Glenwood Sys, LLC v. Thirugnanam et al
Filing
232
MINUTES OF Motion Hearing held before Judge Christina A. Snyder RE Defendants' and Plaintiffs' Motions in Limine: Defendants' second 162 , eighth 182 , ninth 185 , and eleventh motions in limine 190 are GRANTED. Defendants' f ourth 193 , fifth 173 , sixth 176 , seventh 179 , and tenth motions in limine 187 are DENIED. Defendants' third motion in limine 165 is GRANTED in part and DENIED in part. The Court reserves judgment on defendants' first motion in l imine 159 . Plaintiff's fifth motion in limine 170 is GRANTED. Plaintiff's third 168 , fourth 169 , and sixth motions in limine 228 are DENIED. Plaintiff's first 166 and second motions in limine 167 are GRANTED in part and DENIED in part. Court Reporter: Anne Kielwasser. (gk)
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.
CV 10-8910 CAS (AJWx)
Title
GLENWOOD SYSTEMS, LLC v. VENKATESAN THIRUGNANAM,
ET AL.
Present: The Honorable
Date
May 21, 2012
CHRISTINA A. SNYDER
Catherine Jeang
Deputy Clerk
Anne Kielwasser
Court Reporter / Recorder
N/A
Tape No.
Attorneys Present for Plaintiffs:
Attorneys Present for Defendants:
N. Kane Bennett
Edward Vaisbort
Michael Fischer
Brook Changala
Proceedings:
I.
DEFENDANTS’ AND PLAINTIFF’S MOTIONS IN LIMINE
(filed 4/23/2012)
INTRODUCTION
Plaintiff Glenwood Systems, LLC, a national medical billing company based in
Connecticut, brought the instant action against Venkatesan Thirugnanam and Senthil
Sundaresan, two software engineers, over their formation of defendant Augment U.S., a
business which Glenwood claims competed unfairly against it.1 The background and
facts are known to the parties and set forth in the Court’s order dated May 15, 2012. Dkt.
No. 225.
On April 23, 2012, defendants filed eleven motions in limine, and plaintiff filed
five motions in limine. Plaintiff filed an ex parte application for leave to file a sixth
motion in limine, which the Court granted by order dated May 16, 2012. The parties filed
their respective oppositions on April 30, 2012. After considering the arguments set forth
by both parties, the Court finds and concludes as follows.
1
At certain points in the briefing, Sundaresan’s name is spelled “Sunderesan.” The
Court will use the former spelling for purposes of uniformity.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.
CV 10-8910 CAS (AJWx)
Title
GLENWOOD SYSTEMS, LLC v. VENKATESAN THIRUGNANAM,
ET AL.
II.
Date
May 21, 2012
DEFENDANTS’ MOTIONS IN LIMINE
A.
Motion to Exclude Reference to, or Evidence of, Alleged Noncompete
Agreement
Thirugnanam’s alleged employment contract contains a noncompete clause that
states, in part, the following:
The Employee covenants and agrees that he shall not, directly or indirectly, for his
own account or as agent, officer, director, consultant, servant or employee, or as
shareholder of any company or member of any firm, engage or attempt to engage
in the production, development, sale, distribution, solicitation or promotion of the
sale or distribution of the Products or Services (as hereinafter defined) or solicit or
call on any Client or Prospective Client (in each case as hereinafter defined) with
respect to the Products or Services for a period of one (1) year following the
termination of the Employee’s employment hereunder (hereinafter referred to as
“the Restriction Period”), whether such termination is voluntary or involuntary,
within a 100 mile radius of Waterbury, CT and within any state of the United
States in which the Company has sold its Products or Services during the one (1)
year period immediately preceding the termination of the Employee’s employment
hereunder (“the Restricted Area”). The Employee recognizes that the business of
the Company is national in scope and that such Restricted Area is in all respects
appropriate under the circumstances.
FAC, Exh. A, at 21.
Defendants seek to exclude all reference to, or evidence of, the noncompete clause
because covenants not to compete are unenforceable under California law. MIL 1, at 3.
Thus, defendants assert that its introduction would only waste time and serve to confuse
the jury. Id.
In opposition, plaintiff asserts that the Court should apply Florida law to the
alleged employment contract because “nearly all” of Thirugnanam’s work for plaintiff
was completed in Florida. Opp’n to MIL 1, at 3. According to plaintiff, Florida law
recognizes and enforces noncompetition agreements, as well as choice-of-law provisions
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.
CV 10-8910 CAS (AJWx)
Date
May 21, 2012
Title
GLENWOOD SYSTEMS, LLC v. VENKATESAN THIRUGNANAM,
ET AL.
contained in contracts. Id. at 5. Here, the alleged employment contract contains a
Connecticut choice-of-law provision. Plaintiff argues that under either Florida or
Connecticut law, covenants not to compete are enforceable. Id. at 5–6.
By order dated May 15, 2012, the Court, applying California law, found that there
was a triable issue of fact as to whether a written contract exists between plaintiff and
Thirugnanam. See Dkt. No. 225, at 18. The Court rejected plaintiff’s argument that Cal.
Civ. Code § 1646 governed the choice-of-law analysis because there is no finding that a
contract was formed, and therefore there is no contract to “interpret.”2
However, should the jury find in favor of plaintiff and conclude that a contract
exists, then it appears that § 1646 would apply to plaintiff’s breach of contract claim
only. Here, it is undisputed that Thirugnanam was solicited by plaintiff in India to work
for Glenwood in Florida and thereafter completed nearly all of that work in Florida.
Accordingly, if the jury concludes that a contract exists, it appears that Florida law would
apply to its interpretation. See Cal. Civ. Code § 1646. At oral argument, counsel for
defendants requested time to file a supplemental brief as to this issue. The Court granted
the request and ordered defendants to submit a brief, not to exceed five pages, on or
before June 4, 2012. The Court will order a reply brief if it is deemed necessary. The
Court therefore reserves judgment on defendants’ first motion in limine.
B.
Motion to Exclude Testimony of Dr. Rajalakshmi Kanakaraj
Defendants seek to exclude the testimony of Dr. Rajalakshmi on the ground that
she was never disclosed as a potential witness in plaintiff’s Rule 26 disclosures or in any
other discovery response.
For the same reasons set forth in the Court’s May 15, 2012 order striking the
declaration of Dr. Rajalakshmi, the Court concludes that her testimony must also be
2
Cal. Civ. Code § 1646 provides that “a contract is to be interpreted according to
the law and usage of the place where it is to be performed; or, if it does not indicate a
place of performance, according to the law and usage of the place where it is made.”
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.
CV 10-8910 CAS (AJWx)
Date
May 21, 2012
Title
GLENWOOD SYSTEMS, LLC v. VENKATESAN THIRUGNANAM,
ET AL.
excluded. See Dkt. No. 225, at 15. Accordingly, defendants’ motion to exclude Dr.
Rajalakshmi’s testimony is GRANTED.
C.
Motion to Exclude George Miller’s Testimony Regarding Damages
Defendants seek to exclude plaintiff’s damages expert, George Miller, because his
opinions are based entirely on what he was told about Glenwood’s finances by Glenwood
president Loganathan and because he has no particular expertise in the medical billing
industry. MIL 3, at 2–3. Defendants seek to exclude the following six opinions proffered
by Miller:
•
Miller’s opinion that Glenwood’s sales increased after Thirugnanam and
Sundaresan were hired, and decreased after they left Glenwood to form
defendant company Augment;
•
Miller’s opinion that defendants’ conduct caused a decline in plaintiff’s
sales;
•
Miller’s opinion that the value of plaintiff’s lost sales from March 2008
through December 2010 is between $3 and $3.5 million;
•
Miller’s opinion that plaintiff’s lost profits are between $865,000 and $2.5
million;
•
Miller’s opinion that defendants’ “unjust gains” from operating Augment
amount to at least $1,683,729 in sales and $1,178,610 in profits; and
•
Miller’s opinion that the minimum damages incurred by Glenwood would be
the defendants’ salaries.
Id. at 3–4.
As an initial matter, the Court concludes that a Daubert hearing is not required
because Miller is sufficiently qualified to serve as an expert witness and defendants do
not challenge his methodology. With regard to his qualifications, Miller is the principal
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.
CV 10-8910 CAS (AJWx)
Date
May 21, 2012
Title
GLENWOOD SYSTEMS, LLC v. VENKATESAN THIRUGNANAM,
ET AL.
and co-founder of Discovery Economics, Inc., an economic consulting firm; he holds an
MBA degree and has thirty years of experience assisting clients with financial, economic,
and accounting issues, including analyzing damages across numerous industries; and he
has served as an expert witness on similar issues in state court, federal court, and
arbitration proceedings. Declaration of George Miller (“Miller Decl.”) ¶¶ 2–4.
Accordingly, Miller is sufficiently qualified to offer an expert opinion regarding
plaintiff’s and defendants’ companies’ economics.
Further, defendants do not challenge Miller’s methods in reaching his opinions, but
rather dispute some of the facts he relied on. However, these are issues for cross
examination. See, e.g., Humetrix, Inc. v. Gemplus S.C.A., 268 F.3d 910, 919 (9th Cir.
2001) (“As to the reasonableness of the assumptions underlying the experts’ lost profit
analysis, criticisms of an expert’s method of calculation [are] a matter for the jury’s
consideration in weighing that evidence. It is for the trier of fact to accept or reject this
evidence, and this evidence not being inherently improbable provides a substantial basis
for the trial court's award of lost profits.”); see also Brighton Collectibles, Inc. v.
Coldwater Creek, Inc., 2010 U.S. Dist. Lexis 98224, at *31 (S.D. Cal. Sept. 20, 2010).
Accordingly, the Court finds that all of Miller’s anticipated testimony is admissible
except for his opinion that defendants caused plaintiff’s sales to decline. Although expert
testimony concerning an ultimate issue is not per se improper, see, e.g., Shad v. Dean
Wittier Reynolds, Inc., 799 F.2d 525, 529 (9th Cir. 1986); Fed. R. Evid. 704(a), “an
expert witness cannot give an opinion as to her legal conclusion, i.e., an opinion on an
ultimate issue of law.” Elsayed Mukhtar v. California State University, Hayward, 299
F.3d 1053, 1065 n.10 (9th Cir. 2002) (emphasis in original); United States v. Duncan, 52
F.3d 97, 101 (2d Cir. 1994) (“When 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.”) (emphasis in original). Permitting Miller to opine that
defendants caused the harm plaintiff alleges is an attempt to substitute his judgment for
the jury’s, and is therefore properly excluded.
Accordingly, defendants’ motion is GRANTED in part and DENIED in part. It is
GRANTED as to Miller’s anticipated testimony that defendants caused plaintiff’s
economic losses. It is DENIED as to the remaining anticipated testimony.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.
CV 10-8910 CAS (AJWx)
Title
GLENWOOD SYSTEMS, LLC v. VENKATESAN THIRUGNANAM,
ET AL.
D.
Date
May 21, 2012
Motion to Exclude George Miller’s Testimony Regarding Glenwood’s
Cost and Profit Percentages
In a similar vein as their third motion in limine, defendants seek to exclude
Miller’s testimony that Glenwood’s costs are approximately 30 percent of its gross
revenue, leaving a 70 percent profit margin. MIL 4, at 1. As discussed above, disputes
as to facts upon which Miller relied in reaching his conclusion is an issue better left for
cross-examination. Humetrix, 268 F.3d at 919. Accordingly, defendants’ motion is
DENIED.
E.
Motion to Exclude Undisclosed Documents and Witnesses
Defendants move to exclude “any documents or witnesses not produced in
discovery or identified in initial disclosures.” MIL 5, at 4.
In opposition, plaintiff argues that defendants’ motion is “overbroad and overly
general” because “[a]ny documents that [d]efendants believe Glenwood should have
produced could have been addressed via [a] Motion to Compel.” Opp’n to MIL 5, at 2.
Plaintiff asserts that motions in limine are meant to address specific objections to
particular evidence, and do not encompass such broad relief as defendants seek. Id. at 3.
Pursuant to Local Rules 16-2.3 and 16-2.4, the parties are required to disclose all
exhibits to be used and all witnesses to be called at trial to one another prior to submitting
their final pretrial conference order. Local Rules 16-5 and 16-6.1 require the parties to
submit to the Court joint lists of all witnesses and exhibits to be used at trial. Defendants’
motion to secure a sweeping order that all undisclosed witnesses and exhibits should be
excluded ignores the parties’ obligations under the local rules. Accordingly, defendants’
motion is DENIED without prejudice to making specific objections to undisclosed
documents and witnesses at trial.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.
CV 10-8910 CAS (AJWx)
Title
GLENWOOD SYSTEMS, LLC v. VENKATESAN THIRUGNANAM,
ET AL.
F.
Date
May 21, 2012
Motion to Exclude the Unsigned Employment Agreement and
References Thereto
Defendants move to exclude introduction at trial of the unsigned employment
agreement attached to the FAC and any reference to its terms on the grounds that it would
violate the best evidence rule and the statute of frauds and, separately, that it lacks
foundation and is hearsay. MIL 6, at 1. According to defendants, plaintiff may not rely
on its assertion that Thirugnanam was the last person to possess a signed version of the
alleged employment contract because plaintiff did not avail itself of the discovery rules at
its disposal, such as moving to compel production of the document. Id. at 5. Moreover,
defendants assert that California’s statute of frauds bars admission of an unsigned
document containing a covenant not to compete . Id. at 5–6. Finally, defendants argue
that the unsigned document is inadmissible hearsay because it is offered to prove the truth
of an “allegedly executed but unproduced employment agreement” and does not satisfy
the business exception to the hearsay rule because plaintiff cannot establish its
foundational requirements. Id. at 6–7.
In opposition, plaintiff asserts that whether Thirugnanam signed the alleged
employment agreement is a question of fact for the jury and that Fed. R. Evid. 1004
allows for the admission of a writing if the original is lost or destroyed. Opp’n to MIL 6,
at 1, 4. According to plaintiff, Loganathan drafted the employment agreement and
therefore has personal knowledge to testify that the unsigned document is the same as the
allegedly signed document. Id. at 5. Moreover, plaintiff argues that the applicability of
the parol evidence rule may have a bearing on the validity of the contract language but
does not render the document inadmissible. Id. at 6.
Fed. R. Evid. 1004 states that:
An original is not required and other evidence of the content of a writing . . . is
admissible if:
(a) all the originals are lost or destroyed, and not by the proponent acting in bad
faith; [or] . . .
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.
CV 10-8910 CAS (AJWx)
Date
May 21, 2012
Title
GLENWOOD SYSTEMS, LLC v. VENKATESAN THIRUGNANAM,
ET AL.
(c) the party against whom the original would be offered had control of the
original; was at that time put on notice, by pleadings or otherwise, that the original
would be a subject of proof at the trial or hearing; and fails to produce it at the trial
or hearing[.]
Here, plaintiff has consistently maintained that Thirugnanam was the last person to
possess a signed copy of the alleged employment agreement and has failed to produce it
throughout the proceedings. Further, Loganathan has stated that he drafted the contract at
issue and therefore has personal knowledge of its contents. Because the Court concluded
that there is a triable issue as to the existence and enforceability of the alleged
employment contract, plaintiff shall be permitted to introduce a purported copy of it at
trial to demonstrate that a contract was entered into. Fed. R. Evid. 1004. Accordingly,
defendants’ motion is DENIED.
G.
Motion to Exclude Evidence of Thirugnanam’s Immigration Status and
Process
Defendants anticipate that plaintiff will attempt to admit immigration paperwork
Thirugnanam allegedly gave to the Murthy Law Firm in connection with his visa
application. Defendants seek to exclude this evidence because its admission would “tap
into a reservoir of xenophobia, general distrust of the ‘Near East[,]’ and resentment over
the perception that U.S. technical jobs are being outsourced to individuals of Indian and
Pakistani descent.” MIL 7, at 3. Moreover, according to defendants, the “one page of the
immigration papers that has any relevance to this case is still unsigned and un-initialed,”
meaning it offers “no evidence of assent to any contract” and further “provides no clues
regarding whether it was actually ever sent to the Murthy Law Firm.” Id. at 3–4. Finally,
defendants assert that the document has not been authenticated by the Murthy Law Firm,
plaintiff, or Thirugnanam, and is separately inadmissible on that ground. Id. at 4.
In opposition, plaintiff asserts that admission of the document presents no unfair
prejudice because all parties to this action, including Glenwood’s president Loganathan,
are of Indian descent. Opp’n to MIL 7, at 2. Further, plaintiff asserts that Thirugnanam’s
immigration documentation “was topped with a cover page verifying that all of the
including documents were either photocopies of originals or the originals themselves.”
Id. at 3.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.
CV 10-8910 CAS (AJWx)
Date
May 21, 2012
Title
GLENWOOD SYSTEMS, LLC v. VENKATESAN THIRUGNANAM,
ET AL.
As discussed in its May 15, 2012 order granting in part and denying in part
defendants’ motion for summary judgment, the Court finds that evidence of
Thirugnanam’s immigration documentation is relevant insofar as it suggests
Thirugnanam had knowledge of and assented to the alleged employment contract. See
Dkt. No. 225, at 18. This evidence’s probative value is not substantially outweighed by
the danger of unfair prejudice, especially in light of the fact that all parties to this
litigation are of the same ethnic descent. Defendants’ motion is therefore DENIED.
H.
Motion to Exclude Evidence of, or Reference to, Defendants’
Solicitation of Existing Glenwood Customers
Defendants argue that, because this Court granted their motion for summary
judgment as to plaintiff’s interference with existing contractual relations claim, plaintiff
should be precluded from introducing any evidence of, or making any reference to,
defendants’ solicitation of existing Glenwood clients on the ground that any such
evidence lacks relevance. MIL 8, at 1.
In opposition, plaintiff argues that “contrary to the Court’s factual findings in the
Tentative Ruling, Glenwood was in contractual relationships with several clients at the
time [d]efendants were interfering and soliciting.” Opp’n to MIL 8, at 2. Thus, plaintiff
argues that defendants’ motion should be denied. Id. at 6.
As stated in the Court’s May 15, 2012 order, defendants are entitled to summary
judgment as to plaintiff’s claim of interference with existing contractual relations. See
Dkt. No. 225, at 20 n.12. Accordingly, plaintiff is not entitled to present any evidence of,
or reference to, defendants’ alleged solicitation of existing Glenwood customers.
Defendants’ motion is therefore GRANTED.
I.
Motion to Exclude Nonparty Witnesses From Courtroom When Not
Testifying
Defendants move to exclude all nonparty witnesses from the courtroom when they
are not testifying. MIL 9, at 1. Plaintiff does not object to excluding any fact witness,
but does request the right to have its expert economist, George Miller, present. Opp’n to
MIL 9, at 2.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.
CV 10-8910 CAS (AJWx)
Date
May 21, 2012
Title
GLENWOOD SYSTEMS, LLC v. VENKATESAN THIRUGNANAM,
ET AL.
It is the Court’s custom to exclude nonparty witnesses from the courtroom when
not testifying. Accordingly, defendants’ motion is GRANTED. The parties’ expert
witnesses will be permitted to remain in the courtroom.
J.
Motion to Exclude Plaintiff From Claiming Punitive Damages
Defendants move to exclude plaintiff from claiming punitive damages at trial
because plaintiff’s Connecticut unfair trade practices act claim is the only claim “under
which Glenwood has claimed punitive damages” and the Court tentatively dismissed that
claim in its summary judgment ruling. MIL 10, at 2.
In opposition, plaintiff asserts that “punitive damages are awardable for the breach
of loyalty [and] intentional interference with existing and prospective economic
advantage” claims, both of which withstood summary judgment. Opp’n to MIL 10, at 2.
Thus, according to plaintiff, the motion “seeks a premature ruling on an issue of
damages” that is properly left for the jury. Id. at 5–6.
Cal. Civ. Code § 3294 states that “[i]n an action for the breach of an obligation not
arising from contract, where it is proven by clear and convincing evidence that the
defendant has been guilty of oppression, fraud or malice, the plaintiff, in addition to
actual damages, may recover damages for the sake of example and by way of punishing
the defendant.” Accordingly, punitive damages are available for plaintiff’s breach of
loyalty and intentional interference with prospective economic advantage claims, and
plaintiff prayed for punitive damages in the FAC. Defendants’ motion is therefore
DENIED.
K.
Motion to Exclude Reference to, or Evidence of, Defendants’ Liability
Insurance and Declaratory Relief Action
Defendants seek to exclude evidence of defendants’ pending liability insurance and
declaratory relief action between defendants and their insurer. MIL 11, at 1. Plaintiff
does not oppose this motion. Accordingly, defendants’ motion is GRANTED.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.
CV 10-8910 CAS (AJWx)
Title
GLENWOOD SYSTEMS, LLC v. VENKATESAN THIRUGNANAM,
ET AL.
III.
Date
May 21, 2012
PLAINTIFF’S MOTIONS IN LIMINE
A.
Motion to Exclude Opinion of Kim Joseph Onisko
Defendants disclosed Onisko as an expert rebuttal witness following plaintiff’s
disclosure of George Miller as its economic expert. Plaintiff moves to exclude Onisko’s
rebuttal opinions as to (1) plaintiff’s lost profits, and (2) defendants’ profits and
compensation.3 As to the first category, Onisko’s anticipated testimony is that “[i]f it is
determined that damages are owed to [p]laintiff, the report of Mr. Miller should be
disregarded due to basic flaws in its methodology.” See Expert Report of Kim Joseph
Onisko, at 2. Onisko relies on seven bases for his opinion. Plaintiff objects to three of
those bases, arguing that they constitute “his own personal opinions that were not
properly disclosed as opinions” and “fail to meet the threshold requirements of relevance
and reliability under Daubert or they constitute opinions on matters reserved for the jury.”
Pl. MIL 1, at 2. Specifically, plaintiff seeks to exclude the following three bases upon
which Onisko relies in formulating his opinion that Miller’s expert report is flawed:
•
“It appears that no client lists, technology, trade secrets or proprietary
materials were taken by [Thirugnanam] and [Sundaresan] to their new
company, Augment. Affidavits by various doctors also suggest that
[Thirugnanam] and [Sundaresan] kept their Augment business separate from
that of Glenwood.” (Basis 1 of 7.)
•
“Glenwood ignored [its] obligation to mitigate damages by not timely hiring
replacements for [Thirugnanam] and [Sundaresan] so damages calculated in
[its] territories after November 2008 are flawed.” (Basis 4 of 7.)
•
“The report [offered by Miller] uses a variable cost percentage of 30% . . .
Costs of goods sold, of company’s in similar businesses, are 41% to 47% .
. . A realistic profit percentage to assess damages would be 10% of the gross
3
Defendants do not seek to elicit testimony from Onisko regarding defendants’
profits and compensation. Opp’n to Pl. MIL 1, at 2. Accordingly, plaintiff’s motion is
DENIED as moot as to that category of anticipated testimony.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.
CV 10-8910 CAS (AJWx)
Date
May 21, 2012
Title
GLENWOOD SYSTEMS, LLC v. VENKATESAN THIRUGNANAM,
ET AL.
revenue that was generated by the domestic operation of Augment.” (Basis
7 of 7.)
Expert Report of Kim Joseph Onisko, at 2–5.
Plaintiff argues that bases 1 and 4 “represent personal opinions on the ultimate
issues in this case that are properly reserved for the jury.” Pl. MIL 1, at 2. Further,
plaintiff asserts that basis 7 “does not meet the threshold requirements of relevance and
reliability” because Onisko “did not consider any statements or information from
Augment’s management to determine if 10% is an accurate number” and instead “relied
upon data from two unrelated, publicly traded companies.” Id. at 3.
In opposition, defendants argue that Onisko, as an expert, “may offer opinions that
encompass ultimate issues.” Opp’n to Pl. MIL 1, at 4. Further, defendants contend that
Onisko’s duty as a rebuttal witness is to “point out errors” in Miller’s report and
opinions, which he does so by applying his twenty-plus years of experience as an
accountant and in the field of medical finances, his numerous economic accreditations,
and his “considerable schooling” to “more than satisfy” the Daubert standard. Id. at 5.
As an initial matter, the Court finds that there is no need for a Daubert hearing
because Onisko is qualified to testify in this case. Onisko is a certified public accountant
and certified forensic accountant, is accredited in business valuations, and is certified in
financial forensics. See Expert Report of Onisko, Exhs. B and C. Further, Onisko has
twenty years of experience in the medical finances field, having done everything from
accounting system setups, reconciliation of medical billings, audits of medical bills, and
day-to-day accounting for medical practices and companies. See Fischer Decl., ¶ 5, Exh.
C. Finally, Onisko has provided expert testimony in approximately twenty-eight state
and federal cases. Accordingly, he is qualified to offer an expert opinion on the
economic methods utilized by plaintiff’s expert Miller. This encompasses Onisko’s
anticipated testimony regarding Miller’s calculation of plaintiff’s alleged lost profits.
Plaintiff is, of course, entitled to cross examine Oniska on the methods he used in
forming his opinion. See Daubert v. Merrel Dow Pharm, Inc., 509 U.S. 579, 595 (1993)
(“Vigorous cross-examination, presentation of contrary evidence, and careful instruction
on the burden of proof are the traditional and appropriate means of attacking shaky but
admissible evidence.”).
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.
CV 10-8910 CAS (AJWx)
Date
May 21, 2012
Title
GLENWOOD SYSTEMS, LLC v. VENKATESAN THIRUGNANAM,
ET AL.
However, certain of Oniska’s anticipated testimony must be excluded as
improperly invading the province of the jury. Specifically, Oniska shall not be permitted
to opine about whether defendants misappropriated plaintiff’s trade secrets or other
proprietary information. E.g., Elsayed Mukhtar v. California State University, Hayward,
299 F.3d 1053, 1065 n.10 (9th Cir. 2002) (“[A]n expert witness cannot give an opinion as
to her legal conclusion, i.e., an opinion on an ultimate issue of law.”) (emphasis in
original); United States v. Duncan, 52 F.3d 97, 101 (2d Cir. 1994) (“When 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.”)
(emphasis in original). Further, Oniska shall not be permitted to opine about plaintiff’s
alleged failure to mitigate damages, as that question is more appropriately addressed by
way of cross examination of plaintiff’s expert Miller.
In accordance with the foregoing, plaintiff’s motion is GRANTED in part and
DENIED in part. It is GRANTED as to Oniska’s anticipated testimony regarding
defendants’ specific conduct and whether plaintiff failed to mitigate damages. It is
DENIED as to Oniska’s opinion that Miller’s methodology in determining plaintiff’s lost
profits is flawed.
B.
Motion to Exclude Opinion of L. Lamar Blount
Defendants disclosed L. Lamar Blount as an industry expert. Blount is expected to
testify that Glenwood’s business model of outsourcing its medical billing to India is not
unique. Plaintiff seeks to exclude the following opinions proffered by Blount:
•
“The evidence reviewed clearly demonstrates that Glenwood’s business
model is commonly used in the medical billing industry.”
•
“No evidence supports any claim that Glenwood’s business model is
unique.”
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.
CV 10-8910 CAS (AJWx)
Title
GLENWOOD SYSTEMS, LLC v. VENKATESAN THIRUGNANAM,
ET AL.
•
Date
May 21, 2012
“No evidence supports any claim that any Glenwood confidential and
proprietary information, methods, products, services and combinations
thereof have been used by Venkatesan Thirugnanam, Senthil Sundaresan,
Augment LLC, or Augment [India].”
See Expert Report of L. Lamar Blount, at 5.
Plaintiff asserts that Blount is not qualified to provide his opinions “given his lack
of knowledge of the medical billing field and related areas.” Pl. MIL 2, at 1–2.
According to plaintiff, Blount’s opinions are based in large part on research he conducted
on the Internet, as well as his comparisons between certain companies and Glenwood
without knowing if those companies are competitors of Glenwood. Id. at 2. Further,
plaintiff asserts that Blount “did not know what markets” Glenwood operates in, “what
size [medical] practices” either Glenwood or Augment support, “or whether they provide
services for specialty practices.” Id. Thus, plaintiff argues that Blount is not qualified as
an expert because he “utilized no methodology other than his own subjective opinions
based on a selective review of evidence.” Id. at 6.
Defendants assert that Blount is more than qualified to serve as an expert. Opp’n
to Pl. MIL 2, at 3. Further, defendants argue that whether Blount knew the number of
employees employed by Glenwood and Augment, knew how much they were paid, knew
about any protected trade secrets, or knew whether defendants breached their duties to
Glenwood “simply have no bearing on whether Glenwood’s business model of
outsourcing to India and ASP computer-based services is unique.” Id. at 4.
The Court finds that Blount is qualified to testify as an expert in this case. Blount
has served as an expert in the medical billing field and has testified regarding medical
billing issues in state and federal courts for nearly 40 years. Expert Report of L. Lamar
Blount, at 2. Further, Blount is a fellow of the Healthcare Financial Management
Association, is a certified healthcare financial professional, is a certified public
accountant, is certified in financial forensics, and is the founder and president of Health
Law Network. Id. Moreover, Blount has audited financial statements, provided
consulting work, and provided litigation support to more than 500 healthcare clients,
including publicly traded national healthcare organizations, multi-hospital groups,
individual hospitals, physician groups, health insurance companies, managed care
CV-90 (06/04)
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Page 14 of 20
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.
CV 10-8910 CAS (AJWx)
Date
May 21, 2012
Title
GLENWOOD SYSTEMS, LLC v. VENKATESAN THIRUGNANAM,
ET AL.
organizations, and governmental agencies. Id. Finally, Blount coauthored “Managing
the Reimbursement Process,” an American Medical Association book that has been used
by nationwide medical practices. Id.
The Court also concludes that Blount’s methodology of comparing Glenwood with
other medical billing companies that maintain overseas operations to conclude that many
of these companies “use a U.S.-based front office for sales and much of their customer
service, with a foreign-based company or office to which it contracts out much or all of
the data processing” is a sound analytical method that will assist the jury in understanding
the relatively complex issue of medical billing practices. Accordingly, Blount may
testify that Glenwood’s business model is commonly used in the medical billing industry
and that there is, in his opinion, no evidence that Glenwood’s business model is unique.
Plaintiff may, of course, cross-examine Blount to attack his opinions. See Daubert v.
Merrel Dow Pharm, Inc., 509 U.S. 579, 595 (1993) (“Vigorous cross-examination,
presentation of contrary evidence, and careful instruction on the burden of proof are the
traditional and appropriate means of attacking shaky but admissible evidence.”).
However, Blount may not testify that no evidence supports plaintiff’s claim that
defendants misappropriated Glenwood’s confidential and proprietary information,
methods, products, services, and combinations thereof. Such opinions invade the
province of the jury and must be excluded. E.g., Elsayed Mukhtar v. California State
University, Hayward, 299 F.3d 1053, 1065 n.10 (9th Cir. 2002) (“[A]n expert witness
cannot give an opinion as to her legal conclusion, i.e., an opinion on an ultimate issue of
law.”) (emphasis in original); United States v. Duncan, 52 F.3d 97, 101 (2d Cir. 1994)
(“When 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.”) (emphasis in original).
Accordingly, plaintiff’s motion is GRANTED in part and DENIED in part. It is
GRANTED as to Blount’s anticipated testimony that defendants did not misappropriate
or otherwise use Glenwood’s confidential and proprietary information. It is DENIED as
to Blount’s testimony that Glenwood’s business model is not unique.
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Page 15 of 20
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.
CV 10-8910 CAS (AJWx)
Title
GLENWOOD SYSTEMS, LLC v. VENKATESAN THIRUGNANAM,
ET AL.
C.
Date
May 21, 2012
Motion to Preclude Testimony of Witnesses Hassan Alkhouli, M.D.,
Ghazwa Ramo, and Gail Flaum
Plaintiff seeks to preclude the testimony of witnesses Hassan Alkhouli, M.D.,
Ghazwa Ramo, and Gail Flaum, as well as any other representative from Dr. Eugene
Flaum’s office or Pathway Medical group, on the ground that these witnesses either
evaded service of deposition subpoenas or failed to appear for their noticed depositions.
Pl. MIL 3, at ii. According to plaintiff, each of the above witnesses signed an affidavit in
support of defendants’ motion for summary judgment, and thereafter “either evaded
service . . . until the discovery cutoff period expired, or accepted service and
subsequently refused to attend their deposition.” Id. at 1. Plaintiff argues that all of the
witnesses should be precluded from testifying under Rule 403 and Fed. R. Civ. P.
37(b)(2) because plaintiff “was not afforded the opportunity to obtain their deposition
testimony during the factual discovery period.” Id. at 5.
In opposition, defendants argue that these “key” witnesses should be permitted to
testify because (1) plaintiff was on notice of these witnesses yet waited sixteen and
nineteen months (depending on the witness) to notice the depositions; (2) the proffered
certificates of nonappearance were taken after the discovery cutoff; and (3) defendants
“are not shown to be in any way at fault for [p]laintiff’s failure to timely take the
depositions.” Opp’n to Pl. MIL 3, at 2. Separately, defendants argue that Rule 37(b)(2)
applies to a party’s failure to appear for a deposition, and not to third party depositions.
Id. Instead, according to defendants, plaintiff should have sought a contempt order,
which it did not do. Id. at 3. Finally, defendants contend that plaintiff has not articulated
how the relevance of these witnesses’ testimony is substantially outweighed by the
danger of unfair prejudice. Id. at 5.
For three reasons, the Court concludes that the witnesses should be permitted to
testify. First, plaintiff’s original complaint, filed in Connecticut on March 11, 2010,
identifies Pathway Medical Group as a major customer allegedly wrongfully solicited by
defendants. See Fischer Decl. ¶ 3, Exh. A at ¶¶ 53–54. Defendants filed declarations
from Dr. Flaum and Dr. Hassan Alkhouli (from Pathway) in support of their original
motion dismiss in July 2010. Id. ¶ 4, Exhs B and C. Moreover, defendants identified
Pathway and the Office of Dr. Eugene Flaum in their Rule 26(a) disclosures in February
2011 as witnesses who had knowledge about the timing and nature of defendants’
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.
CV 10-8910 CAS (AJWx)
Date
May 21, 2012
Title
GLENWOOD SYSTEMS, LLC v. VENKATESAN THIRUGNANAM,
ET AL.
contacts with them and the circumstances under which they contracted for defendants’
services. Id. ¶ 5, Exh. D. Despite this, plaintiff waited between sixteen and nineteen
months—until the proverbial eve of discovery cutoff—to notice the depositions for
witnesses from the Office of Dr. Flaum and Pathway. Plaintiff does not explain its delay
in seeking to depose these witnesses, and its lack of diligence weighs against excluding
the witnesses’ testimony at trial.
Second, after the witnesses allegedly failed to appear for their depositions, plaintiff
did not avail itself of any potential relief from the Court, such as seeking a contempt
order. Instead, plaintiff waited to file the instant motion seeking to exclude the testimony
of each and every witness from the Office of Dr. Flaum and Pathway. Again, plaintiff’s
lack of diligence weighs against excluding the witnesses’ testimony.
Finally, plaintiff’s argument that the testimony, if permitted, would be unfairly
prejudicial under Rule 403 is unpersuasive. Rule 403 states that “[a]lthough relevant,
evidence may be excluded if its probative value is substantially outweighed by the danger
of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations
of . . . needless presentation of cumulative evidence.” Fed. R. Evid. 403. Here, the
witnesses plaintiff seeks to exclude are key witnesses to support defendants’ assertion
that they did not breach, among other things, their duty of loyalty to Glenwood. As such,
the witnesses’ testimony is highly probative. Plaintiff has not demonstrated that the
danger of unfair prejudice would substantially outweigh the testimony’s highly probative
value.
Accordingly, plaintiff’s motion is DENIED.
D.
Motion to Preclude Evidence or Testimony Regarding Augment India’s
President Ram Prassath
In a similar vein as its third motion in limine, plaintiff seeks to preclude evidence
related to Augment India and the testimony of Augment India’s president Ram Prassath
on the ground that Prassath failed to appear for his November 11, 2011 deposition. Pl.
MIL 4, at ii. Thus, plaintiff contends exclusion is warranted under Rules 403 and
37(b)(2). Id. at 3.
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Page 17 of 20
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.
CV 10-8910 CAS (AJWx)
Date
May 21, 2012
Title
GLENWOOD SYSTEMS, LLC v. VENKATESAN THIRUGNANAM,
ET AL.
In opposition, defendants argue that the deposition notice at issue seeks the
deposition of Prassath in his individual capacity pursuant to Fed. R. Civ. P. 45, and not as
a representative of Augment India. Opp’n to Pl. MIL 4, at 2. As such, defendants argue
that plaintiff was required to subpoena Prassath if it wished to compel his attendance. Id.
Defendants contend that they alerted plaintiff of this defect in the deposition notice but
plaintiff did not rectify it. Id. at 3. Accordingly, defendants assert that there is no proper
basis for plaintiff to seek the exclusion of Prassath’s testimony. Id. at 4–5. Finally,
defendants argue that equity weighs against plaintiff’s claim of prejudice. Id.
The Court concludes that Prassath should be permitted to testify. Plaintiff’s notice
of deposition is for “the deposition of Ram Prassath on November 11, 2011” and cites
Fed. R. Civ. P. 45. See Pl. MIL 4, Exh. B at 1. The plain terms of the notice of
deposition therefore demonstrates that plaintiff was not seeking the deposition of
defendant Augment India or Prassath in his representative capacity as president of
Augment India—which would be governed by Fed. R. Civ. P. 30—but rather plaintiff
sought the deposition of Prassath as a nonparty individual. Soon after receiving
plaintiff’s notice of deposition, defendants notified plaintiff of the fact that Prassath is an
individual living in India who is not a party to this litigation, and that plaintiff therefore
was obligated to comply with Rule 45’s subpoena and notice requirements. Fischer Decl.
¶ 3, Exh. A; Rule 45(a)(1)(A)(iv). Plaintiff failed to satisfy either requirement.
Moreover, because Prassath is a foreign national, plaintiff was obligated to comply with
the additional requirements of the Hague Convention on the Service Abroad of Judicial
and Extra-Judicial Documents in Civil and Commercial Matters, to which India is a
signatory. Plaintiff has not demonstrated that it even attempted to comply with those
requirements. Instead, plaintiff simply issued a notice of deposition for a nonparty
foreign citizen to appear in California within 17 days from its notice. This is insufficient
to compel Prassath to appear. For this reason, and for the reasons set forth above in
connection with plaintiff’s third motion in limine, Prassath’s nonappearance does not
provide plaintiff a basis for excluding his trial testimony.
Accordingly, plaintiff’s motion is DENIED.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.
CV 10-8910 CAS (AJWx)
Title
GLENWOOD SYSTEMS, LLC v. VENKATESAN THIRUGNANAM,
ET AL.
E.
Date
May 21, 2012
Motion to Limit Defendants to Three Peremptory Challenges
Plaintiff’s fifth motion seeks an order limiting defendants to three peremptory
challenges. Defendants do not oppose this motion. Plaintiff’s motion is therefore
GRANTED.
F.
Motion to Preclude Evidence or Mention of Immigration-Related
Documentation Signed by Loganathan
Plaintiff’s sixth motion seeks to exclude the introduction of three immigrationrelated documents. The first is a letter sent to immigration officials in 2007 from the
principal of L-Cube Innovative Solutions, Inc. (the U.S.-based company to which
Glenwood outsources certain work) stating that Sundaresan is a full-time employee at LCube; the second is a 2007 letter from Loganathan stating that Thirugnanam is a full-time
employee at Glenwood; and the third is a 2008 letter from Loganathan also stating that
Thirgunanam is a full-time employee of Glenwood. Plaintiff, borrowing a phrase from
defendants’ similar seventh motion in limine, contends that introduction of the
documentation “may well tap into a reservoir of xenophobia, general distrust of the ‘Near
East[,]’ and resentment over the perception that U.S. technical jobs are being outsourced
to individuals of Indian and Pakistani descent.” Pl. MIL 6, at 6. Thus, plaintiff argues
that the probative value of the letters is substantially outweighed by their prejudicial
effect.
As stated above in connection with defendants’ seventh motion, the alleged
prejudicial effect of this evidence is limited by the fact that all parties to this litigation are
of the same ethnic descent. Plaintiff has not demonstrated why the Court should exclude
the introduction of these documents before trial. Accordingly, plaintiff’s motion is
DENIED subject to being renewed at trial.
IV.
CONCLUSION
In accordance with the foregoing, defendants’ second, eighth, ninth, and eleventh
motions in limine are GRANTED. Defendants’ fourth, fifth, sixth, seventh, and tenth
motions in limine are DENIED. Defendants’ third motion in limine is GRANTED in part
and DENIED in part. The Court reserves judgment on defendants’ first motion in limine.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.
CV 10-8910 CAS (AJWx)
Date
May 21, 2012
Title
GLENWOOD SYSTEMS, LLC v. VENKATESAN THIRUGNANAM,
ET AL.
Plaintiff’s fifth motion in limine is GRANTED. Plaintiff’s third, fourth, and sixth
motions in limine are DENIED. Plaintiff’s first and second motions in limine are
GRANTED in part and DENIED in part.
IT IS SO ORDERED.
00
Initials of Preparer
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:
14
CMJ
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