Campbell v. CGM, LLC

Filing 64

ORDER granting 51 Motion to Strike Exhibit G to 49 Objection to Motion. So Ordered by Judge Joseph A. DiClerico, Jr.(gla)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
Christopher Campbell
v.

Civil No. 15-cv-088-JD
Opinion No. 2016 DNH 212

CGM, LLC
O R D E R
Christopher Campbell, brings this action against his former
employer, CGM, LLC, asserting claims for breach of contract;
fraud, deceit and misrepresentation; violation of the New
Hampshire Consumer Protection Statute RSA Chapter 358-A; and
unpaid wages.

Both Campbell and CGM have filed motions for

summary judgment.

Campbell now moves to strike the declaration

of Duane Szarek submitted by CGM in support of its objection to
Campbell’s motion for summary judgment.

CGM objects to the

motion to strike.1
Background
Christopher Campbell is an electrical engineer who founded
a telecommunications company called Intellinet, Inc.

In 2000,

Intellinet began doing contract work for CGM, a company in
Georgia in the business of telecommunications consulting that

CGM filed a “corrected” objection on November 23, 2016,
which included the exhibits that were cited in but not provided
with the original objection.
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was owned by Christopher Campbell’s twin brother, Charles
Campbell, and Kevin Murphy.

Christopher and Charles began

negotiations for Christopher to work for CGM that culminated in
an offer made to Christopher by CGM.

At that time, another

company, CCG Consulting, was considering acquiring CGM.
Christopher signed an employment agreement in May of 2001
and began working for CGM in June.

Based on the terms of the

employment agreement, Christopher expected to receive annual
bonuses but no bonuses were paid.

CGM disputes the existence of

an enforceable employment agreement and its terms.
When Christopher inquired about bonuses, he was told that
CGM had no earnings so that no bonuses could be paid.

A few

years later, CGM reduced Christopher’s salary, again citing
financial issues.

Christopher continued to ask for more money,

but his requests were denied.

Beginning in 2009, CGM paid

Christopher commissions on revenue from certain customers, but
the amount of commissions to be paid generated issues between
Christopher and CGM.
Discussions about Christopher’s role in the company and his
pay structure continued until November of 2014 when Christopher
experienced a breakdown.

Christopher did not return to work

during December of 2014 and January of 2015.

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CGM terminated his

employment effective January 15, 2015.

Christopher then brought

this action against CGM.
Christopher disclosed Paul Hendrickson, CPA, as an expert
witness in this case, and provided Hendrickson’s report to CGM.
CGM had Hendrickson’s report reviewed by Duane Szarek, CPA, who
has served as CGM’s accountant since 2014.

CGM did not disclose

Szarek, or anyone else, as an expert.
CGM did disclose Szarek as a possible witness who might
testify at trial under Federal Rule of Civil Procedure 26(a)(1).
As part of that disclosure, CGM stated that Szarek had knowledge
of the circumstances when Christopher Campbell was hired at CGM
in 2001, about CGM’s income in 2002 through 2004, and about
CGM’s profits since then and its revenue and earnings.

CGM also

represented that Szarek could testify that CGM did not
manipulate its revenue or earnings or divert funds to CGM’s
owners, that he could give his opinion about the veracity of
CGM’s “current and historic financial data and condition,” and
about the “accuracy and veracity” of CGM’s books, records,
financial data, and reporting.

When Szarek was deposed,

however, he explained that he was hired by CGM in the middle of
2014, that he had no knowledge about Christopher Campbell’s
contribution to the company in 2001, did not know whether CGM
had generated significant profits, and did not know whether

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CGM’s owners had misrepresented, manipulated, or diverted the
company’s revenue and earnings.

Szarek also denied knowledge of

CGM’s past data and financial circumstances.
Standard of Review
“[A] party must disclose to the other parties the identity
of any witness it may use at trial to present evidence under
Federal Rule of Evidence 702, 703, or 705.”
26(a)(2)(A).

Fed. R. Civ. P.

In addition, “this disclosure must be accompanied

by a written report—prepared and signed by the witness—if the
witness is one retained or specially employed to provide expert
testimony in the case or one whose duties as the party’s
employee regularly involve giving expert testimony.”
Civ. P. 26(a)(2)(B).

Fed. R.

“If a party fails to provide information

or identify a witness as required by Rule 26(a) or (e), the
party is not allowed to use that information or witness to
supply evidence on a motion, at a hearing, or at trial, unless
the failure was substantially justified or is harmless.”
R. Civ. P. 37(c)(1).

Fed.

The court may order other sanctions

instead of or in addition to excluding the evidence.

Id.

Discussion
Christopher Campbell moved for partial summary judgment on
his breach of contract claim and CGM’s counterclaims for breach

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of contract, conversion, violation of the Computer Fraud and
Abuse Act, tortious interference, punitive damages, and an
injunction.

In support of its objection to Campbell’s motion

for summary judgment, CGM submitted Szarek’s declaration with
his curriculum vitae and three attached exhibits.

Campbell

moves to strike Szarek’s declaration because CGM did not
disclose Szarek as an expert in this case.
CGM objects to the motion to strike.

In support, CGM first

argues that motions to strike under Federal Rule of Civil
Procedure 12(f) are not favored.
brought under Rule 12(f).

Campbell’s motion is not

Therefore, CGM’s objection based on

Rule 12(f) is inapposite to the motion filed.
CGM asserts that Szarek is not offered as an expert so that
no disclosure was required.

CGM asserts that Szarek offers lay

opinion under Federal Rule of Evidence 701 and that Szarek is a
fact witness who is providing information based on his personal
knowledge and perceptions.

In addition, CGM argues that

Campbell “opened the door to Szarek’s testimony on damages” when
Campbell’s attorney asked Szarek about the expert’s opinion
during Szarek’s deposition, and that Campbell’s objection about
the substance of the declaration does not support his motion.
As a fall-back position, CGM contends that even if some of the
declaration is excluded as expert opinion, other parts, that are

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not identified, should not be excluded and the exhibits attached
to the declaration should be considered.
A.

Lay Opinion and Fact Witness
“If a witness is not testifying as an expert, testimony in

the form of an opinion is limited to one that is:

(a)

rationally based on the witness’s perception; (b) helpful to
clearly understanding the witness’s testimony or to determining
a fact in issue; and (c) not based on scientific, technical or
other specialized knowledge within the scope of Rule 702.”
R. Evid. 701.

Fed.

Lay opinion must be based on reasoning that is

familiar in everyday life and on things personally observed by
the witness rather than on specialized knowledge or training.
United States v. Vega, 813 F.3d 386, 394-95 (1st Cir. 2016);
Providence Piers, LLC v. SMM New England, Inc., 2015 WL 9699936,
at *8-*9 (D.R.I. Oct. 1, 2015); United States v. Tanguay, 895 F.
Supp. 2d 284, 289 (D.N.H. 2012).
In the area of a business’s financial information, a lay
witness may be allowed to testify under Rule 701 “based on the
witness’s own perceptions and knowledge and participation in the
day-to-day affairs of the business.”

A.J. Amer Agency, Inc. v.

Astonish Results, LLC., 2014 WL 3496964 at *22 (D.R.I. July 11,
2014) (internal quotation marks omitted); see also Hand v. N.J.
St. Ath. Control Bd., 2016 WL 5886877, at *3-*4 (D.N.J. Oct. 7,
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2016).

For that reason, a company’s accountant with personal

knowledge of the company’s books may testify about the specific
factual information with which he is familiar from his work,
that is, the accountant’s personal knowledge based on his
ordinary duties.

See United States v. Rigas, 490 F.3d 208, 225

(2d Cir. 2007); Teen-Ed, Inc. v. Kimball Int’l, Inc., 620 F.2d
399, 403-04 (3d Cir. 1980); Ga. Operaters Self-Insurers Fund v.
PMA Mgmt. Corp., 143 F. Supp. 3d 1317, 1337 (N.D. Ga. 2015).

On

the other hand, a witness, even the owner or officer of a
business, cannot give opinions that require specialized
accounting information or rely on a report or other input from
third parties.

James River Ins. Co. v. Rapid Funding, LLC, 658

F.3d 1207, 1214-16 (10th Cir. 2011).
Szarek states in his declaration that he reviewed
Hendrickson’s report and provides his opinions of Hendrickson’s
calculations of CGM’s annual earnings.

He then provides his own

opinions about Hendrickson’s calculations and the reasons
supporting his opinions, including reference to an exhibit
titled “Robust Salary and Cost of Living Data at Your
Fingertips” from the “Economic Research Institute.”

As is clear

from Szarek’s deposition testimony, the information in his
declaration is not based on Szarek’s personal knowledge or his

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every-day perceptions of business at CGM from his accounting
work there.
In his calculations, Szarek reviews CGM’s tax returns from
2001 through 2008, and 2010 through 2014.

Szarek, however, did

not begin to provide accounting services to CGM until 2014.

CGM

does not explain how Szarek had personal knowledge of the
specific information he references from tax returns filed long
before he began providing services to CGM, and Szarek’s
deposition testimony contradicts that basis for the declaration.
Therefore, CGM has not shown that information taken from those
tax returns, other than possibly 2014, are part of Szarek’s
personal knowledge and work experience at CGM.
As a result, Szarek’s declaration does not provide lay
opinion within the meaning of Rule 701 nor is Szarek providing
facts based on his personal knowledge.

CGM’s argument that

Szarek merely did simple arithmetic ignores the sources of his
information and his specialized knowledge of accounting
practices necessary to address CGM’s income, deductions, profit
and loss, and compensation.

Further, Szarek’s opinions about

Hendrickson’s calculations are not matters within his personal
knowledge based on his day-to-day work for CGM.

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B.

Invited Testimony
CGM asserts that Campbell “opened the door” to Szarek’s

testimony on damages when Campbell’s counsel asked Szarek at his
deposition if he agreed with Hendrickson’s calculations.

CGM

provides no authority to support an invited testimony theory in
the context of summary judgment or to allow an undisclosed
expert based on that theory.
CGM further argues, relying on United States v. CandelariaSilva, 162 F.3d 698, 707 (1st Cir. 1998) that Szarek’s
declaration is “curative” of otherwise inadmissible evidence.
In Candelaria-Silva, the court allowed the government to
question a witness about the defendant’s drug activities to
correct a misimpression from defense counsel’s questioning that
the defendant had not been involved.

Id.

Even if “curative

admissibility” would apply in the context of summary judgment,
CGM does not identify any inadmissible evidence submitted for
purposes of the summary judgment motions that Szarek’s
declaration would correct.
C.

Partial Exclusion
CGM states in a conclusory manner that not all of Szarek’s

declaration and supporting exhibits should be struck as expert
opinion.

CGM, however, does not explain what portions or

exhibits might be allowed.

The court declines to make that
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determination in the absence of a specific request by CGM
supported by appropriate argument and authority.
D.

Result
CGM has not shown that Szarek’s declaration is lay opinion

under Rule 701 or that Szarek merely provides facts and simple
arithmetic.

Instead, Szarek’s declaration provides expert

opinion about the validity of Hendrickson’s expert report and
about calculating CGM’s annual income during periods that
predate Szarek’s work as an accountant for CGM.

Szarek’s

opinions are offered to oppose Christopher Campbell’s claims in
this case.
It is undisputed that CGM did not disclose Szarek as an
expert witness and did not provide the information required by
Rule 26(a)(2).

CGM has made no argument that its failure to

make the required disclosures was substantially justified or
harmless.

Therefore, Szarek’s declaration cannot be considered

for purposes of summary judgment and is struck.

Civ. P.

37(c)(1).
Conclusion
For the foregoing reasons, the plaintiff’s motion to strike
(document no. 51) is granted.

The declaration of Duane Szarek

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is struck and will not be considered for purposes of summary
judgment.
SO ORDERED.

__________________________
Joseph DiClerico, Jr.
United States District Judge
November 29, 2016
cc:

Matthew T. Gomes, Esq.
Timothy John McLaughlin, Esq.
P. Shane O’Neill, Esq.
David P. Slawsky, Esq.

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