United States District Court, N.D. California
LES FIELDS/C.C.H.I. INSURANCE SERVICES, Plaintiff,
STUART M HINES, et al., Defendants. Re: Dkt., 106
ORDER RE: MICHAEL NEALY MIL
MARIA-ELENA JAMES United States Magistrate Judge
the parties and the Court discussed Defendants' concerns
about opinion testimony by Michael Nealy, C.C.H.I Insurance
Services' Chief Financial Officer (“CFO”), at
the March 16, 2017 Case Management Conference, the Court
ordered Defendants to file a motion in limine regarding the
issue no later than May 1, 2017. See CMO at 1, Dkt.
No. 104. Defendant Stuart Hines did so on April 17, 2017.
Mot., Dkt. No. 106. The Motion, which Defendant filed
electronically on the Court's Electronic Case Filing
(“ECF”) system, consists of a memorandum of
points and authorities, a request for judicial notice
(“RJN”), and a declaration. See id.
Defendant also served hard copies of the Motion, Declaration,
and RJN on Plaintiff Les Fields/C.C.H.I. Insurance
Services' counsel. See Proof of Service, Dkt.
No. 106-3. Instead of opposing the Motion on its merits,
Plaintiff incorrectly and inexplicably argued Defendant had
failed to file a Memorandum in support of his Motion and that
the Court should deny the Motion for failure to comply with
Civil Local Rule 7-4. See Opp'n, Dkt. No. 107.
It appears Plaintiff did not open the link attached to the
ECF Notice he received electronically or review the courtesy
copy Defendant mailed to him, either of which would have made
clear to him Defendant had filed the Memorandum, to which he
attached as exhibits the Declaration, RJN, and proof of
service. Defendant's Motion complies with all applicable
rules, including Civil Local Rule 7-4. Plaintiff's
Opposition violates both Federal Rules of Civil Procedure 1
and 11(b), and the Court ORDERS Plaintiff's counsel to
file a declaration no later than May 15, 2017 explaining
whether he reviewed the documents Defendant e-filed and
served and why his Opposition was not made in bad faith.
addition to the lack of substantive opposition, the Court has
reviewed Motion and finds it well taken. Plaintiff seeks to
offer Nealy to testify about funds that were improperly
withdrawn from bank accounts owned by Defendant RISK, which
Plaintiff contends Defendant Stuart misappropriated. Because
Plaintiff did not disclose Nealy as an expert witness,
Plaintiff may not offer expert testimony by him at trial.
See Fed. R. Civ. P. 37(c)(1). Nealy also will be
precluded from offering any opinion testimony and will be
limited to offering testimony that is “rationally based
on [his] perception” (Fed. R. Evid. 701), and thus will
not be allowed to testify about the reports he created to
document the allegedly missing funds. Nealy testified at his
deposition that he did not review the RISK bank accounts
after February 2011 and admitted it “seems odd that the
[CFO] wouldn't look at the account for almost three
years.” Nealy Dep. at 277:3-280:8, Dkt. No. 106-2. He
testified he created the reports after Plaintiff filed this
lawsuit and obtained the RISK bank records by subpoena.
Id. at 151:14-155:20, 280:16-21, 285:3-23. Nealy
thus did not, as part of his job responsibilities, oversee
the RISK account during the period of time the reports
purport to describe, and did not prepare the reports as part
of his regular responsibilities. On the contrary, Defendant
has established Nealy prepared the reports in connection with
this litigation and did not even discover the existence of
the second “secret” RISK account until after the
lawsuit was filed. Id. at 142:3-21, 143:8-148:9,
277:3-280:8. He also admitted in his deposition that some of
the information he included in the report is based on
assumptions-not personal knowledge. Id. at
283:12-284:13 (“I said ‘perhaps'”),
291:18-22 (attributed $25, 000 in his report documenting
missing funds to Defendant even though “no information
[was] available” connecting amount with Defendant).
failed to oppose the Motion, Plaintiff has not established
Nealy has personal knowledge about the two RISK accounts and
the funds flowing through them, or that the reports are based
on a combination of his personal observations and specialized
knowledge obtained through his vocation. But Rule 701
“ensures that a party will not evade the expert witness
disclosure requirements . . . by simply calling an expert
witness in the guise of a lay person.” Fed.R.Evid. 701
Adv. Comm. Note (2000). The Court finds that is precisely
what Plaintiff is attempting to accomplish through
Nealy's testimony about the reports he created from
records subpoenaed after Plaintiff filed suit. Nealy may not
offer lay testimony about funds “missing” from
two accounts about which he has admitted he did not have
“particularized knowledge” “by virtue of
his . . . position in” the business. See id; see
also Pacific Coast Fed. of Fishermen's Ass'n v.
Murillo, 2016 WL 6648731, at 2-3 (E.D. Cal. Sept. 2,
2016) (“[L]ay witnesses employ a process of reasoning
familiar in everyday life, and provide opinions drawn from a
series of personal observations over time. . . .
Additionally, lay witnesses may offer opinions based on a
combination of their personal observations and specialized
knowledge obtained through their vocation.” (internal
quotation marks and citations omitted)); FiTeq INC v.
Venture Corp., 2016 WL 693256, at *3-7 (N.D. Cal. Feb.
22, 2016) (excluding lay opinion about lost profits and
valuation by business owners because they lacked
particularized knowledge and experience to testify about a
product that had never been sold, even though they had
particularized knowledge and general experience with their
business); Gallagher v. Holt, 2012 WL 3205175, at
*13-14 (E.D. Cal. Aug. 3, 2012) (citing cases holding that a
forensic accountant is an expert witness, not a lay witness,
and excluding testimony because defendant failed to disclose
witness as expert).
Motion in Limine to Exclude Lay Opinion Testimony by Michael
Nealy is GRANTED.