Rockwood Select Asset Fund XI, (6)-1, LLC v. Devine, Millimet & Branch, P.A. et al
Filing
138
ORDER granting 66 Motion to Exclude Hochman Report; denying 67 Motion to Exclude Levine Testimony; granting in part and denying in part 93 Motion in Limine re Four Types of Evidence and Argument Identified; granting in par t and denying in part 94 Motion to Exclude Evidence of 2001 and Older Regulatory Materials; granting in part and denying in part 95 Motion to Exclude Evidence and Questioning re Unproven Allegations; denying without prejudice 96 Motion for Con tempt and/or to Exclude McAdam's Testimony; denying 123 Motion to Compel Evidentiary Support for Damage Claims; denying 124 Motion to Continue Trial; denying 131 Motion in Limine to Exclude Testimony and Evidence Concerning Pre-and-post closing Events. So Ordered by Chief Judge Joseph N. Laplante.(jb)
UNITED STATES DISTRICT COURT
DISTRICT OF NEW HAMPSHIRE
Rockwood Select Asset Fund
XI, (6)-1, LLC
v.
Civil No. 14-cv-303-JL
Opinion No. 2016 DNH 191P
Devine, Millimet & Branch, PA,
and Karen S. McGinley, Esq.
MEMORANDUM ORDER
Before the court are the parties’ several motions in limine
seeking to exclude a variety of evidence and areas of inquiry
from the upcoming trial of this action, and for miscellaneous
other relief in connection with the trial.
This case arises out of a law firm’s allegedly tortious
representations concerning its client to a lender.
Plaintiff
Rockwood Select Asset Fund XI, (6)-1, LLC, sued defendants
Devine, Millimet & Branch, PA, and Karen S. McGinley, Esq., on a
theory of negligent (or even fraudulent) misrepresentation.
Rockwood alleges that defendants, in the process of assisting
their client, Martha McAdam, to secure a loan from Rockwood,
represented that (1) McAdam was not subject to pending or
threatened litigation, when, in fact, they knew that she was;
and (2) one of the major tenants of the collateral property was
independent of McAdam when, in fact, it was not.
The court, having laid out the background of this action in
numerous prior orders, does not repeat itself here.
See, e.g.,
Rockwood Select Asset Fund XI, (6)-1, LLC v. Devine, Millimet &
Branch, PA, 2015 DNH 135; Rockwood Select Asset Fund XI, (6)-1,
LLC v. Devine, Millimet & Branch, PA, 2016 DNH 24.
It addresses
each of the parties’ motions in turn.
The court reminds the parties that the rulings herein are
made without prejudice to revisiting particular issues in
response to circumstances that might arise during trial.
Furthermore, these rulings are limited to grounds argued in the
parties’ filings.
The court reserves the right to assess other
factors at trial, such as authenticity, hearsay, and best
evidence, see Fed. R. Evid. 800 et seq., 900 et seq., and 1000
et seq., and where appropriate, arguments and grounds not raised
by counsel.
Motions to exclude expert testimony
A.
Defendants’ motion to exclude expert testimony1
The defendants seek to exclude the supplemental report of
plaintiff’s rebuttal expert, Jonathan E. Hochman.
Rockwood
submitted this alleged rebuttal report on December 4, 2015, well
after the September 1, 2015 rebuttal expert disclosure deadline
set by the court’s (largely agreed to) scheduling order.
1
Document no. 66.
2
See
Amended Discovery Plan (document no. 20) at 3; Order of
September 2, 2015.
A party that intends to offer the testimony of an expert
witness at trial must disclose the identity of that witness and
the witness’s written report, as contemplated by Federal Rule of
Civil Procedure 26(a)(2)(B), “at the times and in the sequence
that the court orders.”
Fed. R. Civ. P. 26(a)(2)(D).
When a
party fails to comply with that obligation, “the baseline rule
is that the required sanction in the ordinary case is mandatory
preclusion” of the late-disclosed information.
Harriman v.
Hancock Cty., 627 F.3d 22, 29 (1st Cir. 2010) (internal
quotations omitted); see Fed. R. Civ. P. 37(c)(1) (a party that
fails to disclose under Rule 26(a) “is not allowed to use that
information or witness to supply evidence . . . at a trial”).
While, “in its discretion, the district court may choose a less
severe sanction,” Esposito v. Home Depot U.S.A., Inc., 590 F.3d
72, 78 (1st Cir. 2009), the court concludes, based on the “array
of factors” endorsed by the Court of Appeals, id., that
preclusion is warranted here.
These factors include “the
sanctioned party’s justification of the late disclosure; the
opponent-party’s ability to overcome its adverse effects (i.e.,
harmlessness); the history of the litigation; the late
disclosure’s impact on the district court’s docket; and the
3
sanctioned party’s need for the precluded evidence.”
Harriman,
627 F.3d at 29.
Hochman opined, in his initial report,2 that certain server
logs for an Ohio state court website could indicate whether
anyone accessed an opinion issued by that court in 2011 and,
further, whether anyone did so after searching for Martha
McAdam’s name.
He noted that counsel for the plaintiff were in
the process of obtaining those server logs.
Per the scheduling
order in this case, plaintiff’s rebuttal expert report was due
on September 1, 2015.
On December 4, 2015 -- 3 months after
that deadline -- plaintiff’s counsel produced the server logs
and disclosed Hochman’s supplemental report, in which he opined
about the implications of their contents.
This is not the sort of supplementation contemplated by
Rule 26(a)(2)(E).
“A party may not use a supplemental report to
disclose information that should have been disclosed in the
initial expert report, thereby circumventing the requirement for
a timely and complete expert report.”
Marine Polymer Techs.,
Inc. v. HemCon, Inc., No. 06-CV-100-JD, 2010 WL 1427549, at *4
(D.N.H. Apr. 2, 2010) (quoting 6 Moore's Federal Practice
§ 26.131[2]).
Counsel’s busy litigation schedule alone does not
Defendants do not dispute the timeliness of Hochman’s initial
report.
2
4
justify their failure to obtain these logs -- which were public
records and which date from 2011 -- well before this litigation
commenced, in a timely fashion.
See Plaintiff’s Opp. To Mot. to
Exclude Supp. Report of Jonathan Hochman (document no. 69) at 23 & n.2.
This lack of justification -- coming in a case where
plaintiff’s counsel have missed several deadlines -- weighs
heavily in favor of preclusion of the supplemental report.
The history of the litigation also weighs in favor of
preclusion.
This is not the first time that plaintiffs have
disregarded the court’s scheduling order.
See, e.g., Rockwood,
2016 DNH 24 (denying motion to amend the complaint to include
civil RICO violation brought ten and a half months after
amendment deadline); see also infra Part II.A.
As with its late
damages disclosures, Rockwood cannot justify this late
disclosure by invoking the parties’ agreement to conduct certain
depositions after the close of fact discovery.
See Fed. R. Civ.
P. 16(b)(4); Fed. R. Civ. P. 29(b) (“a stipulation extending the
time for any form of discovery must have court approval if it
would interfere with the time set for completing discovery”);
see also Banks v. City of Philadelphia, 309 F.R.D. 287, 291
(E.D. Pa. 2015) (dismissing claim where plaintiff failed to
comply with scheduling order despite parties’ informal discovery
agreement).
5
None of the other factors suggests that the court should
impose any other remedy.
While neither the potential prejudice
to the defendants (that is, defendants’ missed opportunity to
conduct discovery into Hochman’s belated opinion and it bases)
nor the late disclosure’s impact on the court’s docket (in
particular, the expenditure of judicial resources to resolve the
resulting motions practice where plaintiff issued the report
knowing the deadline had passed) weighs heavily in favor of
preclusion, those factors likewise do not weigh against it.
Finally, unlike in Esposito, 590 F.3d at 79, this preclusion
will not obviously or automatically result in dismissal of the
case.
Nor will it significantly prejudice plaintiff’s ability
to put on its case.
Plaintiff may still present Hochman as an
expert, who may testify as to the opinions disclosed in his
initial report.
Accordingly, the court grants defendants’ motion to exclude
Hochman’s supplemental report and testimony related thereto.
B.
Plaintiff’s motion to exclude expert testimony3
Rockwood seeks to preclude the defendants’ expert, John R.
Levine, from testifying that a 2008 Ohio state court opinion
concerning Martha McAdam would have appeared on the first page
of Google’s search results if the plaintiff had searched Google
3
Document no. 67.
6
for “Martha McAdam” prior to closing on the loan in July 2011.
Defendants contend that Levine’s testimony lacks reliability
because it is based on methods inadequate to support his
conclusion.
Federal Rule of Evidence 702 is “[t]he touchstone for the
admission of expert testimony in federal court litigation . . .
.”
Crowe v. Marchand, 506 F.3d 13, 17 (1st Cir. 2007).
Under
that rule, an expert witness may offer opinion testimony if:
(a) the expert’s scientific, technical, or other
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.
Fed. R. Evid. 702.
As the structure of this rule suggests,
before the factfinder in a case can consider expert testimony
over the adverse party's objection, the trial judge, serving as
“gatekeeper,” must determine whether the testimony satisfies the
relevant foundational requirements.
See Daubert v. Merrell Dow
Pharm. Inc., 509 U.S. 579, 597 (1993).
Here, the only foundational requirement that Rockwood
questions is whether Levine’s opinion -- that the 2008 Ohio
court opinion would have appeared on the first page of the
results of a Google search performed in mid-2011 -- is “the
product of reliable principles and methods.”
7
Specifically,
Rockwood points out that -- as Levine acknowledged in his
deposition -– Google ranks search results using a proprietary
algorithm that has evolved over time.
Though Google has not
disclosed the specific variables that the algorithm accounts
for, or precisely how it accounts for them, or how that has
changed over time, Levine acknowledged that it is possible to
know at least some of those variables, such as a user’s
geographic location and search history, as well as how many
times a particular result has been accessed.
By his own
admission, Levine did not account or control for at least these
known variables in performing his analysis.
As Levine explained during his deposition, though
impossible to control for all variables, Google has disclosed,
to a certain degree, how its “PageRank” algorithm functions.
Through that algorithm, the most relevant results for a search
are weighted to display earliest in a list of search results.
In his 2015 search for “Martha McAdam,” Levine found that the
2008 Ohio court opinion appeared on the first page of the
results -- indeed, as the first result.
All but a handful of
the remainder of the results, he observed, were the familiar (to
popular search engine users) “generic links” to “sites that will
generally provide a search result for anything that looks like a
person’s name.”
Levine Report (document no. 67-4) ¶ 22.
Noting
that the 2008 Ohio court opinion’s metadata has not changed
8
since Google first indexed it, Levine concluded that it would
have appeared above such “generic links” in 2011 and, therefore,
on the first page of a hypothetical search for “Martha McAdam”
at that time.4
“While the party seeking to introduce the testimony bears
the burden of proving its admissibility, the burden is not
especially onerous, because ‘Rule 702 has been interpreted
liberally in favor of the admission of expert testimony.’”
West
v. Bell Helicopter Textron, Inc., 967 F. Supp. 2d 479, 484
(D.N.H. 2013) (quoting Levin v. Dalva Bros. Inc., 459 F.3d 68,
78 (1st Cir. 2006)).
The method by which Levine arrived at his
opinion, see supra Part I.B., is not so inherently unreliable
that exclusion is required.
That Levine might have, but did
not, take into account other known factors that may affect the
ranking of a search result goes more to the weight of his
testimony than to its admissibility.
See Crowe, 506 F.3d at 18
(“Objections of this type, which question the factual
underpinnings of an expert’s investigation, often go to the
weight of the proffered testimony, not to its admissibility.”);
The court derives this conclusion from a painstaking review of
Levine’s opinion and the exhibits submitted in support and
opposition to this motion. This court takes no pleasure in
noting that neither Levine’s report nor the parties’ briefing on
this motion were as helpful or clear as they could and should
have been.
4
9
cf. Currier v. United Techs. Corp., 213 F.R.D. 87, 88 (D. Me.
2003) (failure to consider additional relevant factors goes to
weight).
“Vigorous cross-examination, presentation of contrary
evidence, and careful instruction on the burden of proof are the
traditional and appropriate means of attacking shaky but
admissible evidence.”
Daubert, 509 U.S. at 596.
Rockwood will
have the opportunity to cross-examine Levine and present
contrary evidence here.
Accordingly, Rockwood’s motion to
exclude Levine’s opinion is denied.
Motions in limine
A.
Defendants’ motion in limine no. 1:
Damages evidence5
The defendants seek to preclude Rockwood from presenting
evidence or argument concerning its entitlement to damages above
the $950,000 in unpaid principal that plaintiff claimed in its
complaint.
As far as the court can discern, defendants ask the
court to exclude evidence of (1) Rockwood’s attorneys’ fees,
costs and expenses incurred in its efforts to recover under the
loan after McAdam defaulted; (2) damages arising from Rockwood’s
loss of use of the funds; and (3) a default judgment against
McAdam.6
5
As explained below, this motion is granted in part.
To
Document no. 93.
The defendants also appear to request exclusion of any evidence
or argument that plaintiff is entitled to damages on the basis
6
10
the extent Rockwood seeks to introduce evidence of its damages
beyond its actual pecuniary loss, its consequential damages, and
prejudgment interest, and especially to the extent that Rockwood
seeks to introduce evidence of damages for claims that it has
not pled, defendants’ motion is granted and that evidence will
be excluded.
1.
Background
In its complaint, Rockwood sought as damages for claims of
fraudulent and negligent misrepresentation: (1) $950,000,
representing the unpaid principal on the loan at issue;
(2) Rockwood’s attorneys’ fees and expenses accrued “in an
effort to work out the Loan or realize on the collateral”; and
(3) “Loss of the use of the funds by Plaintiff.”
(document no. 1) at 8-9.
Compl.
It echoed this demand in its initial
disclosures pursuant to Rule 26(a)(1)(A)(iii), adding that it
had not yet calculated the value of its loss of the use of the
funds, which would “likely be the subject of expert testimony.”
Document no. 93-2 at 4.
On February 23, 2016, some 12 weeks after the close of fact
discovery, Rockwood supplemented its initial disclosures to
of defendants’ post-closing conduct. See Defendants’ Mot. in
Limine (document no. 93) at 9-10. This argument lacks the
specificity necessary for the court to rule on it in any helpful
manner at this time.
11
include a breakdown of the fees and expenses.
3.
Document no. 93-
On March 10, 2016, 14 weeks after the close of discovery and
a mere six weeks before the then-scheduled April 22, 2016 final
pretrial conference, Rockwood emailed the defendants a copy of a
default judgment for $2.8 million dollars that it had obtained
against McAdam about two years earlier, in May 2014.
This
default judgment, Rockwood’s counsel’s paralegal explained in
the email, “better than anything we’ve provided to date,
represents Rockwood’s damages.”
Document no. 93-1.
In its final pretrial statement, Rockwood finally
calculated the value of its alleged loss of the use of the funds
at just under $3 million.
Document no. 98 at 10-11.
It also
set out the calculations underlying its claim for damages based
on the default judgment against McAdam.
2.
Id.
Default judgment and contract damages
Plaintiff’s claims in this action are based on defendants’
alleged misrepresentations.
Such claims sound in tort.
See
Plourde Sand & Gravel v. JGI E., Inc., 154 N.H. 791, 799 (2007)
(citing Restatement (Second) of Torts § 552, at 126-27)).
In
New Hampshire,7 “[t]he general rule is . . . that the measure of
Sitting in diversity, this court looks to state law to
determine the bounds of available remedies. Hutton v. Essex
Grp., Inc., 885 F. Supp. 331, 333 (D.N.H. 1994) (citing Titan
Holdings Syndicate, Inc. v. City of Keene, N.H., 898 F.2d 265,
273 (1st Cir. 1990)).
7
12
damages recoverable for misrepresentation, whether intentional
or negligent, is actual pecuniary loss.”
Realty, Inc., 124 N.H. 814, 818 (1984).
Crowley v. Glob.
“Consequential
damages,” which “are those amounts the plaintiff lost because of
the defendant’s misrepresentation,” are also recoverable.
Johnson v. Puritan Press, Inc., 2014 DNH 244, 2 (citing Crowley,
124 N.H. at 817).
Furthermore, a plaintiff who prevails in
recovering on his pecuniary loss may be entitled to prejudgment
interest on its damages award, see N.H. Rev. Stat. Ann. § 524:1b, the rate of which is calculated according to a formula
established by statute, see id. § 336:1.
Defendants seek to preclude Rockwood from relying on the
default judgment that it obtained against McAdam as a
calculation of Rockwood’s damages in this action.
Defendants
characterize that damages calculus as contract-based lost profit
damages owed Rockwood by McAdam for her breach of the loan
agreement and a July 3, 2012 settlement agreement.
Defendants
then challenge admission of that default judgment as a basis for
plaintiff’s damages, arguing that defendants should not be held
liable for (1) the breach of a contract to which they were not
privy or (2) damages for a cause of action that the plaintiff
did not plead.
While neither party makes this argument in an entirely
elucidating manner, it appears to the court that Rockwood does
13
not defend the default judgment as an appropriate calculation of
damages on a claim sounding in tort.
Instead, it argues that,
because misrepresentations in opinion letters give rise to a
claim that sounds in both tort and contract, it is entitled to
either damages in tort or contract-based damages.
See
Plaintiff’s Obj. to Mots. in Limine (document no. 118) at 18-19.
Specifically, Rockwood now argues that it is entitled to
contract damages because it was (as the lender) the intended
third-party beneficiary of the agreement between the defendants
and McAdam (the borrower) under which defendants issued the
loan-related opinion letter at issue here.
See id.; Supp. Mem.
Regarding Plaintiff’s Breach of Contract Claim (document
no. 134).
Rockwood raises this new theory of liability too late.
“It
is well settled that a defendant is entitled to be informed of
the theory on which the plaintiffs are proceeding and the
redress that they claim as a result of the defendant’s actions.”
Kravitz v. Beech Hill Hosp., L.L.C., 148 N.H. 383, 392 (2002)
(quoting Pike Indus., Inc. v. Hiltz Const., Inc., 143 N.H. 1, 3
(1998)); see also Ruivo v. Wells Fargo Bank, N.A., 766 F.3d 87,
91 (1st Cir. 2014) (“Although a complaint need not point to the
appropriate statute or law in order to raise a claim for relief
under Rule 8, its substance and structure must give the
defendants notice of the nature of the claim against them”).
14
Had Rockwood raised a breach of contract claim in its complaint,
through a timely amendment, or even at any reasonable time prior
to its pre-trial statements and filings, Rockwood may possibly
have been entitled to maintain such a claim.
See Montgomery
Cty. v. Jaffe, Raitt, Heuer & Weiss, 897 F. Supp. 233, 237 (D.
Md. 1995) (permitting plaintiff to maintain a breach of contract
claim under a third-party beneficiary theory, under Maryland
law, for misrepresentations in an attorney opinion letter); but
see Citibank, N.A. v. City of Burlington, No. 2:11-CV-214, 2012
WL 2050730, at *2 (D. Vt. June 7, 2012) (dismissing, under
Vermont law, claim by recipient of opinion letter against law
firm under third party beneficiary theory).
If that is the law
in New Hampshire -- and it is not clear to the court that it is
-- Rockwood certainly had the opportunity to invoke that claim
earlier in the litigation.
It obtained the default judgment in
question some seven months before filing its complaint in this
action and 18 months before it sought to amend its complaint to
include far more complex, less traditional claims.
See
Plaintiff’s Motion for Leave to File Proposed Amended Complaint
(document no. 37).
But Rockwood did not avail itself of that opportunity.
Neither is the court persuaded by Rockwood’s belated argument
that the complaint, as drafted, pleads and puts the defendants
on notice of such a claim.
See Supp. Mem. Regarding Plaintiff’s
15
Breach of Contract Claim (document no. 134).
Though the
complaint does allege that Devine issued a written legal opinion
to Rockwood while representing McAdam in the days leading up to
the loan closing, nowhere did it put defendants on notice that
Rockwood claimed to be an intended third party beneficiary of
McAdam’s agreement with Devine as a result.
See Ruivo, 766 F.3d
at 91 (“the plaintiff is not entitled to pursue ‘every legal
theory that a court may some day find lurking in the penumbra of
the record.’” (quoting Rodriguez v. Doral Mortg. Corp., 57 F.3d
1168, 1172 (1st Cir.1995)); cf. Montgomery Cty., 897 F. Supp. at
237 (plaintiff pled both tort and contract theories).
Nor, so
far as the court is aware, had Rockwood raised this issue in
litigation prior to briefing this motion in limine.
Accordingly, the default judgment against McAdam, and
argument by Rockwood in pursuit of contract-based damages based
thereupon or otherwise, will be excluded.
3.
“Loss of use” damages
Unlike its contract-based damages, plaintiff did plead its
entitlement to “loss of use” damages resulting from defendants’
alleged misrepresentations.
Compl. (document no. 1) at 8.
Defendants have moved to exclude evidence or argument concerning
Rockwood’s loss of use of funds claim on the grounds that
(1) Rockwood failed to support its “loss of use of funds”
16
calculations with expert testimony and (2) that it was untimely
disclosed.
The court agrees that expert testimony would be
necessary in this case to support the “loss of use” damages that
plaintiff requests.
Plaintiff all but acknowledged as much when
it conceded that such damages would “likely be the subject of
expert testimony.”8
Document no. 93-2 at 4.
Plaintiff’s reliance on cases suggesting that a party’s
damage from the loss of use of an automobile -- not of funds -may be proven by direct testimony of the party “comparing what
it actually did, with what it would have done” alone is
misplaced.
See Gelinas v. Mackey, 123 N.H. 690, 695-696 (1983);
Rogers v. Nelson, 97 N.H. 72, 74-75 (1951).
Plaintiff’s pursuit
of damages based on its loss of use of the funds appears based
Indeed, although the defendants have not explicitly raised this
point in their filings, the court is not entirely convinced that
“loss of use” damages are available to the plaintiff as a
damages calculation separate from prejudgment interest. It is
commonly accepted that “[p]rejudgment interest serves to
compensate for the loss of use of money due as damages from the
time the claim accrues until judgment is entered, thereby
achieving full compensation for the injury those damages are
intended to redress.” West Virginia v. United States, 479 U.S.
305, 310 n.2 (1987); see also Lakin v. Daniel Marr & Son Co.,
732 F.2d 233, 238 (1st Cir. 1984) (“We have expressly held . . .
that one of the [New Hampshire prejudgment interest] statute's
purposes is ‘to provide compensation for the loss of the use of
money damages during the pendency of the lawsuit.’”). Absent
expert testimony on that score, the plaintiff has not
demonstrated why it ought to be entitled to interest at a rate
higher than that calculated according to the formula established
by statute.
8
17
on the assumption that plaintiff would have invested the money
that it loaned to McAdam, as well as what it spent in costs and
fees, in a manner that returned compound interest at a rate of
20% per annum.
98) at 10-11.
See Rockwood’s Pretrial Statement (document no.
Such a calculation is more analogous to that of
future damages, such as loss of future earnings.
In New
Hampshire, future damages cannot be recovered unless the
plaintiff “prove[s] [its] damages to a degree of reasonable
certainty,” a burden it cannot satisfy “without evidence of the
amount of future damages reduced to present value.”
F. Supp. at 334.
Hutton, 885
Expert testimony, albeit “not absolutely
required, . . . is the preferred approach” to prove such
damages, because “[t]he court will not admit evidence of
economic data, such as interest and inflation rates, without a
proper foundation.”
Id. at 335.
Even were expert testimony not necessary to establish the
appropriate measure of “loss of use” damages under these
circumstances (and if such damages were, in fact, available to
the plaintiff), Rule 26 of the Federal Rules of Civil Procedure
obligated Rockwood to disclose the computation of its damages
and the underlying evidentiary material during discovery,
without waiting for a discovery request from the defendants.
Fed. R. Civ. P. 26(a)(1)(A)(iii).
Rockwood failed to make this
significant disclosure in the timely manner contemplated by
18
Rule 26.
The court is not persuaded by Rockwood’s defense that,
in essence, the parties’ agreement to conduct certain
depositions after the discovery deadline established by the
court’s order permitted the parties to informally extend all
discovery deadlines without the court’s consent.
See Fed. R.
Civ. P. 16(b)(4).
Because Rockwood’s damages calculations for loss of use of
the funds are unsupported by expert testimony and untimely
disclosed, the court grants defendants’ motion in limine to
exclude evidence of those damages to the extent they exceed what
Rockwood may recover in prejudgment interest.
4.
Attorneys’ fees and costs
Finally, defendants seek to exclude the itemized list that
the plaintiff contends represent its costs and fees incurred in
attempting to collect on the loan.
Defendants argue that this
itemization, which Rockwood provided to defendants for the first
time well after the close of discovery, should be excluded
because it was untimely produced.9
This prejudiced defendants,
To the extent that defendants contend that Rockwood failed to
plead its entitlement to those costs and fees, that one-line
argument, see Defendants’ Mot. in Limine (document no. 93) at 5,
fails for lack of development. See United States v. Zannino,
895 F.2d 1, 17 (1st Cir. 1990). It would also fail on the
merits. The complaint does appear to allege facts underlying
Rockwood’s attempts to collect on the loan and seeks damages
that include Rockwood’s attorneys’ fees and expenses accrued “in
9
19
they argue, in preventing defendants from pursuing discovery on
the subject.
As discussed supra, Rule 26 obligated Rockwood to disclose,
“without awaiting a discovery request,”
a computation of each category of damages claimed by
the disclosing party -- who must also make available
for inspection and copying as under Rule 34 the
documents or other evidentiary material, unless
privileged or protected from disclosure, on which each
computation is based, including materials bearing on
the nature and extent of injuries suffered[.]
Fed. R. Civ. P. 26(a)(1)(A)(iii).
Here, again, Rockwood failed
to make a timely disclosure of its damages calculations and the
underlying evidence -- much, if not all, of which was or ought
to have been in Rockwood’s possession well before discovery
closed.
And, again, the court is unconvinced by Rockwood’s
excuses for its tardy supplementation of its initial disclosures
or production of this evidence.
Exclusion of the late-disclosed
evidence under Rule 37 would not be inappropriate in a case such
as this where, as discussed supra Part I.A., the plaintiffs have
“repeatedly balk[ed] at court imposed deadlines.”
Esposito, 590
F.3d at 79 (citing Santiago-Díaz v. Laboratorio Clínico Y De
Referencia Del Este, 456 F.3d 272, 277 (1st Cir. 2006); see also
Harriman v. Hancock Cty., 627 F.3d 22, 30 (1st Cir. 2010)
an effort to work out the Loan or realize on the collateral.”
Compl. (document no. 1) at 8.
20
(affirming preclusion of late-disclosed evidence where late
disclosure lacked justification).
The record suggests, however, that the prejudice to the
defendants by plaintiff’s late disclosure of these calculations
is not significant.
See Cruz-Vázquez v. Mennonite Gen. Hosp.,
Inc., 613 F.3d 54, 58 (1st Cir. 2010).
Plaintiff produced its
itemized demand for damages several weeks before the deposition
of Rockwood’s principal, Dan Purjes, affording defendants the
opportunity to question Purjes on its contents.
It also
produced, during the discovery period, documents concerning
Rockwood’s attempts to collect on the loan’s principal and its
attorney fees paid to attorney Chris Dugan during those
attempts.10
Rockwood disappointingly argues that defendants were not
prejudiced as to Attorney Dugan’s billing records because
defendants had those records “in hand when they deposed him” but
only asked him one question about them. Plaintiff’s Obj. to
Mots. in Limine (document no. 118) at 22. Defendants point out
what Rockwood omitted: that they had the documents “in hand”
only because said documents were produced the very day of
Dugan’s deposition, affording them little time to question him
on the documents’ content. Defendants’ Mot. in Limine (document
no. 93) at 7 n.1.
10
21
Accordingly, the court denies defendants’ motion to exclude
evidence of plaintiff’s damages in the form of costs, fees, and
expenses incurred in its efforts to realize the loan.11
B.
Defendants’ motion in limine no. 2: Post-loan
representations12
Defendants also seek to exclude evidence and arguments
concerning the defendants’ conduct following the closing of the
Rockwood loan on July 21, 2011.
Generally, they challenge the
admissibility of evidence and argument concerning alleged
misrepresentations that Rockwood contends the defendants made
during the course of representing McAdam while Rockwood
attempted to realize on the loan after McAdam defaulted.13
Defendants challenge this evidence as irrelevant, unduly
prejudicial, and improper fodder for cross examination under
Rule 603(b).
“Evidence is relevant if:
(a) it has any tendency to make
a fact more or less probable than it would be without the
As discussed more fully infra Part III.B., Rockwood has
withdrawn its production of documents, made on April 12, 2016,
which the court understands relate to these alleged damages.
11
12
Document no. 93.
Defendants noted three general examples of the allegedly
fraudulent post-closing behavior in their motion to exclude this
evidence. See document no. 93 at 11-12 Plaintiff identified
three more. See document no. 118 at 11-12. Each instance
involves the submission of an affidavit or a verified complaint
containing what Rockwood alleges are false statements.
13
22
evidence; and (b) the fact is of consequence in determining the
action.”
Fed. R. Evid. 401.
As this court has previously
observed, evidence of the defendants’ behavior subsequent to the
loan closing may shed light on the defendants’ intent at the
time of the closing.
See Rockwood, 2015 DNH 135, 20-21; see
also Fed. R. Evid. 404(b)(2) (“Evidence of a crime, wrong, or
other act is not admissible to prove a person’s character,” but
“may be admissible for another purpose, such as proving motive,
opportunity, intent, preparation, plan, knowledge, identity,
absence of mistake, or lack of accident.”).
In the fraudulent
misrepresentation context, the Court of Appeals has observed:
As direct evidence is seldom available, fraudulent
intent normally is determined from the totality of the
circumstances. And since ‘subsequent conduct may
reflect back to the promisor’s state of mind and thus
may be considered in ascertaining whether there was
fraudulent intent’ at the time the promise was made,
proper application of the ‘totality’ test in the
instant context often warrants consideration of posttransaction conduct and consequences, as well as pretransaction conduct and contemporaneous events.
Williamson v. Busconi, 87 F.3d 602, 603 (1st Cir. 1996).
Thus,
to the extent that the defendants’ post-closing conduct may
reflect on the defendants’ negligent or fraudulent intent at the
time of the closing, it may be relevant to these elements of the
plaintiff’s claims.
Further, post-closing statements and
conduct could be relevant as the continuation of a plan
undertaken prior to or at the time of the loan, or as efforts to
23
conceal the falsehood or origins of such negligent or fraudulent
misrepresentations, or to delay their discovery or eventual
disclosure.
Finally, evidence and argument concerning post-
closing conduct by defendants that may have delayed, hindered or
prevented the plaintiff from obtaining satisfaction on the loan,
leading defendants to incur additional costs, may be relevant to
plaintiff’s claim for those damages upon a showing of a causal
connection between defendants’ conduct and plaintiff’s costs.
To be clear, the court has not ruled this broad swath of
evidence admissible.
The court merely declines to rule it
entirely inadmissible at this pretrial stage, in light of the
parties’ briefing with respect to broad categories of documents
and information rather than specific instances of conduct or
specific pieces of evidence.
Defendants may raise their
objections with greater specificity at trial.
Upon such
objections, plaintiff should be prepared to explain how the
evidence in question is relevant to its claims as described
above, to its damages, or to some issue not as-of-yet raised by
the parties or the court.
Nor is the court inclined to preclude this category of
evidence and argument for lack of a “standard of care” expert.
Defendants contend that Rockwood cannot demonstrate that any of
that conduct was wrongful absent an expert who can establish the
standard of care that an attorney must exercise when
24
representing a client.14
While expert opinion on this subject
may be required in the legal malpractice context, Wong v.
Ekberg, 148 N.H. 369, 373 (2002), the defendants have cited no
authority -- and this court is unaware of any -– holding that
such opinion evidence on standard of care is required to prove
an attorney or law firm’s negligent or fraudulent
misrepresentation to a third party.
The question here is not whether the defendant’s postclosing statements or actions were themselves wrongful,
actionable, or violated any duty owed to a client or adverse
party, or caused the plaintiff’s damages.
The question is
whether they are admissible to prove the plaintiff’s claims or
damages.
That is a question of relevance under Rules 402 and
404, and is not in any way dependent on any precondition (see
Fed. R. Evid. 104(b)) or expert opinion evidence.
The
defendants have cited no authority to the contrary.
This is not to say that expert opinion evidence regarding
an attorney’s professional obligations to clients and third
parties would not be relevant or admissible.
Such evidence
This is the basis for defendants’ contention that specific
instances of alleged post-closing misrepresentations cannot be
inquired into on cross examination. See Fed. R. Evid. 608(b).
Absent an expert to establish the requisite standard of care,
defendants contend, the plaintiff cannot establish that
defendants’ conduct was a “bad act.”
14
25
might very well provide helpful context for the jury to evaluate
the defendants’ alleged conduct in this case, both at the time
of the transaction and afterward.
But to say that such evidence
might be admissible if offered by either party is not to say it
is required to be offered by the plaintiff.
To the extent that
the defendants argue that an expert is necessary to provide a
context for these post-closing statements, defendants have long
been well aware that plaintiffs attached some weight to these
post-closing activities.
Nothing prevented the defendants from
presenting an expert on that subject as part of its defense, and
it is possible that witnesses on the parties’ recently filed
witness lists, several of whom are attorneys, could provide such
testimony.
The defendants’ motion to exclude evidence and argument
concerning post-closing conduct is therefore denied, albeit -as noted supra -- without prejudice to defendants challenging
the introduction of specific evidence concerning this subject at
trial.
C.
Defendants’ motion in limine no. 3: Banking records15
Defendants also seek to exclude certain bank records that
plaintiffs obtained from two third-party banks via subpoenas
15
Document no. 93.
26
served on March 3, 2016.16
Defendants challenge the documents as
untimely and irrelevant.
As to timeliness, Rockwood procured the documents, and
produced them to defendants, after the close of discovery.
This, defendants argue, prevented defendants from conducting
appropriate discovery into the documents.
To the extent that
the subpoenas in question were trial subpoenas (see Fed. R. Civ.
P. 45(a)(1)), they were not governed by the discovery deadline.
Even if the subpoenas were actually issued in discovery (see
e.g. Fed. R. Civ. P. 45(c)(2)) Rockwood represents that the
documents so obtained are merely certified copies of bank
records that were produced to defendants during the course of
discovery -- indeed, before defendants deposed any witnesses in
this case.
Insofar as this characterization of the documents is
accurate, the defendants had ample opportunity to conduct
discovery into the content of the documents and, accordingly,
During an informal discovery dispute conference, defendants
challenged Rockwood’s issuance of trial subpoenas that called
for production of documents at plaintiff’s counsel’s office
after discovery closed but more than six weeks before trial.
The court expressed its skepticism regarding the technical
propriety of this use of trial subpoenas, see infra n. 18, but
allowed Rockwood to proceed with the subpoenas upon the parties’
agreement that Rockwood would produce the resulting documents to
defendants immediately upon receipt. See Order of March 9, 2016
(document no. 85) at 2.
16
27
are not prejudiced by the late production of certified copies.17
The court therefore will not exclude them on timeliness grounds.
Defendants’ challenge to the documents’ relevance, at least
as a broad category, is also misplaced.
Rockwood has alleged
that Attorney McGinley represented to Rockwood that McAdam had
no financial interest in the company whose rent payments McAdam
would use to repay the loan -- Monster Storage.
To the extent
Rockwood seeks to introduce the bank records as evidence that
McAdam did have such a financial interest, as defendants
predict, see Defendants’ Mot. in Limine (document no. 93) at 15,
the bank records may have a tendency to make the falsehood of
Attorney McGinley’s Monster Storage-related representation more
likely than it would be without those records.
See Fed. R.
This is not to say that the court endorses the use of a
Rule 45 subpoena to require production of documentary evidence
at counsel’s office well in advance of trial. Subpoenas are
properly utilized to effectuate the production of documents or
things to a proceeding such as a trial, hearing, or deposition.
It seems to the court that requesting or allowing a subpoena
recipient to provide copies to counsel in lieu of the proceeding
is normally not inappropriate. Requesting production of
originals to counsel in advance of a proceeding as a way of
complying with a subpoena, however, strikes the court as less
than proper, and as creating the potential for abuse of process.
The court takes no position as to whether that took place here,
but notes that plaintiff’s counsel represent that they produced
the non-certified copies to defendants in July 2015.
Plaintiff’s counsel were well positioned, then, to obtain
certified copies of these documents before discovery closed on
December 2, 2015, some five months later.
17
28
Evid. 401.
And the truthfulness of that representation is
certainly of consequence in this action.
Id.
Accordingly, the defendants’ motion to exclude these
documents, as a broad category, is denied.
D.
Defendants’ motion in limine no. 4: 2006
representation in the 2006 Ohio litigation18
Finally, defendants seek to exclude any evidence or
argument concerning Devine’s representation of McAdam in
litigation against Ohio Attorney Jack Donenfeld before an Ohio
state court in 2006.
Defendants argue that any such evidence is
irrelevant because Attorney McGinley has already admitted that,
at the time she wrote the opinion letter, she was aware that the
Ohio court found McAdam to have committed fraud on the court
during that action.
The court rejected this argument during
discovery, see Rockwood, 2015 DNH 135, 20-21, and rejects it
again here.
“Federal Rule of Evidence 401 does not restrict
relevance to evidence directed at disputed facts.”
Jenks v.
Textron, Inc., 2012 DNH 119, 7-8.
Even if relevant, defendants argue, such evidence is
unfairly prejudicial, delaying, a waste of time, and cumulative.
See Fed. R. Evid. 403 (the court may exclude relevant evidence
“if its probative value is substantially outweighed by a danger
18
Document no. 93.
29
of . . . unfair prejudice, . . . undue delay, wasting time, or
needlessly presenting cumulative evidence.’”).
First,
defendants have not identified any way in which introduction of
evidence concerning Devine’s representation of McAdam in the
2006 Ohio litigation would prejudice Attorney McGinley or
Devine.
Second, defendants’ argument that the 2006 Ohio
litigation evidence will be cumulative, cause undue delay, or
waste time is premised on the notion that any evidence
concerning facts that Attorney McGinley has already admitted
would satisfy those conditions.
But, as the court has
previously observed, such evidence may be relevant to more than
merely whether McAdam was aware of the Ohio litigation.
Rockwood, 2015 DNH 135, 15-16.
See
It may, for example, be relevant
to Attorney McGinley’s intent in making the alleged
misrepresentation in the opinion letter, to Devine’s knowledge
of the findings concerning McAdam, or the credibility of
McGinley or other witnesses.
Further, Attorney McGinley is not
the sole defendant in this action, or the only employee of the
Devine firm whose knowledge, conduct, and intent regarding the
Ohio litigation could be relevant in this action.
As such,
Attorney McGinley’s admission as to her knowledge does not
necessarily render all evidence concerning the 2006 Ohio
litigation cumulative, delaying, or time-wasting.
30
Finally, defendants again advance the unsupported argument
that such evidence is inadmissible absent an attorney expert to
provide the jury with the standard of care expected of an
attorney representing a client in litigation.
That argument
fails here for the same reasons discussed supra Part II.C.
Defendants’ motion to exclude all evidence and argument
about Devine’s representation of McAdam in the 2006 Ohio
litigation is therefore denied.
To the extent that Rockwood
intends to offer evidence concerning the 2006 Ohio litigation
for purposes not identified by the defendants, such as to call
Attorney McGinley’s credibility into question, the court of
course renders no ruling at this time.
E.
Defendants’ motion to preclude testimony of Devine
attorneys19
Finally, defendants move to preclude Rockwood from calling
five attorneys, currently or formerly associated with defendant
Devine, Millimet & Branch, PA, to testify, and to preclude
Rockwood from using certain demonstrative exhibits at trial.
1.
Attorneys Will, Pacik, and Johnson
The defendants ask the court to exclude the testimony of
Attorneys Dan Will, Danille Pacik, and Matt Johnson.
This
argument is based on defendants’ contention that evidence
19
Document no. 131.
31
concerning defendants’ pre- and post-closing activities is not
admissible.
See Parts II.B and II.D.
As the court denies those
motions to exclude, wholesale, evidence of those activities, see
id., the court also denies defendants’ motion to exclude,
wholesale, the testimony of these witnesses for the same
reasons.
2.
Attorneys Gayman and DiCroce
Defendants also seek to exclude testimony by two members of
Devine’s opinion committee, Attorneys Benjamin Gayman and
Camille DiCroce, who testified in deposition that they lack
knowledge of the specific opinion letter at issue in this
litigation.
Rockwood, in its objection, indicates its intention
to introduce testimony by these witnesses concerning the process
by which Devine issued opinion letters in 2011, arguing that the
process is highly relevant to the defendants’ intent in making
the alleged misrepresentations in the opinion letter at issue.
While the court is underwhelmed by Rockwood’s argument -particularly in light of the court’s order of May 3, 2016, that
said objection should contain a “complete description of the
evidence” Rockwood intended to introduce through this testimony,
and its relevance -- it declines to prohibit Rockwood from
calling any particular witness on a pretrial basis.
Rockwood
should, however, take care to order its witnesses with care, and
32
should be prepared for the court to preclude cumulative evidence
at trial under Federal Rule of Evidence 403 for “wasting time.”
Fed. R. Evid 403.
Rockwood should further be prepared to
proffer testimony under Rules 103(c) and 104(c) in order for the
court to make such determinations.
F.
Plaintiff’s motion in limine no. 1:
material20
Regulatory
Rockwood seeks to prevent the defendants from cross
examining Rockwood’s principal, Dan Purjes, concerning a
National Association of Securities Dealers (“NASD”) hearing
panel decision from 2001 that censured Purjes and his financial
firm for engaging in a “pump and dump” style stock sale.
Rockwood contends that the NASD hearing panel decision is not
probative of Purjes’s character for truthfulness and is too
remote in time such that any cross examination on the subject
should be disallowed.
See Fed. R. Evid. 608(b); United States
v. Thiongo, 344 F.3d 55, 59 (1st Cir. 2003).
The court grants
Rockwood’s motion in part and denies it in part.
The court may permit inquiry into “specific instances of a
witness’s conduct . . . if they are probative of the [witness’s]
character for truthfulness or untruthfulness.”
608(b).
20
Fed. R. Evid.
The NASD hearing panel’s specific findings that Purjes
Document no. 94.
33
made false statements or misrepresentations are probative of
Purjes’s character for truthfulness.
See Fed. R. Evid. 608(b).
Specifically, the NASD hearing panel’s findings that Purjes gave
false testimony at the hearing and that Purjes intentionally
withheld material information from customers who purchased
shares from him or his firm are sufficiently “similar to the
conduct at issue,” that is, the credibility of Purjes’s
testimony at trial, to be admissible as impeachment material
under Rule 608(b).
See Thiongo, 344 F.3d at 60; see also
Caluori v. One World Techs., Inc., No. CV 07-2035 CAS VBKX, 2012
WL 2004173, at *10 (C.D. Cal. June 4, 2012) (evidence of prior
frauds probative of witness’s character for truthfulness).
Though Rockwood contends that these findings, dating back
to 2001, are too remote in time to be probative to Purjes’s
present character for truthfulness, the court disagrees.
See
United States v. Ulloa, 942 F. Supp. 2d 202, 207 (D.N.H. 2013)
(allowing cross examination under Rule 608(b) on instances of
conduct that occurred 14 years prior to testimony).
While the
distance in time between 2001 and Purjes’s testimony in this
trial may be a valid consideration if Purjes had been
exceedingly young and inexperienced at the time of those
findings, he was not.
The acts for which Purjes was censured
occurred well into his adult life and business career, and are
34
sufficiently probative of his character for truthfulness to
permit inquiry under Rule 608(b).
Nor is such evidence unfairly prejudicial.
Purjes’s
character for truthfulness is not of minor significance in this
case.
For example, the jury will be required to assess the
credibility of his testimony regarding Attorney McGinley’s
alleged representation regarding the Monster Storage lease
relationship, as well as his claims that he relied on Attorney
McGinley’s representations at issue in this action when deciding
whether to enter into the loan agreement with McAdam, and that
he would not have made the loan had the alleged
misrepresentation not been made.
Accordingly, defendants may
inquire into those acts under Rule 608(b).
Not everything in the NASD hearing panel decision is fair
game on cross examination, however.
Evidence of the underlying
offense for which Purjes was censured -- the “pump and dump”
style stock sale, itself -– is, at best, marginally relevant to
any claim or defense in this action.
And the stretch of time
between that conduct and Purjes’ testimony, as well as the
likely resulting prejudicial effect of evidence that Purjes is a
known stock manipulator, outweighs any probative value it may
have as to his character for truthfulness.
Evid. 403.
See Fed. R.
Fraudulent conduct may be, but is not necessarily,
probative as to truthfulness in the same way that factually
35
false statements or testimony are.
But see United States v.
Lanier, No. CRIM. H-10-258-4, 2014 WL 2331659, at *2 (S.D. Tex.
May 29, 2014) (“The questions about the acquisition and sale of
the . . . stock were within Rule 608 because, to the extent they
implicated [the witness] in a fraudulent pump-and-dump scheme, .
. . the questions were relevant to his truthfulness.”).
G.
Plaintiff’s motion in limine no. 2: Enright
allegations21
Rockwood also moves to preclude defendants from introducing
any evidence of civil complaints and criminal and bankruptcy
proceedings brought against Rockwood’s agent, Todd M. Enright.
This motion is also granted in part and denied in part.
As discussed supra Part II.F, the court may permit inquiry
into “specific instances of a witness’s conduct . . . if they
are probative of the [witness’s] character for truthfulness or
untruthfulness.”
Fed. R. Evid. 608(b).
Rule 608(b) “does not
require the proponent to establish prior untruthful conduct by
the witness to a certainty before inquiring about it,” but
requires only that the proponent possess “some facts which
support a general belief that the witness committed the offense
or the degrading act to which the question relates.”
21
Document no. 95.
36
Ulloa, 942
F. Supp. 2d at 205 (quoting United States v. Whitmore, 359 F.3d
609, 622 (D.C. Cir. 2004)).
Findings by a tribunal that an individual engaged in
particular behavior ordinarily satisfy that requirement, and do
so here.
Defendants accordingly may cross examine Mr. Enright
concerning the District of Vermont bankruptcy court finding that
Enright engaged in a “pattern of intentional deceit” to induce
certain creditors into real estate loans.
Indeed, Rockwood
concedes that the Vermont bankruptcy court’s findings are fair
game for cross examination.
See Plaintiff’s Mem. in Support of
Mot. in Limine (document no. 95-2) at 1 n.1.
And, as with
Purjes, Enright is one of Rockwood’s primary witnesses.
The
court understands that Enright will testify that Attorney
McGinley represented that Monster Storage existed independently
of McAdam; Attorney McGinley, the court understands, denies
making such a representation.
Enright’s credibility is thus
relevant and subject to inquiry under Rule 402 and 608(b) for
the same and similar reasons discussed infra at Part II.F. as to
Purjes.
But the same does not necessarily hold true for the
unproven allegations in the Maine and Vermont civil actions.
To
the extent that Enright confessed judgment in those cases, he
did so only as to breach of contract claims, not the fraud or
misrepresentation claims asserted against him.
37
Furthermore, the
decision of the District Court for the District of Maine, cited
by defendants, recites facts in the summary judgment context,
where all inferences are made in the non-moving party’s favor.
See Nagle v. Middlebury Equity Partners, LLC, 674 F. Supp. 2d
290, 292-93 (D. Me. 2009).
Accordingly, unless Enright’s
testimony somehow opens the door for further inquiry in that
direction, Devine may not inquire under Rule 608(b) as to the
unproven Maine and Vermont civil action allegations against
Enright under Rule 608(b).
Finally, defendants seek to introduce evidence of divorce
proceedings in which Enright participated concurrent with his
due diligence on the loan at issue in this action.
As
defendants point out, evidence of Enright’s dire financial
situation during that period -- and, in particular, the fact
that Enright faced the possibility of incarceration for contempt
of court for non-payment -- may be relevant to Enright’s
motivation for closing on the loan.
The reason that Enright was
in such straits, however -- that he was delinquent in child
support payments -- lacks relevance to Enright’s motivation or,
at least, is not sufficiently probative thereto in light of its
potential for prejudice, and will be excluded.
Evid. 403.
See Fed. R.
Accordingly, the defendants may introduce evidence
of and inquire into Enright’s financial situation and possible
consequences (incarceration for contempt), but not the
38
underlying, potentially prejudicial grounds therefor (nonpayment
of child support).
Miscellaneous motions
A.
Plaintiff’s contempt motion22
According to Rockwood, Martha McAdam failed to comply with
one deposition subpoena, claiming illness on the date of the
deposition, and has managed to avoid service of two subsequent
subpoenas.
Rockwood asks the court to hold McAdam in contempt
and also to exclude her testimony in light of the fact that she
has avoided being deposed.
At the final pretrial conference, counsel for all parties
represented that no party intends to call McAdam to testify at
trial.23
The court accordingly denies plaintiff’s motion as
moot, without prejudice to revisiting the issue in the event
that, contrary to expectation, McAdam is called to testify.
22
Document no. 96.
Though the court observes that defendants, in their final
witness list, yet indicate that they “may call” McAdam to
testify. See document no. 129.
23
39
B.
Defendants’ motions to compel or exclude evidence24 and
to continue trial25
On the eve of the final pretrial conference, defendants
moved to compel the plaintiffs to produce documents and
deponents concerning plaintiff’s claims for fees and costs
associated with their attempt to collect on the defaulted loan,
and on plaintiff’s claim for enhanced compensatory damages.
Defendants brought this motion in light of the fact that
plaintiff produced some such documents on April 12, 2016, a mere
two weeks before the final pretrial conference, and raised the
specter of enhanced compensatory damages26 well after discovery
closed.
Defendants also moved to continue the trial to allow
time for this requested discovery.
24
Document no. 123.
25
Document no. 124.
Defendants preface their motion to compel discovery into
enhanced compensatory damages by implying that the court has
already ruled on whether the plaintiff will be permitted to
offer evidence in support of such a claim. See Mot. to Compel
(document no. 124) at 5-6. It has not. Rather, during the
April 20, 2016 telephone conference -- and again at the final
pretrial conference -- the court noted that the complaint
arguably alleges facts supporting such a claim. It further
noted that defendants have not offered any authority squarely
requiring plaintiff to include a request for such damages (by
name or by articulating the applicable legal standard) in its
prayer for relief before being allowed to present evidence on
such a claim. Thus, the court had gone no further than
expressing its disinclination to preclude enhanced compensatory
damages outright in a pretrial ruling.
26
40
During the final pretrial conference, counsel for Rockwood
represented that Rockwood would withdraw any reliance on the
tardily-produced documents if it would keep the trial on
schedule.
In light of this representation, counsel for the
defendants withdrew defendants’ motion to compel additional
discovery as to plaintiff’s claim for costs and fees.
Moreover, while counsel for the defendants clearly and
forcefully expressed their opinion that the purported lack of
clear pleading on such damages was impermissible, they did not
(and presumably could not) articulate what, if any, additional
discovery they would conduct into plaintiff’s claim for enhanced
compensatory damages.
Whether plaintiff is entitled to such
damages turns on the defendants’ motive and the egregiousness of
defendants’ conduct.
Figlioli v. R.J. Moreau Companies, Inc.,
151 N.H. 618, 621 (2005) (“When an act is wanton, malicious, or
oppressive, the aggravating circumstances may be reflected in an
award of enhanced compensatory damages.”).
The parties here
have fully explored the conduct itself, and the evidence
thereof, in discovery in this action.
The defendants’ motion to
compel additional discovery on this issue is therefor denied.
The defendants requested a continuance of the trial to
afford them time to conduct the requested discovery.
Because
the court denies the defendants’ motion to compel, for the
41
reasons discussed above, the court also denies defendants’
motion to continue the trial.
Conclusion
For the foregoing reasons:
Defendants’ motion to exclude the supplemental expert
report of Jonathan E. Hochman27 is GRANTED.
Plaintiff’s motion to exclude the expert opinion and
testimony of John R. Levine28 is DENIED.
Defendants’ first motion in limine29 is GRANTED-IN-PART and
DENIED-IN-PART.
Their second, third, and fourth motions in
limine30 and their motion in limine to preclude testimony from
certain Devine attorneys31 are DENIED.
Plaintiff’s first and second motions in limine32 are
GRANTED-IN-PART and DENIED-IN-PART.
27
Document no. 66.
28
Document no. 67.
29
Document no. 93.
30
Document no. 93.
31
Document no. 131.
32
Document nos. 94 and 95.
42
Plaintiff’s motion to hold Martha McAdam in contempt of
court and/or to exclude her testimony33 is DENIED without
prejudice.
Defendants’ motion to compel damages documentation, for
sanctions, and to re-open discovery34 and motion to continue the
trial35 are DENIED.
SO ORDERED.
____________________________
Joseph N. Laplante
United States District Judge
Dated:
cc:
May 6, 2016
Matthew B. Byrne, Esq.
Norman Williams, Esq.
Robert F. O’Neill, Esq.
David A. Boyd, Esq.
Petra A. Halsema, Esq.
Finis E. Williams, III, Esq.
James C. Wheat, Esq.
Pierre A. Chabot, Esq.
33
Document no. 96.
34
Document no. 123.
35
Document no. 124.
43
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