SE Property Holdings, LLC v. Center

          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 (6^th 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 (2^nd 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 (2^nd Cir. 2014) (citations and internal marks omitted; emphasis added); see also United States v. Given, 164 F.3d 389, 394 (7^th 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 ...