Hopkins AG Supply LLC v. First Mountain Bancorp
ORDER granting in part and denying in part 219 Defendants', Larry Wright, Phenix Services and Brunswick Companies, Motion in Limine; granting 220 Defendants' Second Motion in Limine; granting in part and denying in part 223 Plaintif fs Motion in Limine Regarding Non-Party Jarrod Stewarts Irrelevant Activities and Communications; granting 224 Plaintiffs Motion in Limine Regarding Criminal Restitution Payments; granting in part and denying in part 225 Plaintiffs Motion in Li mine Regarding Evidence of Settlement with Former Defendants; granting 230 Defendants' Third Motion in Limine; granting 244 Defendants' Fourth Motion in Limine; denying 247 Defendants' Motion in Limine Regarding Evidence of Bank Loans. Signed by Honorable Robin J. Cauthron on 7/11/17. (lg)
IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF OKLAHOMA
HOPKINS AG SUPPLY LLC,
FIRST MOUNTAIN BANCORP, a
Nevada Corporation, et al.,
Case No. CIV-12-1141-C
MEMORANDUM OPINION AND ORDER
Now before the Court are the following motions in limine: Plaintiff’s Motion in
Limine Regarding Non-Party Jarrod Stewart’s Irrelevant Activities and Communications
(Dkt. No. 223); Plaintiff’s Motion in Limine Regarding Criminal Restitution Payments
(Dkt. No. 224); Plaintiff’s Motion in Limine Regarding Evidence of Settlement with
Former Defendants (Dkt. No. 225); Defendants’, Larry Wright, Phenix Services and
Brunswick Companies, Motion in Limine (Dkt. No. 219); Defendants’ . . . Second Motion
in Limine (Dkt. No. 220); Defendants’ . . . Third Motion in Limine (Dkt. No. 230);
Defendants’ . . . Fourth Motion in Limine (Dkt. No. 244); and Defendants’ . . . Motion in
Limine Regarding Evidence of Bank Loans (Dkt. No. 247). The parties have responded
and each Motion is now at issue.
I. Plaintiff’s Motion Regarding Jarrod Stewart’s Activities and Communications
Plaintiff requests the exclusion of any evidence related to Jarrod Stewart’s insurance
business or operations as an insurance agent and any mention of an email sent from Mr.
Stewart to Turhan and Sapho Erel on January 2, 2013.
Stewart is the owner and
designated corporate representative of Hopkins and he also owns a separate insurance
business called AIM Agency. Turhan Erel owns Turhan’s Bay Export & Import Co., a
former defendant entity in this case, and Sapho Erel is his spouse.
Plaintiff argues evidence of Stewart’s insurance business is irrelevant, prejudicial,
and misleading to the jury. Plaintiff argues because Stewart is a non-party, his testimony
should be limited to his actions as an agent of Hopkins and the fact that Stewart possesses
insurance knowledge should not be used to imply that Hopkins had superior knowledge
and is not relevant to whether Defendants conspired to defraud Hopkins. Defendants
argue Stewart’s testimony will be useful to show the actions of Brunswick and Phenix were
consistent with lawful purposes.
Stewart’s experience is relevant in relation to his general knowledge of the
insurance industry and the context of the transaction in question. Accordingly, the Motion
is DENIED on this issue. However, to the extent that counsel seeks to elicit expert
testimony from Stewart, or if the testimony becomes too time-consuming or prejudicial, it
will be stopped.
Plaintiff argues for the exclusion of an email entitled “Turhan Situation” because it
is not relevant to the claims and is more prejudicial than probative. Defendants argue the
email will be used as impeachment evidence to show bias, prejudice, interest, and motive.
The Court finds the email is totally irrelevant and the Motion is GRANTED on this issue.
The Court will reconsider this decision if the circumstances indicate the document may be
II. Plaintiff’s Motion Regarding Criminal Restitution Payments
Plaintiff requests the exclusion of evidence related to restitution payments Erel has
paid or was ordered to pay Plaintiff in relation to a criminal prosecution. Plaintiff argues
the fact that Erel was ordered to pay restitution for a fraudulent check has no bearing on
the issue of whether Defendants conspired to commit fraud on Plaintiff. Mention of the
restitution would lead the jury to believe Plaintiff has been compensated for its loss.
Additionally, Plaintiff states Erel filed for bankruptcy and is behind on payments, so any
mention of the debt to the jury would lead to a mini trial on Erel’s ability to pay.
Defendants argue because the liability under the guarantee is conditioned upon
payment, all payments received are relevant and admissible, including restitution
payments. Defendants also state the evidence should be admissible as impeachment
evidence to show Erel has a financial interest in the outcome of this case.
The Court finds the initial $25,000 payment is admissible but the criminal restitution
payments are inadmissible because they are materially different from the voluntary
payment received under the guarantee.
The parties are free to discuss the fact that
Erel/Turhan’s Bay failed to pay the balance and make arguments as to whether that tends
to show Plaintiff’s loss was due to Erel’s actions and not a conspiracy. The issues of setoff
and duplicative recovery will be addressed after the jury renders its verdict. While Erel
may have a financial interest in this case, the interest is unknown until the jury renders its
verdict, and the probative value of such evidence is far outweighed by unfair prejudice,
confusion to the jury, and undue delay. The Court finds the Motion is GRANTED on this
issue; evidence of Erel’s criminal restitution payments and duplicative recovery is
III. Plaintiff’s Motion Regarding Evidence of Settlement with Former Defendants
Plaintiff requests the exclusion of all evidence related to claims brought against or
settlements with former Defendants Advance Trading, Inc., and Troy Rigel. Plaintiff
brought a negligence claim against Advance Trading and Rigel, which they subsequently
settled. Plaintiff argues this evidence is inadmissible pursuant to Fed. R. Evid. 408 and
the duplicative recovery issue should be addressed after trial is complete.
Defendants argue evidence of Advance Trading/Rigel’s negligence is admissible to
show it was the proximate cause of Plaintiff’s harm rather than Defendants’ actions, and
the Court agrees. Defendants will be permitted to argue alternate theories of harm.
Additionally, a complete bar of all discussion of Advance Trading and Rigel would confuse
the jury by not providing complete information about the transaction in question.
However, Defendants may not discuss the settlement, settlement offer, the amount of
settlement, or make any setoff or double recovery arguments to the jury. Arguments
related to recovery will be addressed after the jury reaches its verdict. Defendants may
discuss the actions of Advance Trading and Rigel and the fact that Plaintiff brought a
negligence claim against them, and explain Advance Trading and Rigel are not parties to
this case. Accordingly, Plaintiff’s Motion is GRANTED in part and DENIED in part.
IV. Defendants’ First Motion Regarding Wright’s Past Criminal and Civil Litigation
Defendants request the exclusion of evidence related to several enumerated cases to
which Defendant Larry Wright or one of his businesses was a party and all other litigation
or disputes involving The Underwriter’s Group, Wright, Phenix Services, or Brunswick
Companies. Defendants argue the introduction of this evidence, particularly a criminal
case more than ten years old, would amount to impermissible character evidence.
Defendants state the civil cases are not relevant to the issues in this case and are highly
Plaintiff argues the federal convictions for conspiracy and making false statements
to the United States must be admitted under Fed. R. Evid. 609 because even though the
conviction was more than ten years ago, the probative value substantially outweighs its
prejudicial effects because crimes involving false statements are highly probative to a
witness’s creditability. Here, Wright has had a fair opportunity to contest the evidence’s
use and the information is more probative than prejudicial as it tends to show intent, plan,
or motive. The Motion is DENIED on this issue.
Plaintiff argues the named civil suits are admissible under Fed. R. Evid. 404(b) to
show other instances where Defendants engaged in actions similar to those in this case and
were accused of fraud, dishonesty, conspiracy, and the wrongful acquisition of large sums
of money. Plaintiff alleges these previous suits show intent to conspire, motive, methods
for implementing the fraudulent scheme, and knowledge amongst the co-conspirators to
carry out the scheme. Plaintiff responds to four of Defendants’ remaining requests, so the
three unaddressed requests are GRANTED and will be excluded:
Alliance v. The Underwriters Grp., Inc., et al., Case No. 2010-CA-011165; Ford, Miller &
Wainer, P.A. v. Phenix Services, Inc., et al., Case No. 2011-CA-000369; and the arrest and
booking report involving Wright dated October 5, 2011, in Duval County, Florida.
The Court has reviewed each of the remaining cases and finds the following case
will be excluded because the facts are not similar enough to this case to be more probative
than prejudicial: Rampart Capitol Mgmt. LLC, et al. v. The Underwriters Group, Inc., et
al., Case No. 2010-CA-009429 (allegations of fraud related to public construction contracts
and reason for nonpayment is mass default by contractors in the market). Accordingly,
the Motion is GRANTED as to this case.
In contrast, the remaining cases are similar enough to the facts of this case to be
admitted under Fed. R. Evid. 404(b)(2) to show motive, intent, preparation, knowledge, or
plan. Evidence regarding the following cases will be admitted: First Nat’l Bank of
Davis, Okla., et al. v. Underwriter Reinsurance Co. Ltd., et al., Case No. CJ-2004-1771
(alleged failure to make payment on bond and assertions of material misrepresentations of
fact); Fountains at Canterbury, et al. v. CSR-Nationwide-Inc., et al., Case No. CJ-2012212 (alleging Phenix and Underwriters were the underwriters on a performance bond for a
roofing contract that Gowen and First Mountain Bancorp failed to uphold); Poindexter, et
al. v. Stuteville, et al., Case No. CJ-2012-52 (alleging fraud, constructive fraud, and
conspiracy for performance bond issued by Underwriters on a city storm water project).
Therefore, the Motion is DENIED as to these cases. The parties may propose a limiting
instruction regarding the admitted criminal and civil cases as soon as is practicable.
Additionally, Defendants’ categorical request to exclude all other litigation or
disputes involving The Underwriter’s Group, Wright, Phenix Services, or Brunswick
Companies is overly broad and is DENIED on this issue.
V. Defendants’ Second Motion Regarding Gowen’s Deposition Testimony
Defendants request the exclusion of George Gowen’s deposition testimony because
it was taken before Defendants were named in the Second Amended Complaint, received
notice, or counsel had entered an appearance on their behalf. As discussed at docket call,
the parties acknowledge Gowen’s deposition took place before Defendants were party to
the case and he is not expected to testify at trial. Thus, Defendants were not present for
the deposition in question and had no opportunity to cross-examine Gowen. Fed. R. Civ.
P. 32(a) allows the use of deposition testimony at trial if “the party was present or
represented at the taking of the deposition or has reasonable notice of it.” Id. Plaintiff’s
argument that Defendants could have deposed Gowen at a later date is unpersuasive.
Accordingly, Defendants’ Motion is GRANTED.
VI. Defendants’ Third Motion Regarding Indemnification Agreement
Plaintiff’s counsel represented to the Court at docket call that Plaintiff does not
intend to introduce evidence covered by this Motion, and thus Plaintiff did not file a
response. Accordingly, the Court deems the Motion conceded and it is GRANTED.
VII. Defendants’ Fourth Motion Regarding Erel’s Testimony
Defendants request the exclusion of certain topics Turhan Erel may discuss while
conceding Erel is entitled to address other relevant topics. Generally, testimony regarding
personal hardships such as criminal convictions, jail time, hospitalization, and emotional
trauma will be excluded. The Motion is GRANTED at this time. The parties are free to
make objections at trial and may request to approach the bench with further arguments as
VIII. Defendants’ Fifth Motion Regarding Evidence of Bank Loans
Defendants request the exclusion of evidence of bank loans as damages because
they were not previously disclosed and are not permitted under the “benefit of the bargain”
measure of damages because the maximum value Plaintiff would have received pursuant
to the guarantee is $300,000. The Amended Final Pretrial Report states Plaintiff claims
damages for the unpaid bond and other damages as a result of the conspiracy, including
money borrowed to cover the bond loss.
Plaintiff argues the guarantee, or the bargain, states guarantors shall indemnify
Plaintiff “against all losses and liabilities” and its damages include a loan Plaintiff obtained
to cover its loss when the guarantor failed to indemnify. In Bowman v. Presley, 2009 OK
48, ¶ 14-15, 212 P.3d 1210, 1218, the parties contested the method of home valuation for
damages purposes. The Oklahoma Supreme Court held there was “[n]o single, clear, and
undisputed answer” to the question of damages and thus the trier of fact must make the
determination. Id. The Court finds Plaintiff should be permitted to introduce evidence
of damages and the jury will determine whether such damages are proximately related to
Defendants’ alleged actions. Accordingly, the Motion is DENIED.
For the reasons stated, Plaintiff’s Motion in Limine Regarding Non-Party Jarrod
Stewart’s Irrelevant Activities and Communications (Dkt. No. 223) is GRANTED in part
and DENIED in part; Plaintiff’s Motion in Limine Regarding Criminal Restitution
Payments (Dkt. No. 224) is GRANTED; Plaintiff’s Motion in Limine Regarding Evidence
of Settlement with Former Defendants (Dkt. No. 225) is GRANTED in part and DENIED
in part; Defendants’, Larry Wright, Phenix Services and Brunswick Companies, Motion in
Limine (Dkt. No. 219) is GRANTED in part and DENIED in part; Defendants’ . . . Second
Motion in Limine (Dkt. No. 220) is GRANTED; Defendants’ . . . Third Motion in Limine
(Dkt. No. 230) is GRANTED; Defendants’ . . . Fourth Motion in Limine (Dkt. No. 244) is
GRANTED; and Defendants’ . . . Motion in Limine Regarding Evidence of Bank Loans
(Dkt. No. 247) is DENIED.
IT IS SO ORDERED this 11th day of July, 2017.
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