Federal Deposit Insurance Corporation v. Deutsche Bank Securities Inc.

Filing 217

ORDER DENYING Defendant's 189 Sealed Motion to exclude the testimony of Normal Miller. ORDER DENYING Defendant's 191 Sealed Motion to exclude the testimony of Dawn Molitor-Gennrich. Signed by Judge Xavier Rodriguez. (lt)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
AUSTIN DIVISION
FEDERAL DEPOSIT INSURANCE
CORPORATION, as receiver for
GUARANTY BANK,

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Plaintiff,
v.
DEUTSCHE BANK SECURITIES, INC.,
Defendant.

CIVIL NO. 1-14-CV-129-XR

ORDER ON MOTIONS TO EXCLUDE EXPERT TESTIMONY
On this date, the Court considered the remaining motions to exclude expert testimony
pending in this case. A previous order decided the motion of Plaintiff Federal Deposit
Insurance Company (“FDIC”) to exclude John Contino and the motions of Defendant
Deutsche Bank Securities, Inc. (“Deutsche Bank”) to exclude John Finnerty and Stephen
Ryan. Docket no. 216. That order set out the relevant factual and procedural background in
this case, which the Court does not restate here. Now, the Court will decide the remaining
motions concerning Norman Miller (docket no. 189) and Dawn Molitor-Gennrich (docket
no. 191).
This case is related to FDIC v. RBS Securities, Inc., No. 1-14-126-XR. The parties
filed identical motions, responses, and replies in the two cases. The Court’s analysis of these
motions in RBS is thus identical to its analysis of the motions in Deutsche Bank. Accordingly,
the Court adopts the reasoning of the order in RBS on the motions to exclude Miller and
Molitor-Gennrich. See FDIC v. RBS Securities, Inc., No. 1-14-126-XR, ECF No. 223.

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Here, however, the Court must address one additional argument applicable here but
not applicable in RBS. Deutsche Bank argues that, even if Molitor-Gennrich’s testimony is
relevant generally, it is not relevant to one of the certificates underwritten by Deutsche Bank.
Docket no. 191 at 27. Unlike the other certificates, Deutsche Bank claims that this certificate,
the INDX Certificate, does not represent that the underlying appraisals complied with
USPAP. Since Molitor-Gennrich’s testimony concerns compliance with USPAP, Deutsche
Bank thus argues her testimony is not relevant with respect to the INDX Certificate. In
response, the FDIC argues the INDX Certificate’s prospectus supplement stated the
underlying mortgage loans were originated in compliance with underwriting guidelines, and
those guidelines require the appraisals of the properties that secured the mortgage loans to
comply with USPAP. Docket no. 201 at 20. In turn, Deutsche Bank counters that the section
of the supplement the FDIC cites concerns loan origination, not appraisal standards, and
these loan origination guidelines might not even apply to the loans at issue because some of
these loans were originated by originators other than IndyMac. Docket no. 215 at 13.
For the reasons the Court stated in its RBS order, Molitor-Gennrich’s testimony is
relevant. As to the INDX Certificate, Deutsche Bank can argue this issue to the jury. If after
hearing all evidence in this case, Deutsche Bank wishes to move for a directed verdict as to
any alleged misrepresentation of USPAP compliance in the INDC Certificate’s prospectus
supplement, the Court will consider the issue at that time.
CONCLUSION
For the foregoing reasons and those set out in FDIC v. RBS Securities, Inc., No. 114-126-XR, ECF No. 223, Defendant Deutsche Bank’s motion to exclude the testimony of
Norman Miller (docket no. 189) is DENIED.

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Further, Defendant Deutsche Bank’s motion to exclude the testimony of Dawn
Mollitor-Gennrich (docket no. 191) is DENIED.
It is so ORDERED.
SIGNED this 26th day of March, 2019.

XAVIER RODRIGUEZ
UNITED STATES DISTRICT JUDGE

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