.
(Id. at 203:3-7.)
Wilson went back to work for Plaintiffs in late 1996 and continued working there
until he retired in 2000. (Id. at 9:20-10:7.) Wilson has no personal knowledge of the
lockout and has never heard of E.C. Korneffel Company. (Id. at 30:4-14.)
B.

Paul Carey

Paul Carey worked for Plaintiffs from 1979 until 1999 when he retired. (Carey
Dep. 36:11-13, Dec. 2, 2009.) Carey held the position of “general manager, contracts”
from 1992 to 1999. (Id. at 35:12-36:8.) In this position, Carey was responsible for
drafting, negotiating, and managing Plaintiffs’ operating agreements with other railroads,
including trackage rights agreements. (Id. at 68:23-69:2.) John Cornue reported to
Carey and Carey relied on Cornue for archiving and Plaintiffs’ institutional memory. (Id.
at 101:7-21.)
Carey sought Cornue’s input (as well as input from Cornue’s subordinate, Bill
Bayliff) and considered it valuable, but, ultimately, Carey made his own determination
as to whether Plaintiffs had the right to cross Defendant’s tracks to service Trenton
Steel Warehouse. (Id. at 103:16-23.) Carey was involved in the initial decision to
approach Defendant and assert that Plaintiffs believed they had a right to cross
Defendant’s tracks to access Trenton Steel. (Id. at 116:23-25.)
Carey drafted and signed the June 23, 1994 letter agreement on behalf of
Plaintiffs that indicated that if Plaintiffs’ prevailed in the arbitration, Defendant would
provide immediate access to Trenton Steel Warehouse by a trackage rights agreement.
Carey consulted closely with Plaintiffs’ counsel, Robert Natalini, in formulating the exact
4

wording of the question presented to the arbitration panel, but Carey did not draft the
letter. (Id. at 205:8-206:11.)
Carey was involved in negotiating the TRA and signed it on behalf of Plaintiffs.
(Id. at 224:9-226:5.) Although he was involved, Carey does not deny that Mr. Ladue,
who negotiated for Defendant, may have dealt only with John Cornue on behalf of
Plaintiffs. (Id.)
II.

Standard
A trial court may consider only admissible evidence in ruling on a motion for

summary judgment. See Wiley v. United States, 20 F.3d 222, 225-26 (6th Cir. 1994)
(citation and quotation omitted). Ultimately, the decision to admit or exclude evidence is
within the sound discretion of the court. See Muzquiz v. W.A. Foote Mem. Hosp., Inc.,
70 F.3d 422, 428 (6th Cir. 1995). In exercising its discretion the court “must consider
the relevance and prejudice, and those decisions will not be lightly overturned.” See
United States v. Chambers, 441 F.3d 438, 455 (6th Cir. 2006).
According to Federal Rules of Evidence 401 and 402, all relevant evidence is
generally admissible and consists of any “evidence having any tendency to make the
existence of any fact that is of consequence to the determination of the action more
probable or less probable than it would be without the evidence.” Fed. R. Evid. 401.
III.

Analysis
Defendant seeks to exclude; (1) Wilson and Carey’s testimony on the June 23,

1994 letter agreement, (2) Wilson and Carey’s testimony on the May 1, 1996 Trackage
Rights Agreement, (3) Wilson’s testimony on the Arbitration Proceedings and Arbitration

5

Award, (4) Paragraph 8 of Wilson’s Declaration, (5) Paragraphs 17 and 18 of Carey’s
Declaration, and (6) Paragraph 5 of Carey’s Declaration.
A.

Wilson and Carey’s Testimony on the June 23, 1994 Letter

Defendant argues that Paul Carey and David Wilson’s testimony regarding the
June 23, 1994 letter and their understanding of the term “Trenton Steel Warehouse” in
that letter is irrelevant and is inadmissible extrinsic evidence of an unambiguous
contract term in the May 1, 1996 Trackage Rights Agreement (“TRA”). Plaintiffs assert
that Carey and Wilson’s testimony regarding the June 23, 1994 letter is appropriate
because “Trenton Steel Warehouse” is ambiguous and the letter served as a “PreArbitration Agreement” that set forth terms and conditions that the parties were to
enforce if the arbitration came out in Plaintiffs’ favor. Because this letter set the initial
terms of a potential trackage rights agreement, Plaintiffs argue that Wilson and Carey’s
testimony is relevant as to what the parties intended when referring to “Trenton Steel
Warehouse” in the course of their dealings with one another.
It is well-settled that if the language of a contract is clear and unambiguous, it is
to be construed according to its plain sense and meaning, but if it is ambiguous,
extrinsic evidence can be offered to explain the ambiguity. New Amsterdam Cas. Co. v.
Sokolowski, 374 Mich. 340, 342 (1965); see also Frankenmuth Mut. Ins. Co. v. Masters,
460 Mich. 105, 111 (1999). The court should not create ambiguity where the terms of
the contract are clear. New Amsterdam, 374 Mich. at 342. Consideration of extrinsic
evidence generally depends on some finding of contractual ambiguity. City of Grosse
Pointe Park v. Michigan Mun. Liab. and Prop. Pool, 702 N.W.2d 106, 113 (Mich. 2005).

6

This reflects the principle of freedom of contract and the assumption that the parties
intentionally agreed to what is presented in a contract. Id.
There are two types of ambiguities in a contract: patent and latent. A patent
ambiguity is one “that clearly appears on the face of a document, arising from the
language itself.” Black's Law Dictionary (7th ed.). A latent ambiguity, however, is one
“that does not readily appear in the language of a document, but instead arises from a
collateral matter when the document's terms are applied or executed.” Black's Law
Dictionary (7th ed.). “Because the detection of a latent ambiguity requires a
consideration of factors outside the instrument itself, extrinsic evidence is obviously
admissible to prove the existence of the ambiguity, as well as to resolve any ambiguity
proven to exist.” Grosse Point Park, 702 N.W.2d at 113 (quotation omitted). Where a
latent ambiguity exists, “extrinsic evidence is admissible to indicate the actual intent of
the parties as an aid to the construction of the contract.” Id.; McCarty v. Mercury
Metalcraft Co., 372 Mich. 567, 575 (1964).
In contract interpretation, the cardinal rule is to ascertain the intention of the
parties and “to this rule all others are subordinate.” McIntosh v. Groomes, 227 Mich.
215, 218 (1924).
The role of the court is to ascertain, and effectuate the intent of the parties
at the time of contract formation. It is the expressed, and not secret intent
which is operative. Where the language of the contract is clear on its face,
the court looks to it to ascertain the parties' intent. Where . . . a party
claims that an ambiguity exists in the language the court then looks to see
if there is extrinsic evidence which supports this contention. However, one
party's uncommunicated understanding concerning the specialized
meaning of contract language is not binding on the other party.

7

Turner Holdings, Inc. v. Howard Miller Clock Co., 657 F. Supp. 1370, 1379-80 (W.D.
Mich. 1987); see also Various Markets, Inc. v. Chase Manhattan Bank, N.A., 908 F.
Supp. 459, 472 (E.D. Mich. 1995) (“Whether the terms of a contract are clear or
ambiguous is a question of law for the court to decide. Where there is clear and
unambiguous language in an agreement, the intent of the parties is to be determined
from those terms, without reference to extrinsic evidence.”).
The fact that the parties may disagree as to the meaning of contract terms does
not necessarily establish the existence of an ambiguity, even if one party asserts that a
result different from that embodied in the terms was intended. Steinmetz Elec.
Contractors v. Int’l Bhd. of Elec. Workers, 517 F. Supp. 428, 432 (E.D. Mich.1981)
(granting the defendants' motion for summary judgment because the contract was
unambiguous).
In this case, the parties disagree about the meaning of “Trenton Steel
Warehouse” in the 1996 Trackage Rights Agreement (“TRA”). The question for the
court is whether “Trenton Steel Warehouse” is an ambiguous term. Looking at the
contract itself, “Trenton Steel Warehouse” appears four times in the TRA. It first
appears in the title of the TRA itself, which reads “Trackage Rights Agreement Between
[Defendant] & [Plaintiffs] to Service Trenton Steel Warehouse.” Second, in Section 1,
the TRA states:
[Defendant] hereby grants to [Plaintiffs] the right to operate . . . in either
direction over the following segments of [Defendant]’s railroad for the sole
purpose of serving Trenton Steel Warehouse or its successor (hereinafter
referred to as ‘Industry’), shown on the plan attached hereto, made a part
hereof and marked ‘Exhibit A’ (hereinafter referred to as the ‘Trackage’).

8

The reference to a successor seems to suggest that “Trenton Steel Warehouse” could
be a company or entity doing business.
The third place “Trenton Steel Warehouse” appears in the TRA is in the map
attached as Exhibit A. This map shows a simplified depiction of the Trackage, over
which Defendant would grant Plaintiffs access pursuant to the TRA. On the map, the
words “Trenton Steel Warehouse” are boxed in, and beyond Defendant’s property line,
to the East. The fact that “Trenton Steel Warehouse” is boxed in on Exhibit A indicates
that in the TRA, Trenton Steel Warehouse is meant to describe the actual physical
warehouse on that property.
The map itself, however, is not a completely accurate depiction of the area. The
TRA indicates that the Trackage includes the tracks “up to but not extending beyond . . .
[Defendant] property line.” In the map, the solid line that extends from Defendant’s
property line to the boxed in “Trenton Steel Warehouse” is not part of the Trackage.
The map, however, depicts it in the same thick, solid black line that the key indicates
shows the Trackage. Additionally, if the boxed in “Trenton Steel Warehouse” is the
building on that property, the map incorrectly depicts that the railroad tracks run eastwest, running directly into the east side of the building. In fact, the tracks curve around
and enter the warehouse building on the south side.
The final place the TRA mentions “Trenton Steel Warehouse” is in the title of the
General Conditions, which follow the agreement. The title reads, “General Conditions to
Trackage Rights Agreement Dated as of May 1, 1996, Between [Defendant] and
[Plaintiffs] Relating to Trackage Rights for [Plaintiffs] to Service Trenton Steel
Warehouse at Trenton, Michigan.”
9

The TRA as a whole does not appear to give a clear, unambiguous meaning to
Trenton Steel Warehouse. Defendant urges the Court to consider the Western District
of Michigan’s opinion in Turner, where the court found that there was no latent
ambiguity. In that case, the court determined that the defendant’s definition of the
contract language was “clearly narrower than the commonly understood meaning.”
Turner, 657 F. Supp. at 1379. The court looked to common understanding and the
dictionary definition of “under consideration” and determined that the defendant’s
undisclosed and uncommunicated definition, which strayed significantly from the
dictionary or common meaning of the phrase, was not enough to find a latent ambiguity.
Unlike Turner, unfortunately, “Trenton Steel Warehouse” does not appear to
have a commonly understood meaning. Despite Defendant’s claim that Trenton Steel
Warehouse is unambiguously the building, Defendant’s witness, Paul Ladue, states
several times that he considered “Trenton Steel Warehouse” to be another name for the
company that operated there. (Ladue Dep. 16:6-17:24, 168:4-10, Nov. 10, 2009.)
Plaintiffs offer testimony from Carey and Wilson on what “Trenton Steel
Warehouse” meant in the negotiation and execution of the June 23, 1994 letter. The
letter itself, in relevant part, reads:
In the event the arbitrators decide that [Plaintiffs] may cross [Defendant’s
tracks] to serve Trenton Steel Warehouse, [Defendant] will permit [Plaintiffs]
immediate access to Trenton Steel Warehouse. [Defendant] agrees that
[Plaintiffs] will effect the crossing and access to Trenton Steel Warehouse by
operating over [Defendant] trackage to the extent necessary to cross from
[Plaintiffs’] right-of-way to the premises of Trenton Steel Warehouse in an
operationally practicable and efficient way that is consonant with [Plaintiffs’]
desire to provide rail service. [Plaintiffs’] traversing of [Defendant]’s trackage
will be pursuant to a trackage agreement incorporating, among others, the
following provisions:
...
10

2. The parties will cooperate in good faith to execute a trackage agreement
incorporating the foregoing provisions and standard terms and conditions,
and will execute such an agreement promptly upon receiving the arbitration
decision so as not to delay [Plaintiffs’] access to the Trenton Steel
Warehouse.
Paul Carey signed this letter agreement on behalf of Plaintiffs and David Wilson
signed on behalf of Defendant. The language of the letter indicates that it serves as an
agreement between the parties and that it was intended to provide the provisions and
terms and conditions that the parties would enforce after the arbitration award.
Because the meaning of “Trenton Steel Warehouse” as used in the TRA is
unclear, extrinsic evidence of the parties’ and the railroad industry’s custom and use of
“Trenton Steel Warehouse” will help resolve the ambiguity. The June 23, 1994 letter set
the original terms of the TRA, so the parties’ understanding of “Trenton Steel
Warehouse” in that letter is relevant to resolving this issue.
Defendant’s motion to exclude Wilson and Carey’s testimony on the June 23,
1994 letter is DENIED.
B.

Wilson and Carey’s Testimony on the May 1, 1996 Trackage Rights
Agreement

Defendant seeks to exclude Carey and Wilson’s testimony on the Trackage
Rights Agreement because they lack personal knowledge of the TRA. Plaintiffs argue
that Carey and Wilson did have personal knowledge of the TRA and their testimony on
the subject is admissible. Federal Rule of Evidence 602 states, “A witness may not
testify to a matter unless evidence is introduced sufficient to support a finding that the
witness has personal knowledge of the matter.”
Defendant relies on Aspex Eyewear, Inc. v. E’lite Optik, Inc., CV-S-00-1116,
11

2003 WL 25730506 (D. Nev. Aug. 6, 2003). In that case, the district court found that
deposition testimony on the drafting and negotiating of an agreement was inadmissible
under FRE 602 because the deponent stated that he was not the person who was
involved in the negotiations. The court found that he had no personal knowledge as to
the intent of the parties with respect to the agreement, so his comments were
inadmissible. Aspex Eyewear, 2003 WL 25730506, at *4.
Similar to Aspex Eyewear, in this case, according to Wilson’s own deposition
testimony, he stopped working for Defendant and was no longer physically present in
Defendant’s offices as of March 1, 1996. Wilson was not involved in the drafting of the
TRA and had never reviewed or seen it before he prepared for his deposition in this
case. Wilson admits that he was not there when the TRA was entered into and that he
could not enlighten anyone on the intent of the terms of the agreement as it was entered
into at that point in time. (Wilson Dep. at 194:21-195:3.)1
The only evidence that Plaintiffs offer to support Wilson’s involvement in the TRA
is that to the extent that Paul Ladue drafted the TRA while Wilson was still employed
with Defendant, Ladue was under Wilson’s direction. (Id. at 203:3-7.) Wilson lacks the
personal knowledge to offer testimony on the drafting and negotiating of the TRA. The
Court excludes Wilson from testifying about the negotiation, drafting, or intentions of the
1

Plaintiffs’ claim that Defendant waived its right to object to Wilson’s testimony for lack
of foundation (improperly citing Fed. R. Civ. P. 32(d)(3)(B) for an objection to an error or
irregularity), Federal Rule of Civil Procedure 32(d)(3)(A) indicates, that “an objection to
a deponent's competence — or to the competence, relevance, or materiality of
testimony — is not waived by a failure to make the objection before or during the
deposition, unless the ground for it might have been corrected at that time.” Lack of
personal knowledge is an objection to a deponent’s competence, and Defendant did not
waive this objection by failing to make it at the deposition.
12

specific parties who drafted or negotiated the TRA, to the extent that it is outside his
personal knowledge.
Wilson was personally involved, however, in the dispute between Plaintiffs and
Defendant from its inception in 1993 through the beginning of 1996 when he stopped
working for Defendant. Wilson signed the June 23, 1994 letter that gave rise to the
terms of the TRA and his testimony about what those terms meant in his course of
dealing with this dispute between the parties is admissible.
Defendant also seeks to exclude Paul Carey’s testimony about the TRA for lack
of personal knowledge. Defendant’s argument on this point is unfounded. Carey’s
deposition states:
Q:
In terms of this trackage rights agreement . . . Was Mr. Cornue
involved in the negotiation of this agreement on behalf of [Plaintiffs]?
A:
I’m sure he was.
Q:
Were you involved in it?
A:
Yes.
Q:
Who did you negotiate with?
A:
Well, I don’t recall if we actually negotiated the language or how the
language was negotiated back in 1996, but the writing of the trackage rights
document was part of John Cornue’s responsibility. He generated and
produced these types of documents.
Q:
If Mr. Ladue had testified that he had dealt solely with Mr. Cornue in
terms of negotiating the terms of this agreement, would you have any reason
to disagree with that?
A:
No, I would not quarrel with that.
Q:
Now, you signed the agreement; am I correct?
A:
Yes.
Q:
Did you follow the normal procedure that you would in terms of
reviewing and handling this type of agreement?
A:
I did.
Q:
I assume, being the good general manager of contracts that you were
and as diligent as you were, I gather you would have read the agreement
before you signed it?
A:
Believe it or not, I did.
...

13

Q:
But at any rate, to the extent that there were changes, Mr. Cornue, if
he dealt with Mr. Ladue, he would still have to work with you on the changes
or could he make determinations unilaterally?
A:
He would bring – in this case, he would have brought the changes to
me. And generally speaking, most of John’s recommendations were
accepted.
(Carey Dep. 224:9-226:5.) Carey’s deposition indicates that he not only signed the
TRA, but that he was involved in the process of its production and negotiation.
Defendant relies on the fact that Mr. Ladue, negotiating the TRA for Defendant,
only recalls dealing with John Cornue. The fact that Carey was not the front-man in the
negotiations, though, does not mean that he lacks personal knowledge of it. In fact,
John Cornue confirms in his deposition that Carey played a role in the TRA:
Q:

A:
Q:

A:
Q:

A:
Q:
A:
Q:
A:

At any rate, am I correct that you were the principal individual from
[Plaintiffs] to be involved in the negotiation and the generation of the
trackage rights agreement . . . ?
It was Paul Carey and myself, yes.
Let me back up. If Mr. Ladue testified that you were the only person
he dealt with in terms of the generation of this trackage rights
agreement and Mr. Carey indicated that he had no reason to
disbelieve that or disagree with that, would you disagree with it?
I have no reason to dispute that.
So it would have been you and Mr. Ladue who would have generated
this trackage rights agreement with input, from your end, at least, by
Mr. Carey?
Yes.
...
First off, in terms of the generation of this agreement, did you speak
with Mr. Carey about it?
Yes.
And did it meet his approval?
Yes.

(Cornue Dep. 322:3-327:11, June 14, 2010.)

14

Defendant’s motion to exclude Wilson’s testimony on the Trackage Rights
Agreement is GRANTED in part, as described above, and Defendant’s motion to
exclude Carey’s testimony about the Trackage Rights Agreement is DENIED.
C.

Wilson’s Testimony on the Arbitration Proceedings and Arbitration
Award

Defendant argues that Wilson’s testimony regarding the arbitration proceedings
and arbitration award is not based on personal knowledge and is therefore inadmissible.
Wilson did not attend the arbitration proceedings and did not actively participate in the
preparation of materials for the arbitration, nor did he review those materials.
To the extent that Wilson attempts to offer testimony on the specifics of the
arbitration proceedings, about which he lacks personal knowledge, the Court grants
Defendant’s motion to exclude that testimony as outside Wilson’s personal knowledge
and in violation of Rule 602.
Wilson was employed by Defendant during the time that the dispute between the
parties arose in 1993, however, and he signed the June 23, 1994 letter agreement that
determined the scope of the issue that would be submitted to the arbitrators. The letter,
from Paul Carey to David Wilson, states:
In our recent telephone discussion regarding the above-referenced arbitration
of our dispute over [Plaintiffs’] crossing [Defendant] to serve the Trenton
Steel Warehouse, you stated that, while [Defendant] and [Plaintiffs] remain
agreeable to arbitrating the matter, you desire that the arbitrators not be
asked to set the precise manner of the crossing (that is, exactly how the
crossing would be effected) in the event [Plaintiffs] are found to have the right
to cross. . . . If you can agree to the provisions set forth here, [Plaintiffs] will
agree that the questions submitted to the arbitrators will not include a request
to set the precise terms and conditions of the crossing and access to the
Trenton Steel Warehouse, but only [Plaintiffs’] right to such access.

15

Wilson was Vice-President of operations for Defendant, an active participant in the
negotiations that led to the arbitration, and signed the letter that determined the scope
of the issue to be presented to arbitration.
Although Wilson did not attend the arbitration proceedings nor assemble the
documents to be presented, he played a role in deciding what issue to submit to the
arbitrators. Because of his role in the process as a whole, Wilson’s recollection and
interpretation of the question that was presented to the arbitrators is within his personal
knowledge and admissible to that extent.2
Defendant’s motion to exclude Wilson’s testimony on the Arbitration is
GRANTED in part and DENIED in part.
D.

Paragraph 8 of Wilson’s Declaration

Defendant argues that paragraph 8 of Wilson’s Declaration should be stricken
because it contradicts his prior deposition testimony. Paragraph 8 of Wilson’s
Declaration states, “In referencing the “Trenton Steel Warehouse” in the Pre-Arbitration
Agreement, the parties intended to allow [Plaintiffs] access to the entire location that
could be reached by use of [Defendant’s] sidetrack.”
Throughout his deposition, Wilson and Defendant’s attorneys refer to “Trenton
Steel Warehouse” in various ways. It is referenced as another name for the company
that operates there, a physical building, a piece of property, and the location where
Defendant’s track meets the property line. Wilson is consistent in his testimony that “in

2

Defendant argues that the Arbitration Award itself is the best evidence of its meaning,
but the Arbitration Award effectively consists of a one-word – “Yes” – answer to the
question posed by the parties.
16

granting trackage rights, you're granting trackage rights to a physical location.” (Wilson
Dep. 73:23-24.)
In his deposition, when discussing the June 23, 1994 letter (referred to as the
“Pre-Arbitration Agreement” in Wilson’s Declaration) the deposition reads:
Q.
Okay. Am I correct that Paragraph 1 basically indicates that in the
event the arbitrators decide favorably to Conrail, that Grand Trunk would
permit Conrail immediate access to the Trenton Steel Warehouse, and that
Conrail would affect the crossing and access to the Trenton Steel Warehouse
by operating over Grand Trunk's track to the extent necessary to cross from
Conrail's right of way to the premises of Trenton Steel, correct?
A.
Uh-huh, yes.
Q.
In terms of premises to the Trenton Steel, you understand that to
mean the buildings and the grounds that is the property upon which the
buildings were located in the track between the steel track?
...
A.
I go back to my premise that it entails the right to connect to the
Trenton Steel Warehouse property track. . . . It would be to connect to the
physical -- the physical connection to the Trenton Steel track. Where that
track went was not subject to the trackage right agreement.
(Wilson Dep. 181:23-183:3.) Additionally, earlier in the deposition, Wilson stated,
“When I directed, before I left [Defendant], that we would agree to a trackage right
agreement to get [Plaintiffs] there, I was not – I did not intend to restrict it to per se. I
just wanted it – so as I understand the trackage right agreement, as you’re asking me,
it’s to get to the property line.” (Id. at 113:7-12.)
These sections of the deposition are consistent with Wilson’s Declaration.
Defendant’s motion to strike paragraph 8 of Wilson’s Declaration is DENIED.
E.

Paragraphs 13 through 17 of Wilson’s Declaration

Defendant seeks to strike paragraphs 13 through 17 of Wilson’s Declaration
because they contain opinion testimony based on specialized knowledge. Plaintiffs
contend that the matters contained in those paragraphs are within Wilson’s personal
17

knowledge and are principally factual, or alternatively, are admissible under Federal
Rule of Evidence 701. Rule 701 states:
If the witness is not testifying as an expert, the witness' testimony in the form
of opinions or inferences is limited to those opinions or inferences which are
(a) rationally based on the perception of the witness, and (b) helpful to a clear
understanding of the witness' testimony or the determination of a fact in
issue, and (c) not based on scientific, technical, or other specialized
knowledge within the scope of Rule 702.
Fed. R. Evid. 701. Courts have consistently ruled that opinion evidence on industry
practice, not limited to the specific company or personal knowledge of the witness, is
considered opinion based on specialized knowledge within the scope of Rule 702. See
Quillin v. Easton Sports, Inc., No. 03-151, 2005 U.S. Dist. LEXIS 38358, at *14-15 (E.D.
Tenn. Dec. 28, 2005) (finding opinions based on specialized knowledge from
involvement in the industry and not on personal observations inadmissible under Rule
701); Med. Sales & Consulting Group v. Plus Orthopedics USA, Inc., 2011 U.S. Dist.
LEXIS 53766, at *17-18 (S.D. Cal. May 18, 2011) (finding opinions about industry
practices based on thirty years of experience are based on specialized knowledge not
admissible under Rule 701); Trademark Props., Inc. v. A&E TV Networks, No. 09-1825,
2011 U.S. App. LEXIS 7382, at *51 (4th Cir. Apr. 11, 2011) (ruling that the individuals
had not been designated as experts so they could not testify as to industry practice).
David Wilson’s declaration states:
13. In my 28 years of experience in the railroad industry, I have reviewed
numerous track usage agreements.
14. I have reviewed the 1996 Trackage Rights Agreement.
15. The language in “Section 6. Restriction On Use (c)” states that Conrail
“shall not serve any other rail customers along the Trackage.” In accordance
with industry practice, as I observed in my 29 years in the industry, it is
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common to restrict the use of the track and preclude service to customers
along the track.
16. It would not be consistent with industry practice for a clause such as this
to prohibit or restrict the use of privately owned industry tracks located on
private property beyond the “trackage” defined in the agreement.
17. While employed at GTW, I was not aware of any agreement where GTW
restricted the rail service of a trackage rights counterparty to a specific
building or a specific customer.
Paragraphs 13, 14, and 17 are all statements of fact, within Wilson’s personal
knowledge that do not offer any opinions that would be subject to exclusion under
Rule 701. Paragraphs 15 and 16, however, offer opinions based on industry
practice and are based on specialized knowledge within the scope of Rule 702.
Because Plaintiffs did not offer Wilson as an expert, the opinions expressed in
paragraphs 15 and 16 are inadmissible.
Defendant’s motion to strike paragraphs 13, 14, and 17 of Wilson’s
Declaration is DENIED. Defendant’s motion to strike paragraphs 15 and 16 as
inadmissible opinion testimony is GRANTED.
F.

Paragraphs 17 and 18 of Carey’s Declaration

Defendant argues that paragraphs 17 and 18 of Carey’s July 27, 2011
Declaration should be stricken because they contain opinion testimony based on
specialized knowledge. Plaintiffs contend that these paragraphs contain factual
statements, not opinions.
Carey’s Declaration states:
17. In my 28 years of experience in the railroad industry, I have reviewed
numerous trackage rights agreements.
18. For any such agreements with which I was involved, [Plaintiffs] had never
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restricted rail service to a specific building or a specific customer.
Both paragraphs 17 and 18 are factual statements based on Carey’s personal
experience and do not offer any opinions, let alone opinions based on specialized
knowledge. Defendant’s motion to strike paragraphs 17 and 18 of Carey’s Declaration
is DENIED.
G.

Paragraph 5 of Carey’s Declaration

Defendant argues that paragraph 5 of Carey’s Declaration must be stricken
because it contradicts his prior deposition testimony. Plaintiffs deny that this statement
in the declaration contradicts Carey’s deposition testimony. Paragraph 5 of Carey’s
Declaration states, “I was also the principal [Plaintiffs] representative in the negotiation
and execution of the 06/23/94 pre-arbitration agreement . . . , the 07/13/94 Arbitration
Agreement . . ., and the 05/01/96 Trackage Rights Agreement between [Plaintiffs] and
[Defendant].”
First, in reference to the June 23, 1994 letter (referred to as the “pre-arbitration
agreement” in Carey’s deposition), Carey negotiated, drafted, and signed the document
on Plaintiffs’ behalf. The statement that he was the principal representative for Plaintiffs
does not contradict Carey’s deposition.
Second, in reference to the July 13, 1994 letter, Carey states, “I do not recall that
I was shown a draft of this particular letter in advance, although I probably had known
that we were about to file a question for the arbitrators’ decision.” (Carey Dep. 210:6-9.)
He goes on to say that he was aware of the phraseology of the issue “if not before its
submission, at the time of its submission.” (Id. at 211:2-6.) It is clear from his
deposition that Carey did not draft this letter, nor did he recall being shown a draft of the
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letter before it was sent. To state that he was Plaintiff’s principal representative is, at
best, an exaggeration. Given Carey’s testimony on his limited knowledge of and role in
the July 13, 1994 letter, the Court finds that this section of paragraph 5 in Carey’s
Declaration contradicts his deposition.
Third, as indicated in Section B above, Carey and Cornue’s depositions indicate
that although John Cornue dealt directly with Mr. Ladue, Carey was involved in the
negotiation of the May 1, 1996 TRA and signed the TRA on behalf of Plaintiffs. When
Cornue was asked if he was the principal individual involved in the negotiation and the
generation of the TRA, he answered, “It was Paul Carey and myself.” Given this
testimony, the Court cannot conclude that this declaration contradicts Carey’s
deposition.
Defendant’s motion to strike paragraph 5 of Carey’s Declaration is GRANTED,
only as it relates to the July 13, 1994 letter to the arbitrators and DENIED as it relates to
the June 23, 1994 letter agreement and the May 1, 1996 TRA.

IV.

Conclusion
For the foregoing reasons, Defendant’s motion to exclude the testimony of David

Wilson and Paul Carey is GRANTED in part and DENIED in part.

s/Nancy G. Edmunds
Nancy G. Edmunds
United States District Judge
Dated: December 1, 2011

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I hereby certify that a copy of the foregoing document was served upon counsel of
record on December 1, 2011, by electronic and/or ordinary mail.
s/Carol A. Hemeyer
Case Manager

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