Gotham Insurance Co. v. Shasta Technologies, LLC

          ORDER FOLLOWING PRETRIAL CONFERENCE; BIFURCATING TRIAL; AND ADDRESSING MOTIONS IN LIMINE [RE: ECF 145, 150]

          BETH LABSON FREEMAN United States District Judge

         The Court held a pretrial conference on July 28, 2016, at which time it addressed a number of trial issues; heard argument on Motion in Limine No. 1 brought by Defendants and Cross-Complainants Instacare Corporation and PharmaTech Solutions, Inc. (collectively (“PharmaTech”); and heard argument on Motion in Limine No. 1 brought by Defendants and Cross-Defendants Shasta Technologies, LLC, Calvin A. Knickerbocker, Jr., and Calvin A. Knickerbocker III (collectively “Shasta”). The Court hereby orders as follows:

         A. Scheduling

         PharmaTech and Shasta each are allotted a total of six hours of trial time, those six hours to include opening statements, examination and cross-examination of witnesses, presentation of evidence, and closing arguments.

         Trial will be bifurcated. During Phase I of the trial, which is set for September 7, 2016, the Court will hear all evidence relevant to the enforceability and effect of the Binding Term Sheet entered into by PharmaTech and Shasta on March 20, 2014. If the Court determines that the Binding Term Sheet is enforceable, that determination may dispose of all issues in the case. Any issues remaining for disposition after Phase I will be addressed in Phase II of the trial, which is set for September 12, 2016.

         The parties shall meet and confer regarding a list of issues that should be addressed in Phase I. If the parties cannot agree on a list of issues, PharmaTech and Shasta each shall submit a three-page brief identifying all issues that should be addressed in Phase I and briefly explaining the relevance of each issue to the enforceability and effect of the Binding Term Sheet. PharmaTech’s brief shall be filed on or before August 12, 2016, and Shasta’s brief shall be filed on or before August 17, 2016. On or before August 29, 2016, the Court will issue an order informing the parties which issues the Court will hear in Phase I.

         B. PharmaTech’s Motion in Limine No. 1 to Exclude the Following Evidence at Trial:

Any argument or other evidence that Plaintiff in Interpleader Gotham Insurance Company breached the subject policy of insurance by reimbursing Defendant Shasta Technologies, LLC’s defense fees at the rate of 50% of defense counsel’s invoices

         PharmaTech moves to exclude Shasta’s presentation of argument or evidence that Gotham Insurance Company (“Gotham”) breached the subject insurance policy by reimbursing Shasta’s defense fees at a rate of 50% of Shasta’s counsel’s invoices. PharmaTech asserts that Shasta released any claims relating to the 50% rate of reimbursement when Shasta entered into a settlement of Gotham’s first interpleader action (“Gotham I”). Shasta denies that it released claims relating to the 50% rate of reimbursement in the Gotham I settlement, and it argues further that the Gotham I settlement effected a release of certain claims that Shasta had against Gotham but not of any claims that Shasta may have against PharmaTech. Consequently, Shasta argues, PharmaTech cannot raise the Gotham I settlement in this case to bar Shasta from challenging the 50% rate of reimbursement. Finally, Shasta argues that PharmaTech’s motion is procedurally improper in that PharmaTech has not identified any particular evidence to be excluded.

         It is the Court’s view that PharmaTech may be correct in arguing that evidence regarding Gotham’s asserted breach of the insurance policy should be excluded. It appears that Shasta may have waived any challenge to the 50% rate of reimbursement when it settled Gotham I, or, alternatively, that Shasta may be precluded from litigating Gotham’s alleged breach because a necessary party to such litigation - Gotham - has been dismissed from the case. However, Gotham’s asserted breach of the insurance policy is irrelevant to the issues to be tried in Phase I. Thus the argument and evidence that PharmaTech seeks to exclude will not be presented unless and until the Court reaches Phase II. Under these circumstances, the Court concludes that it is more prudent to defer ruling of PharmaTech’s motion until completion of Phase I.

         Consideration of PharmaTech’s Motion in Limine No. 1 is DEFERRED.

         C. Shasta’s Motion in Limine No. 1 to Exclude Expert Report and Testimony of Andre Jardini

         Shasta moves to exclude the report and testimony of PharmaTech’s expert witness, Andre Jardini, as irrelevant and unreliable under Federal Rule of Evidence 702. Mr. Jardini, an attorney, offers expert opinion as to the appropriate equitable allocation of the interpled insurance proceeds between PharmaTech and Shasta. PharmaTech contends that Mr. Jardini’s expert report and opinion meet the requirements of Rule 702.

         Rule 702 provides that a qualified expert may testify if “(a) the expert’s scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue; (b) the testimony is based on sufficient facts or data; (c) the testimony is the product of reliable principles and methods; and (d) the expert has reliably applied the principles and methods to the facts of the case.” Fed.R.Evid. 702. The Supreme Court has held that Rule 702 requires the district court to act as a gatekeeper to “ensure that any and ...