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Leeds LP v. United States

October 5, 2010


The opinion of the court was delivered by: Honorable Barry Ted Moskowitz United States District Judge


Defendant has filed motions in limine to exclude (1) testimony from Plaintiff's expert witness, George M. Turner and (2) the errata sheet of the deposition of Laura Ballantyne. [Docs. 88, 89] For the following reasons, the Court DENIES both motions.


Defendant seeks to exclude testimony from Plaintiff's expert witness, George M. Turner, under Federal Rule of Evidence ("FRE") 702. Plaintiff has retained Mr. Turner "to provide expert witness testimony on the formation, structure, and use of trusts and limited partnerships in business and family settings." (Turner Rep. at 2)

In his expert report, Mr. Turner states that generally, use of limited partnerships and trusts "represent[] good business practice" and "are also legitimate and appropriate tools for estate planning purposes." (Id. at 6) He also opines that the documents used to create the limited partnerships, trusts, and corporations at issue in this case "were well drafted and in accordance with the expectancy of the states that were involved" and that "[t]here is nothing on the face of the drafting of these documents that anything was inappropriate or illegal." (Id. at 7) Mr. Turner's opinions were limited to the structure of these documents; he did not review the financial documentation involved in the relevant transactions or how the entities were operated after formation. (see id. at n. 1; Turner Dep. at 37-39)

Defendant offers three grounds for exclusion of Mr. Turner's opinions pursuant to FRE 702: (1) they embody impermissible legal conclusions; (2) they are not based on a reliable methodology; and (3) they are unhelpful to the trier of fact. Because, as set forth below, the Court holds that Mr. Turner's testimony should not be excluded under this rule, it need not address Plaintiff's response that Defendant's motion in limine is untimely.

1. Mr. Turner's Opinions Do Not Constitute Inadmissible Legal Conclusions

Expert testimony offering legal conclusions is impermissible when it concerns an ultimate issue which will be decided by the fact-finder. See United States v. Moran, 493 F.3d 1002, 1008 (9th Cir. 2007); Hangarter v. Provident Life and Accident Ins. Co., 373 F.3d 998, 1016 (9th Cir. 2004). This is because "[w]hen an expert undertakes to tell the jury what result to reach, this does not aid the jury in making a decision, but rather attempts to substitute the expert's judgment for the jury's." United States v. Duncan, 42 F.3d 97, 101 (2d Cir. 1994) (cited by Mukhtar v. Cal. State Univ., 299 F.3d 1053, 1066 n. 10 (9th Cir. 2002)) (emphasis in original). However, an expert may offer a legal opinion about an issue that is ancillary to the ultimate issue in the case. See Hangarter, 373 F.3d at 1016-1017; Reiner v. Warren Resort Hotels, Inc., No. CV 06-173-M-DWM, 2008 U.S. Dist. LEXIS 102047, at *32-33 (D. Mont. Oct. 1, 2008) (denying a motion in limine to exclude expert testimony that pool area design failed to comply with state law in a slip and fall case).

Here, Mr. Turner's testimony concerning legal sufficiency of documents does not improperly tell the fact-finder what result to reach.*fn1 Mr. Turner does not offer an opinion about whether Plaintiff is a nominee of the taxpayers--the ultimate matter at issue. Even if--as Mr. Turner asserts--the limited partnerships and trusts were properly formed, "'the [Court] would still have. . . to draw its own inference from that predicate testimony to answer the ultimate factual question'" of whether Plaintiff is a nominee of the taxpayers. Moran, 493 F.3d at 1008 (quoting United States v. Morales, 108 F.3d 1031, 1037 (9th Cir. 1997)).*fn2 Accordingly, Mr. Turner's testimony is not inadmissible as a legal conclusion.

2. Mr. Turner's Opinions Shall Not Be Excluded On Grounds Of Reliability

Rule 702 allows admission of "scientific, technical, or other specialized knowledge" by a qualified expert if it will "assist the trier of fact to understand the evidence or to determine a fact in issue." Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). A trial judge's "gatekeeping role" of ensuring that expert testimony rests on a reliable foundation and is relevant applies to all forms of expert testimony, not just scientific testimony. Kumho Tire Co. v. Carmichael, 526 U.S. 137, 141 (1999); White v. Ford Motor Co., 312 F.3d 998, 1007 (9th Cir. 2002). The FRE 702 inquiry under Daubert, "is a flexible one," Kumho Tire, 526 U.S. at 141; trial judges are entitled to broad discretion in determining both whether an expert's non-scientific testimony is reliable and how to measure reliability. Hangarter, 373 F.3d at 1017.

Defendant asserts that Mr. Turner's testimony should be excluded because it does not rest on proper methodology or analysis. (Def. Mot. at 2) However, as set forth in his report, Mr. Turner has been a licensed California attorney since 1968 during which time he specialized in family estate planning, published seven books pertaining to trust administration and fiduciary responsibilities, and is a regular lecturer on estate planning. An expert's knowledge and experience may support a finding of reliability. See Hangarter, 373 F.3d at 1017. Accordingly, the Court agrees with Plaintiff that "[t]his experience qualifies Mr. Turner to offer opinions on common and good business practices in the formation of trusts and estate planning."

3. Mr. Turner's Opinions Are Potentially Helpful To The Fact-Finder

Expert testimony must be relevant to a fact in issue, and thus helpful to the fact-finder, to be admissible under FRE 702. Daubert, 509 U.S. at 591. Defendant, seizing on the fact that Mr. Turner did not offer an opinion about the use of financial documents or the operation of the entities forming Plaintiff, argues that Mr. Turner's opinion about the legal sufficiency of documents creating limited partnerships ...

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