Eischen v. Adaptation Financial Ventures, Inc. et al

Filing 115

OPINION and ORDER issued granting 88 Defendant Adaptation's Motion to Bifurcate Punitive Damages; denying 89 Adaptation's Motion to Exclude Evidence or Argument Relating to Other Lawsuits; granting in part and denying in part 90 Adap tation's Motion to Exclude Evidence of Punitive Damages; denying 91 Adaptation's Motion to Exclude Evidence of Law Wages Incurred After Retirement; granting in part and denying in part 92 Plaintiff's Motion to Exclude Evidence and Argument Contradicting the Court's Opinion and Order; denying as moot 93 Plaintiff's Motion to Exclude Expert Testimony on Securities Law; denying 94 Plaintiff's Motion to Exclude Testimony or Other Evidence Regarding Certain Purpo rted Client Communications; granting 98 Plaintiff's Motion to Preclude Evidence or Testimony Regarding Dismissed Parties and Claims; denying 99 Plaintiff's Motion to Preclude Defendants from Offering Expert Opinion Testimony or Similar Evidence Related to Damages and denying 100 Plaintiff's Motion to Exclude Details of Defendant Alan Niemann's March 2021 Accident. Signed by Chief District Judge Sarah D. Morrison on 11/26/24. (sem)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
MICHAEL EISCHEN,
Plaintiff,

:
Case No. 2:21-cv-5837
Chief Judge Sarah D. Morrison
Magistrate Judge Elizabeth A.
Preston Deavers

v.
ADAPTATION FINANCIAL
VENTURES, INC., et al.,

:

Defendants.
OPINION AND ORDER
Michael Eischen filed this action against Adaptation Financial Advisers, Inc.,
APN Adaptation Financial Holdings LLC, and Alan Niemann after Adaptation
terminated his employment.1 (ECF No. 8.) Adaptation then filed counterclaims
against Mr. Eischen. (ECF No. 16.) After discovery and briefing, this Court granted
summary judgment on certain of Mr. Eischen’s claims and Adaptation’s
counterclaims. (ECF No. 80.) The remaining claims and counterclaims will be tried
to a jury on January 21, 2025. (ECF No. 112.) The parties’ pretrial motions are now
pending; the Court will address each in turn.
I.

LEGAL STANDARDS
A motion in limine allows a court to make an advance ruling on the evidence

that will be admissible at trial. “Although the Federal Rules of Evidence do not

1 Mr. Eischen also sued Cambridge Investment Research, Inc. (Am. Compl.)

None of those claims survived summary judgment. (ECF No. 80.)

explicitly authorize in limine rulings, the practice has developed pursuant to the
district court’s inherent authority to manage the course of trials.” Luce v. United
States, 469 U.S. 38, 41 n.4 (1984). The motions thus “narrow the issues remaining
for trial” and “minimize disruptions at trial.” United States v. Brawner, 173 F.3d
966, 970 (6th Cir. 1999).
To obtain the in limine exclusion of evidence, a party must prove that the
evidence is clearly inadmissible on all potential grounds. See In re E.I. du Pont de
Nemours & Co. C-8 Pers. Inj. Litig., 348 F. Supp. 3d 698, 721 (S.D. Ohio 2016)
(Sargus, J.). Still, a ruling on a motion in limine is “no more than a preliminary, or
advisory, opinion that falls entirely within the discretion of the district court, and
the district court may change its ruling where sufficient facts have developed that
warrant the change.” United States v. Yannott, 42 F.3d 999, 1007 (6th Cir. 1994).
The Court will therefore hear objections to evidence as they arise at trial, even if the
proffered evidence falls within the scope of a denied motion in limine.
II.

DEFENDANTS’ PRETRIAL MOTIONS
A.

Motion to Bifurcate Punitive Damages (ECF No. 88)

Defendants first move to bifurcate trial, with the issue of punitive damages
being reserved until a finding has been made on liability and compensatory
damages. Mr. Eischen does not oppose bifurcation. (ECF No. 104.) The Motion (ECF
No. 88) is GRANTED; the trial will be bifurcated.
B.

Motion to Exclude Evidence of Punitive Damages (ECF No. 90)

In addition to bifurcating trial on the issue of punitive damages, Defendants
ask the Court to exclude any evidence pertaining to punitive damages from the
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liability/compensatory damages phase of the trial. Mr. Eischen does not oppose to
the extent that the evidence relates solely to the determination of punitive
damages. (ECF No. 104.) The Court adopts Mr. Eischen’s more narrow construction
of the issue. Evidence that relates solely to the issue of punitive damages will be
excluded from the liability/compensatory damages phase of trial. The Motion (ECF
No. 90) is thus GRANTED in part and DENIED in part.
C.

Motion to Exclude Evidence or Argument Relating to Other
Lawsuits (ECF No. 89)

Defendants next ask the Court to exclude evidence or argument relating to
other lawsuits. Defendants’ motion is entirely vague and allusive. Although Mr.
Eischen suggests that Defendants have a particular Texas lawsuit in mind, the
motion makes no such specific reference. The Court is thus unable to determine
whether evidence or argument relating to another lawsuit may be relevant or
admissible. The Motion (ECF No. 89) is DENIED.
D.

Motion to Exclude Evidence of Lost Wages Incurred After
Retirement (ECF No. 91)

Finally, Defendants ask the Court to exclude evidence of lost wages. They
argue that Mr. Eischen “voluntarily retired,” thus precluding damages for lost
wages. (ECF No. 91.) Meanwhile, Mr. Eischen asserts that he would have continued
working as an Investment Advisory Representative but-for the termination. (ECF
No. 102 (citing Eischen Dep., 8:2–4).) That fact-question aside, mitigation of
damages is an affirmative defense on which Defendants bear the burden of proof.
See Lake v. Love, 90 N.E.3d 36, 41 (Ohio Ct. App. 2017) (citing, inter alia, Chicago
Title Ins. Co. v. Huntington Nat’l Bank, 719 N.E.2d 955 (Ohio 1999)). In other
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words, if Defendants want to prevent an award for lost wages, they must offer
admissible evidence at trial that Mr. Eischen failed to properly mitigate those
damages. Granting the instant Motion would improperly shift that burden that Mr.
Eischen. The Motion (ECF No. 91) is DENIED.
III.

EISCHEN’S PRETRIAL MOTIONS
A.

Motion to Exclude Evidence and Argument Contradicting the
Court’s Opinion & Order (ECF No. 92)

Mr. Eischen first asks the Court to exclude all evidence and argument
contradicting the Court’s March 21, 2024 Opinion & Order (ECF No. 80) on
summary judgment. While the Court generally agrees with that principle, the
Motion’s specifics deserve closer consideration. Mr. Eischen asserts that four
categories of evidence and argument should be precluded from trial as contradicting
the March 21 Opinion:
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First, Mr. Eischen’s job performance;

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Second, Defendants’ liability for breach of the Promissory Note;

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Third, signature irregularities uncovered while Mr. Eischen led
Adaptation’s Ohio office; and

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Fourth, that Mr. Eischen breached any provision of the Employment
Agreement other than §§ 9(d) or 10(a).

On the second and fourth categories, the Court agrees. (See ECF No. 80, PAGEID
# 9741 (concluding as a matter of law that Defendants breached the Promissory
Note); id., PAGEID # 9760 (granting summary judgment to Mr. Eischen on
Defendants’ breach of contract counterclaim, except as to alleged breaches of

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Employment Agreement §§ 9(d) and 10(a)).) But the March 21 Opinion does not
support an order excluding the first or third.
As to the first, Mr. Eischen argues that Defendants should not be allowed to
present evidence of his performance as President of Adaptation’s Columbus office
because “[w]hether Good Cause existed to terminate [his] employment is no longer
at issue[.]” (ECF No. 92, PAGEID # 9835.) Mr. Eischen overreads the Court’s ruling.
While the March 21 Opinion concludes that Adaptation breached the Employment
Agreement’s notice-and-cure provisions regardless of whether or not Adaptation had
Good Cause, that does not mean the Good Cause determination is now irrelevant.
In fact, whether Adaptation had Good Cause to terminate Mr. Eischen’s
employment is directly relevant to whether he is entitled to Severance Payments, a
question that the March 21 Opinion reserved for the jury. Evidence of Mr. Eischen’s
performance is properly offered for that purpose.
As to the third, Mr. Eischen argues that Defendants should be precluded
“from referencing ‘electronic forgery,’ or from arguing that ‘signature irregularities’
justified any of [their] conduct” because “the Court limited [the defamation claim] to
Niemann’s statement that Eischen sold variable annuities without the proper
license.” (Id., PAGEID # 9836.) Again, Mr. Eischen takes the Court’s conclusion out
of focus. The signature practices at Adaptation’s Columbus office—and Adaptation’s
discovery, investigation, and perception of those practices—are relevant for
purposes other than the defamation claim. For example, “signature irregularities”
were a “primary driving factor” for Cambridge to conduct a for-cause audit of Mr.

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Eischen’s office. (See ECF No. 80, PAGEID # 9728.) The Motion (ECF No. 92) is
GRANTED in part and DENIED in part.
B.

Motion to Exclude Expert Testimony on Securities Law (ECF
No. 93)

Mr. Eischen next moves the Court to prevent Defendants from offering any
expert opinion testimony on securities law. Defendants represent that they have no
intention of doing so. (ECF No. 110.) The Motion (ECF No. 93) is thus DENIED as
moot.
C.

Motion Regarding Certain Purported Client Communications
(ECF No. 94)

Next, Mr. Eischen asks the Court to exclude evidence “describing
communications between Defendants and any current or former Adaptation clients”
that reference Mr. Eischen’s “investment advisory practices relating to, inter alia,
client signatures” or communications with Mr. Eischen after his termination.2 (ECF
No. 94.) Out-of-court statements by third-parties are generally not admissible to
prove the truth of the matter asserted in the statement. See Fed. R. Evid. 801, 802,
803. But the evidence described in Mr. Eischen’s motion could be offered for a
purpose other than to prove the fact of the matter asserted. For example, Avery
Niemann testified that customers told her that Mr. Eischen sold them annuities.
(See ECF No. 94 (quoting Avery Niemann Dep., 21:18–23).) Although that
testimony is inadmissible to prove that annuities were sold, it may be offered to

2 Mr. Eischen also asks the Court to prevent Defendants from calling any of

Adaptation’s current or former clients to testify at trial. Defendants represent they
have no intention of doing so. This part of the Motion (ECF No. 94) is thus
DENIED as moot.
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prove that Adaptation “had evidence indicating” that Mr. Eischen acted outside the
scope of his license. That latter purpose goes to the heart of Mr. Eischen’s
defamation claim. (See ECF No. 80, PAGEID # 9747–48.)
So, to the extent Mr. Eischen seeks assurance that this Court will enforce the
Federal Rules of Evidence on hearsay, that assurance is given. Anything further is
better said in the context of trial. The Motion (ECF No. 94) is DENIED.
D.

Motion Regarding Dismissed Parties/Claims (ECF No. 98)

Mr. Eischen also moves for an order excluding evidence or testimony about
his dismissed claims for fraudulent inducement (against Adaptation) and tortious
interference (against Cambridge). His specific concerns are with evidence that
“relate[s] solely to Eischen’s dismissed claims” or that “references the fact that two
of Eischen’s claims were dismissed, [and] that Cambridge has been dismissed from
the case.” (ECF No. 98, PAGEID # 9983–84.) Mr. Eischen argues that the former
category is irrelevant, and the latter category risks undue prejudice. The Court
agrees. The Motion (ECF No. 98) is GRANTED.
Defendants fail to persuade otherwise. First, they argue that “Cambridge will
be highly relevant to this trial” because of its “relationship to Adaptation and the
for cause audit[.]” (ECF No. 107, PAGEID # 10306.) While that is true, Mr. Eischen
does not move to exclude any reference to Cambridge—he moves to exclude any
reference to the dismissed claims against Cambridge. Defendants next argue that
the jury should know Mr. Eischen so strongly believed that Cambridge caused his
damages that he filed suit against them. As evidence, that fact is not so probative as
to outweigh the prejudice it may cause in jurors’ minds. See Fed. R. Evid. 403.
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E.

Motion to Exclude Expert Testimony Related to Damages (ECF
No. 99)

In its fifth Motion in Limine, Mr. Eischen asks the Court to prevent
Defendants from offering any expert opinion testimony on damages. Defendants
represent that they have no intention of doing so. (ECF No. 111.) That portion of the
Motion (ECF No. 99) is thus DENIED as moot.
Mr. Eischen also asks the Court to exclude evidence related to damages that
Defendants used in response to his motion for summary judgment.3 (ECF No. 111
(citing ECF No. 62-5).) The Court declines to make a pre-trial ruling on the
admissibility of the subject evidence, and will consider objections and argument in
the context of trial. The balance of the Motion (ECF No. 99) is DENIED.
F.

Motion to Exclude Details of Niemann’s March 2021 Accident
(ECF No. 100)

Finally, Mr. Eischen moves the Court to exclude details of Alan Niemann’s
March 2021 motorcycle accident as irrelevant or unfairly prejudicial. (ECF No. 100
(citing Fed. R. Evid. 401, 403).) But, as Mr. Eischen concedes, “the fact of Niemann’s
accident and the fact that it impaired his memory” will likely be relevant. (ECF No.
100, PAGEID # 10097.) The same goes for the fact that the accident caused Alan
Niemann to walk with a “pronounced limp.” (See ECF No. 106, PAGEID # 10301.)
Given the extent of what may become relevant, the Court declines to exclude details
of the accident outside the context of trial. The Motion (ECF No. 100) is DENIED.

3 Although Mr. Eischen’s subsequent reply brief made passing reference to a

contemporaneous motion to exclude that evidence (see ECF No. 65, PAGEID
# 9671), none was filed.
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IV.

CONCLUSION
For the reasons above, the pending pretrial motions are decided as follows:
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Adaptation’s Motion to Bifurcate Punitive Damages (ECF No. 88) is
GRANTED.

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Adaptation’s Motion to Exclude Evidence or Argument Relating to Other
Lawsuits (ECF No. 89) is DENIED.

?

Adaptation’s Motion to Exclude Evidence of Punitive Damages (ECF No. 90)
is GRANTED in part and DENIED in part.

?

Adaptation’s Motion to Exclude Evidence of Law Wages Incurred After
Retirement (ECF No. 91) is DENIED.

?

Eischen’s Motion to Exclude Evidence and Argument Contradicting the
Court’s Opinion & Order (ECF No. 92) is GRANTED in part and DENIED
in part.

?

Eischen’s Motion to Exclude Expert Testimony on Securities Law (ECF No.
93) is DENIED as moot.

?

Eischen’s Motion to Exclude Testimony or Other Evidence Regarding Certain
Purported Client Communications (ECF No. 94) is DENIED.

?

Eischen’s Motion to Preclude Evidence or Testimony Regarding Dismissed
Parties and Claims (ECF No. 98) is GRANTED.

?

Eischen’s Motion to Preclude Defendants from Offering Expert Opinion
Testimony or Similar Evidence Related to Damages (ECF No. 99) is
DENIED.

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Eischen’s Motion to Exclude Details of Defendant Alan Niemann’s March
2021 Accident (ECF No. 100) is DENIED.
IT IS SO ORDERED.
/s/ Sarah D. Morrison
SARAH D. MORRISON, CHIEF JUDGE
UNITED STATES DISTRICT COURT

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