Leifker, Jamie et al v. Leifker Grain, LLC et al
Filing
18
ORDER granting 10 Motion to Exclude Defendants' Expert Witnesses by Plaintiffs Catari A. Leifker, Jamie R. Leifker. Signed by District Judge James D. Peterson on 8/25/2016. (arw)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN
JAMIE R. LEIFKER and
CATARI A. LEIFKER,
Plaintiffs,
v.
OPINION & ORDER
LEIFKER GRAIN, LLC,
ROBERT J. LEIFKER, and
RITA M. LEIFKER,
15-cv-37-jdp
Defendants.
This case arises from the breakup of a family business. Plaintiffs Jamie Leifker and
Catari Leifker want their share of the value of the company, Leifker Grain, LLC; defendants
dispute the amount.
Plaintiffs now move to exclude defendants’ expert witnesses, Ron Helle. Dkt. 10.
Helle provided only an informal report by the expert disclosure deadline. Plaintiffs contend
that Helle’s informal report does not comply with Federal Rule of Civil Procedure
26(a)(2)(B). They also contend that Helle’s opinions in that report are unreliable, and
therefore excludable under Federal Rule of Evidence 702. The court will grant the motion.
Although the court would forgive certain informalities, such as Helle’s failure to disclose his
compensation and prior testimony, the informal report is too skeletal to provide a meaningful
analysis of the value of Leifker Grain. Helle’s formal report, which might include a
meaningful analysis, was disclosed only on July 21, 2016, far too late to be fair to plaintiffs.
The failure to timely disclose Helle’s expert opinions was neither justified or harmless,
and thus Rule 37 requires the exclusion of his expert testimony. Plaintiffs also seek to
preclude defendants from “presenting any expert witness testimony at trial.” Dkt. 10
(emphasis added). Because defendants have not suggested that they have disclosed any other
expert, plaintiffs’ motion will be granted in full.
BACKGROUND
The deadline for expert disclosures was set by agreement of the parties. Plaintiffs
disclosed their expert’s report, as agreed, on October 30, 2015. Defendants’ expert disclosure
was due by December 15, 2015. But defendants’ only disclosure before the deadline was an
informal report in the form of a letter from Ron Helle of Honkamp Krueger & Co, P.C.,
purporting to update defendants’ counsel concerning the status of the tax preparation and
accounting for Leifker Grain and affiliated entities, and “to provide . . . a proposal for the
resolution of the matters between the member/partners of the above entities.” Dkt. 12-3. The
informal report did not expressly state Helle’s opinion on the value of Leifker Grain at the
time of plaintiffs’ withdrawal. Instead, it calculated the funds available for distribution as of
some unspecified date. (According to Helle’s deposition testimony, the date was December
12, 2015. Dkt. 9 (Helle Dep. 16:3-15)).
It is undisputed that the informal report lacked certain items required by Rule 26: it
did not disclose (i) all opinions that Helle would provide during the trial, and the reasons for
them; (ii) exhibits that defendants would use in connection with Helle’s opinions; (iii) cases
in which Helle had testified as an expert; and (iv) Helle’s compensation. In the email that
accompanied the informal report, defendants’ counsel explained that plaintiffs should expect
the report to be “amplified at trial.” Dkt. 12-2.
Defendants later provided plaintiffs with two additional expert disclosures. During
Helle’s deposition on June 14, 2016, Helle provided plaintiffs’ counsel with a spreadsheet
2
purporting to explain Helle’s differences with plaintiffs’ expert. And on July 22, 2016,
defendants disclosed Helle’s formal expert report.
Plaintiffs moved to exclude Helle’s testimony on August 12, 2016. Defendants’
response to plaintiffs’ motion was due on August 19, 2016. Although defendants’ response
was filed late, on August 22, 2016, the court will nevertheless consider it.
ANALYSIS
Rule 26(a)(2)(B) requires a party to produce a written expert report when the party’s
expert witness is “one retained or specially employed to provide expert testimony in the
case.” Fed. R. Civ. P. 26(a)(2)(B). Helle is a retained expert witness who must provide a
written report, so Rule 26(a)(2)(B) applies to all of Helle’s reports.
A. Defendants failed to comply with Rule 26
Rule 26(a)(2)(B) lists six items that an expert’s written report must contain:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
a complete statement of all opinions the witness will
express and the basis and reasons for them;
the facts or data considered by the witness in forming
them;
any exhibits that will be used to summarize or support
them;
the witness’s qualifications, including a list of all
publications authored in the previous 10 years;
a list of all other cases in which, during the previous 4
years, the witness testified as an expert at trial or by
deposition; and
a statement of the compensation to be paid for the study
and testimony in the case.
Id. And the parties must make their disclosures on time. Fed. R. Civ. P. 26(a)(2)(D).
Defendants contend, without any real explanation, that “Mr. Helle’s Report and its
Amendments Substantially Comply with the Requirements of Fed. R. Civ. P. 26.” Dkt. 15, at
3
3. Helle’s first informal report and the spreadsheet produced at the deposition do not come
close to substantial compliance with Rule 26. Only Helle’s formal report of July 21, 2016,
complies substantially with the content requirements in Rule 26, but that report was more
than seven months late.
The informal Helle report, the only timely disclosure, must be excluded under Federal
Rule of Evidence 702. The court would not find Helle to be unqualified to render an opinion
based on the net asset value of Leifker Grain, which the parties apparently agree is the proper
approach here. Although Helle is not a business valuation expert, the calculation of net asset
value is essentially an accounting task, and he has expertise in that. But Helle’s informal
report does not calculate the net asset value, so it is not helpful to the court. Implicitly,
defendants acknowledged that the informal report was inadequate, because they told
plaintiffs to expect that Helle’s opinions would be “amplified” at trial. Rule 26 requires full
disclosure of an expert’s opinions, not suggestions to amplify later.
Defendants have not substantially complied with Rule 26; the remaining question is
whether their non-compliance is justified or harmless.
B. Defendants’ failure to comply with Rule 26 was neither justified nor harmless
When a party violates Rule 26(a), “the sanction of exclusion is automatic and
mandatory unless the sanctioned party can show that its violation of Rule 26(a) was either
justified or harmless.” Salgado by Salgado v. Gen. Motors Corp., 150 F.3d 735, 742 (7th Cir.
1998) (citing Finley v. Marathon Oil Co., 75 F.3d 1225, 1230 (7th Cir. 1996)); accord Fed. R.
Civ. P. 37 (“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
4
a motion, at a hearing, or at a trial, unless the failure was substantially justified or is
harmless.”).
Defendants contend that their failure to comply with the rule was justified because
Helle’s opinion was “so fact-intensive” and he lacked the information necessary for his
opinion before the December 15, 2015 deadline. Dkt. 15, at 3. Defendants argue that, as of
December 2015, “the parties were months away from serving and answering interrogatories
and requests for production,” and that plaintiffs were “solely responsible for keeping business
records.” Dkt. 15, at 4. This argument falls flat.
The court allowed the parties to set their discovery schedule, Dkt. 6, at 1, and
defendants freely chose December 15, 2015 as the date by which they would make their
required disclosures, Dkt. 12-1. If defendants lacked the necessary information for Helle’s
expert opinion by December 15, 2015 deadline, then it was incumbent upon defendants to
attempt to resolve this issue with plaintiffs, and if that failed, to promptly raise the issue with
the court. See Dkt. 6, at 3 (“This court also expects the parties to file discovery motions
promptly if self-help fails. Parties who fail to do so may not seek to change the schedule on
the ground that discovery proceeded too slowly to meet the deadlines set in this order.”).
Defendants failed to do so. Instead, defendants raise this issue for the first time now, eight
months after their expert disclosure deadline and only a month before the trial. The court
finds no justification for defendants’ failure to comply with the expert disclosure deadline.
Nor is defendants’ failure to comply with the rule harmless. The purpose of Rule
26(a) is to allow each party a fair opportunity to prepare responses to the opposing party’s
expert opinions; it levels the playing field. See Ciomber v. Coop. Plus, Inc., 527 F.3d 635, 64143 (7th Cir. 2008). Here, the deficiencies in defendants’ expert reports and defendants’ delay
5
in providing those reports have burdened plaintiffs in preparing responses to Helle’s opinions.
Plaintiffs were forced to ferret out Helle’s undisclosed opinions through a deposition. See
Dkt. 9. And even after Helle’s deposition, defendants adduced a further report by him.
Plaintiffs would be substantially harmed by requiring them to spend the last month before
trial preparing a response to an expert report that should have been disclosed eight months
ago. Helle may not testify as an expert for defendants.
ORDER
IT IS ORDERED that plaintiffs Jamie R. Leifker and Catari A. Leifker’s motion to
exclude defendants’ expert witnesses, Dkt. 10, is GRANTED.
Entered August 25, 2016.
BY THE COURT:
/s/
________________________________________
JAMES D. PETERSON
District Judge
6
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?