Powers v. Duff & Phelps, LLC

Filing 67

REPORT AND RECOMMENDATIONS re 49 Motion in Limine filed by Duff & Phelps, LLC, 48 Motion in Limine filed by Pike Powers. Signed by Judge Andrew W. Austin. (dm)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
AUSTIN DIVISION
PIKE POWERS

V.

DUFF & PHELPS, LLC

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A-13-CV-768-DAE

REPORT AND RECOMMENDATION
OF THE UNITED STATES MAGISTRATE JUDGE
TO:

THE HONORABLE DAVID EZRA
UNITED STATES DISTRICT JUDGE
Before the Court are Plaintiff Pike Powers’ Motion in Limine, Dkt. No. 48, and Defendant

Duff & Phelps, LLC’s Motion in Limine, Dkt. No. 49. The undersigned submits this Report and
Recommendation to the United States District Court pursuant to 28 U.S.C. § 636(b) and Rule 1(h) of
Appendix C of the Local Court Rules of the United States District Court for the Western District of
Texas, Local Rules for the Assignment of Duties to United States Magistrate Judges.
On November 24, 2015, the Court held a final pretrial conference and addressed the parties’
pending motions in limine. The Court also ordered the parties to file supplemental briefs regarding
each’s opposition to the other’s motion. The parties filed their briefs on November 30, 2015. Dkt.
Nos. 65, 66. Having reviewed the briefs, the undersigned HEREBY RECOMMENDS that the
Court make the following orders on the motions in limine:
I.

Plaintiff’s Motion in Limine (Dkt. No. 48)
1.

AGREED to by the parties - GRANT.

2.

AGREED to by the parties - GRANT.

3.

WITHDRAWN.

4.

AGREED to by the parties - GRANT as regards testimony related to mitigation of
damages or availability of other work; DENY as to testimony related to Powers’
employment by Fulbright & Jaworski, LLP.

5.

GRANT IN PART and DENY IN PART. The parties agree that generally any
mention of either of them being a party to a prior lawsuit or claim should be
excluded, and as to this portion of the motion, it is recommended that the motion be
GRANTED.
Duff & Phelps, however, objects to the motion to the extent that it would
prevent it from offering evidence related to its affirmative defense. In brief, that
affirmative defense will ask the jury to decide whether an agreement between Powers
and Duff & Phelps covered Powers’ claim for payment. Duff & Phelps stated that
it intends to offer evidence that Powers has previously claimed—including in this
case—that he was entitled to compensation under his employment agreement for the
Duke Energy project and that Duff & Phelps had breached that agreement by not
compensating him for the project. As an example of such evidence, Duff & Phelps
pointed to Powers’ responses to questions it asked him in his deposition regarding
whether he claimed he was entitled to compensation on the Duke Energy project
under his employment agreement. The Court agrees that this evidence is relevant to
the affirmative defense, and should be permitted.
Where precisely to draw the line on this issue, however, is not entirely clear.
Duff & Phelps indicated at the hearing, for example, that it also intended to inform
the jury that the Court had granted summary judgment in its favor on Powers’ breach
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of contract claim. It would seem to the undersigned that this could confuse the jury,
as it could be understood by the jury to mean that the Court had determined that Duff
& Phelps was not obligated to compensate Powers for the Duke Energy engagement
at all, rather than that the Court had only determined that Duff & Phelps was not
obligated to pay Powers under the agreement, without prejudice to Powers’ ability
to seek compensation through a quantum meruit claim. Given the likelihood of such
confusion, the undersigned believes that it would be unduly prejudicial to allow Duff
& Phelps to discuss the summary judgment ruling before the jury. Considering all
of the above, the undersigned recommends that the Court DENY the motion in
limine with regard to any statements or claims by Powers that Duff & Phelps’ failure
to compensate him on the Duke Energy project breached the parties’ written
employment agreement, but otherwise, on the issue of the breach of contract claim,
GRANT the motion and require the parties to first approach the bench and receive
a ruling before discussing in front of the jury the breach of contract claim or the
Court’s ruling on it.
II.

Defendant’s Motion in Limine (Dkt. No. 49)
1.

DENY. This motion targets Duff & Phelps’ internal discussions leading up to its
decision not to compensate Powers related to the Duke Energy project, including
specifically a chain of emails sent on September 6 and 7, 2011, in which executives
of Duff & Phelps discuss whether and how much to compensate Powers. Duff &
Phelps contends that these discussions were part of the decision making process in
settling its dispute with Powers over the Duke Energy engagement. The Court
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disagrees. It does not appear that there was a “claim” for purposes of FED. R. EVID.
408 until after Duff & Phelps decided Powers was not entitled to any compensation
on the Duke Energy project, and these conversations were part of that decision.
2.

AGREED to by the parties - GRANT.

3.

AGREED to by the parties - GRANT.

4.

AGREED to by the parties - GRANT.

5.

WITHDRAWN.

6.

AGREED to by the parties - GRANT.

7.

DENY. Duff & Phelps argues that New York law requires that damages for a
quantum meruit claim for services rendered must be calculated based on an hourly
rate unless a percentage commission is the “clear and accepted marketplace
convention.” Dkt. No. 66 at 3 (citing Carlino v. Kaplan, 139 F. Supp. 2d 563, 565
(S.D.N.Y. 2001) (applying New York law)). In Carlino, the Court held that a
Plaintiff who had submitted “various consulting agreements employed in the adult
entertainment business” had failed to meet this burden, as the agreements did “not
follow any well-established convention, but vary greatly in defining the scope of
services provided by the consultants, the length of time over which the services were
to be delivered, and the amounts of consulting fees and incentive payments that the
adult entertainment clubs agreed to pay.” Id. at 565-566. Ultimately, the Court held
that “there is no standard or convention in the industry” and as such “it would be
improper for a court to write a contract for the parties where none previously was
written.” Id. at 566. The Court thus defaulted to an hourly rate. Id. For the same
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reason, the Court in Learning Annex discarded a jury verdict where an expert had
testified that the industry standard compensation was a 35% commission, but had
“offered no evidence as to (1) the range of percentages for compensating licensing
agents; (2) the variables that would effect whether the compensation would be on the
high or low end of that range.” Learning Annex Holdings, LLC v. Rich Global, LLC
860 F.Supp.2d 237, 248 (S.D.N.Y. 2012)(applying New York law)(emphasis in
original). Put another way, the Court held that testimony regarding the typical
compensation structure for a particular type of deal was insufficient to establish a
clear and accepted marketplace convention absent any testimony regarding the typical
range of commissions. Id.
Duff & Phelps argues that because Powers has not demonstrated his right to
such a payment by any clear and accepted marketplace convention, and has not
designated expert witnesses to demonstrate such a convention, he should be
prevented from presenting evidence or making any argument that he is entitled to a
percentage commission at trial. This argument is premature. Powers has not yet
presented evidence sufficient to establish that a percentage commission is the
industry standard because the case has not yet gone to trial. At the November 24,
2015 hearing, and in his briefing, Powers made clear that he fully intends to present
such evidence. Whether it meets the requirements of New York law is yet to be seen,
but that decision cannot be made at this point. It is clear, however, that testimony
regarding customary practices for compensating business development is relevant to
the quantum meruit claim to be tried, and it would not be prejudicial to Duff &
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Phelps for this evidence to be presented to the jury. There is thus no reason to
exclude this evidence in a motion in limine.
8.

GRANTED, except as discussed above regarding Defendant’s first motion.

9.

GRANTED, except as discussed above regarding Plaintiff’s fifth motion.

10.

AGREED to by the parties, with the understanding that it does not extend to evidence
regarding Powers’ draw account.

Accordingly, the undersigned Magistrate Judge RECOMMENDS that Plaintiff’s Motion
in Limine, Dkt. No. 48, be GRANTED IN PART, DENIED IN PART, AND DISMISSED AS
MOOT, as set forth above, and Defendant’s Motion in Limine, Dkt. No. 49, be GRANTED IN
PART, DENIED IN PART, AND DISMISSED AS MOOT, also as set forth above.
IV. WARNINGS
The parties may file objections to this Report and Recommendation. A party filing
objections must specifically identify those findings or recommendations to which objections are
being made. The District Court need not consider frivolous, conclusive, or general objections. See
Battle v. United States Parole Comm’n, 834 F.2d 419, 421 (5th Cir. 1987).
A party's failure to file written objections to the proposed findings and recommendations
contained in this Report within fourteen (14) days after the party is served with a copy of the Report
shall bar that party from de novo review by the District Court of the proposed findings and
recommendations in the Report and, except upon grounds of plain error, shall bar the party from
appellate review of unobjected-to proposed factual findings and legal conclusions accepted by the
District Court. See 28 U.S.C. § 636(b)(1)(c); Thomas v. Arn, 474 U.S. 140, 150-53, 106 S. Ct. 466,

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472-74 (1985); Douglass v. United Servs. Auto. Ass’n, 79 F.3d 1415, 1428-29 (5th Cir. 1996) (en
banc).
To the extent that a party has not been served by the Clerk with this Report &
Recommendation electronically pursuant to the CM/ECF procedures of this District, the Clerk is
directed to mail such party a copy of this Report and Recommendation by certified mail, return
receipt requested.
SIGNED this 3 day of December, 2015.

_____________________________________
ANDREW W. AUSTIN
UNITED STATES MAGISTRATE JUDGE

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