United States District Court, S.D. Alabama, Southern Division
ORDER
WILLIAM H. STEELE, UNITED STATES DISTRICT JUDGE
This
matter comes before the Court on Defendants' Motion in
Limine to Exclude Plaintiff's Business Records from
Edward Jones and Merrill Lynch (doc. 137), Defendants'
Motion in Limine to Exclude Certain Expert Witnesses and
Reports (doc. 138), and Plaintiff's Omnibus Motion in
Limine to Exclude Certain Witnesses from Testifying at Trial
(doc. 139). All of these motions have been briefed and are
ripe for disposition.
I.
Defendants' Motion to Exclude Business Records.
Among
the exhibits designated by plaintiff, SE Property Holdings,
LLC (“SEPH”), in the Joint Pretrial Document
(doc. 129) are certain financial account statements for
defendants' accounts held with third-party investment
brokers Edward Jones and Merrill Lynch. SEPH obtained these
records from Edward Jones and Merrill Lynch directly via
subpoenas, rather than from defendants via requests for
production of documents. Along with the responsive documents,
the third parties furnished SEPH with certain certifications.
The certification forms utilized by Edward Jones and Merrill
Lynch were apparently their own preprinted forms, as opposed
to certification forms provided by plaintiff. SEPH intends to
utilize those certificates to lay an evidentiary foundation
to support introduction of these Edward Jones and Merrill
Lynch account statements into evidence at trial pursuant to
the business records exception to the hearsay rule. In their
Motion in Limine, defendants identify purported defects in
the certification forms that they contend forbid SEPH from
being able to utilize the business records exception.
A.
The Edward Jones Business Records.
With
regard to the Edward Jones custodian affidavits, defendants
point to language stating, “I am the designee of Edward
Jones' Custodian of Records.” (Doc. 137, Exh. A.)
Defendants reason that a “designee” of a
custodian of records is not the same as a “custodian of
records, ” which they contend is a significant
distinction for admissibility purposes. To qualify for the
business record exception to the hearsay rule, a record must
be: (i) “made at or near the time [of an act, event,
condition, opinion, or diagnosis] by - or from information
transmitted by - someone with knowledge;” (ii)
“kept in the course of a regularly conducted activity
of a business;” and (iii) made as “a regular
practice of that activity.” Rule 803(6)(A)-(C),
Fed.R.Evid. Critically, the Federal Rules of Evidence require
that these three conditions be “shown by the testimony
of the custodian or other qualified witness, or by a
certification that complies with Rule 902(11) or (12) or with
a statute permitting certification.” Rule 803(6)(D),
Fed.R.Evid. A Rule 902(11) certification is “a
certification of the custodian or another qualified
person that complies with a federal statute or a rule
prescribed by the Supreme Court.” Rule 902(11)
(emphasis added). Defendants' position is that the
language in the Edward Jones certifications identifying the
affiant as “the designee of Edward Jones' Custodian
of Records” means that the affiant has not been shown
to be a “custodian or another qualified person”
for purposes of Rule 902(11), and that the Edward Jones
certifications therefore do not lay a proper foundation for
admissibility of the Edward Jones account statements pursuant
to the business record exception.
This
objection is not well-taken. The affiant who signed the
Edward Jones certifications, Sevmek Fulton, is identified in
the certification forms with the title “Edward Jones -
Security Processing Department.” The certification
forms reflect that Fulton is “personally acquainted
with the facts herein stated, ” including that the
subject records were kept by Edward Jones in the regular
course of business, that it was in the regular course of
Edward Jones' business for an employee with knowledge to
make the record or transmit information for inclusion in the
record, and that the record was made at or near the time of
the event. (Doc. 137, Exh. A.)[1] Taken in the aggregate, such
facts provide adequate indicia that the affiant is a
“qualified person” for purposes of Rule 902(11).
See generally United States v. Collins, 799 F.3d
554, 584 (6th Cir. 2015) (“the meaning of
‘[another] qualified witness should be given the
broadest interpretation, '” and “[t]he only
requirement is that the witness be familiar with the record
keeping system”) (citations omitted); United States
v. Lauersen, 348 F.3d 329, 342 (2nd Cir.
2003) (observing that the term “custodian or another
qualified person” in Rule 902(11) is “given a
very broad interpretation” and that “[t]he
witness need only have enough familiarity with the
record-keeping system of the business in question to explain
how the record came into existence in the ordinary course of
business”). Defendants' Motion in Limine is denied
as to the Edward Jones account statements.
B.
The Merrill Lynch Business Records.
With
regard to the Merrill Lynch custodian affidavits, defendants
focus on affiant's statement that “[s]aid records
are kept in the regular course and scope of business of
Merrill Lynch.” (Doc. 137, Exh. B, ¶ 4.)
Defendants' objection is that these certifications
“fail to state that the records were made in the course
of a regularly conducted business activity, or that the
regular practice of Merrill Lynch was to have made such a
record.” (Doc. 137, at 6.) Defendants thus maintain
that the Merrill Lynch certifications do not comport with the
requirement of Rule 803(6)(B) that they show “the
record was kept in the course of a regularly conducted
activity of a business, ” nor the requirement of Rule
803(6)(C) that they show that “making the record was a
regular practice of that activity.”
Defendants'
objection predicated on Rule 803(6)(B) is not persuasive, as
the Merrill Lynch certifications' statement that the
subject records “are kept in the regular course and
scope of business” is sufficiently similar to Rule
803(6)(B)'s requirement that the certification show that
the records are “kept in the course of a regularly
conducted activity of a business.” Id.
However, the Rule 803(6)(C) objection stands on a different
footing. The rule is plain that “[t]o lay a proper
foundation for a business record, a custodian or other
qualified witness must [certify] that the document was kept
in the course of a regularly conducted business activity
and also that it was the regular practice of that
business activity to make the record.” United
States v. Komasa, 767 F.3d 151, 156
(2nd Cir. 2014) (citations and internal marks
omitted; emphasis added); see also United States v.
Given, 164 F.3d 389, 394 (7th Cir. 1999)
(foundational requirements for business records require
showing that “it was the regular practice of that
business to make such records”). The rule requires
certification that “making the record was a regular
practice of” the regularly conducted activity of a
business. Rule 803(6)(C), Fed.R.Evid. The Merrill Lynch
certifications say nothing about whether the making of the
subject records was in the regular course and scope of its
business. They are entirely silent on this point.
In its
brief, SEPH describes other indicia of reliability that these
“standard, run-of-the-mill account statements”
have. (Doc. 145, at 6.) SEPH points out that these are
defendants' own account statements, and therefore readily
accessible to them as account holders if they doubt their
veracity. (Id.) SEPH also states that defendant Amy
Brown's husband is employed by Merrill Lynch and works
with the defendant LLCs' accounts, and that
defendants' own accountant deems these account statements
reliable. (Id. at 7.) All of that may well be true.
The trouble for SEPH is that Rule 803(6) is not flexible in
its foundational requirements. It does not provide
alternative means of qualifying for the business exception if
the custodian certification has a technical
defect.[2] To the contrary, Rule 803(6) delineates a
very specific set of requirements for a hearsay exhibit to be
admissible as a business record. No matter how one slices it,
the Merrill Lynch certifications do not satisfy one of those
requirements. They do not aver that making the records was a
regular practice of a regularly conducted Merrill Lynch
activity. That concept is simply not embodied anywhere in the
Merrill Lynch certifications; therefore, they do not pass
muster under Rule 803(6)(D).[3] Insofar as SEPH would seek to
introduce those account statements as business records
pursuant to Rule 803(6), then, it has not laid an adequate
foundation. Defendants' Motion in Limine will be granted
on this point.[4]
II.
Plaintiff's Motion to Exclude Witnesses.
SEPH's
“Omnibus Motion in Limine” seeks to exclude
defense witnesses Martin Sandel, Darrell Melton, Jim Pope,
and Thomas Bealle from testifying at trial. In the Joint
Pretrial Document filed on January 6, 2017, defendants listed
all four of these individuals among their witnesses. (Doc.
129, at 8.)
A.
Martin Sandel.
Beginning
with Martin Sandel, plaintiff articulates several objections;
however, the Court need look no further than plaintiff's
assertion that “Sandel was never disclosed by
Defendants as someone with knowledge regarding this case or
someone they may call at the trial of this case until witness
lists were exchanged for trial.” (Doc. 139, at 2.)
In the
Rule 16(b) Scheduling Order, Magistrate Judge Cassady
directed the parties that “[t]he initial disclosures
required by Fed.R.Civ.P. 26(a)(1) shall be exchanged not
later than November 2, 2015.” (Doc. 35, ¶ 4.)
Among the information encompassed by that directive was
disclosure of “the name and, if known, the address and
telephone number of each individual likely to have
discoverable information - along with the subjects of that
information - that the disclosing party may use to support
its claims or defenses, unless the use would be solely for
impeachment.” Rule 26(a)(1)(A)(i), Fed.R.Civ.P. The
Scheduling Order further provided that
“[s]upplementation of disclosures and responses as
required by Rule 26(e) is to be accomplished ‘at
appropriate intervals' and ‘seasonably, ' but
not later than September 1, 2016.” (Doc. 35, ¶ 7.)
This supplementation deadline was later extended to
“not later than October 14, 2016.” (Doc. 63, at
2.) Of course, Rule 26(e) requires supplementation of Rule
26(a) disclosures “in a timely manner if the party
learns that in some material respect the disclosure …
is incomplete … and if the additional or corrective
information has not otherwise been made known to the other
parties during the discovery process or in writing.”
Rule 26(e)(1)(A), Fed.R.Civ.P.
Notwithstanding
these requirements, it is undisputed that defendants did not
disclose Sandel as someone with knowledge regarding the case
or someone they may call at trial until trial witness lists
were exchanged.[5] In response to plaintiff's Motion in
Limine, defendants do not suggest that they actually complied
with Rule 26(a)(1)(A)(i), Rule 26(e), or the Scheduling
Order's initial disclosure and supplementation deadlines
with respect to witness Sandel. Simply put, defendants failed
timely to disclose him. That omission implicates Rule
37(c)(1), which provides that “[i]f 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 … at a
trial, unless the failure was substantially justified or is
harmless.” Rule 37(c)(1), Fed.R.Civ.P. Defendants have
made no argument and no showing that their failure to
identify ...