ARGUSH v. LPL FINANCIAL, LLC et al, No. 3:2013cv07821 - Document 158 (D.N.J. 2017)

Court Description: OPINION filed. Signed by Judge Anne E. Thompson on 1/23/2017. (km)
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ARGUSH v. LPL FINANCIAL, LLC et al Doc. 158 RECEIVED NOT FOR PUBLICATION UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY JAN 23 2017 AT 8:30 M WILLIAM T. WALSH CLERK LEEARGUSH, Plaintiff, Civ. No. 13-7821 v. LPL FINANCIAL, LLC, LPL HOLDINGS INC., ANDREW PUTTERMAN, and FORTIGENT, LLC, Defendants. ALAN GAVORNIK, Plaintiff, Civ. No. 14-955 (consolidated for pretrial purposes) v. LPL·FINANCIAL, LLC, LPL HOLDINGS INC., ANDREW PUTTERMAN, and FORTIGENT, LLC, Defendants.· NICHOLAS MARINELLO, Plaintiff, I v. Civ. No. 14-956 (consolidated for pretrial purposes) . I LPL FINANCIAL, LLC; LPL HOLDINGS INC., ANDREW PUTTERMAN, and FORTIOENT, . . .. . . OPINION - : Defendants. 1 INTRODUCTION This matter has come before the Court on the motion to strike Plaintiffs' Expert Reports brought by Defendants in the above-captioned consolidated cases, LPL Financial, LLC and LPL Holdings, Inc. (collectively, "Defendants"). (ECF No. 125). 1 Plaintiffs Lee Argush, Alan Gavomik, and Nicholas Marinello (collectively, "Plaintiffs") oppose. (ECF No. 132). The Court has decided the motion based on the written submissions of the parties pursuant to Local Civil Rule 78.l(b). For the reasons stated herein, Defendants' motion will be granted. BACKGROUND The facts of these cases are well known to the parties and need not be recited atlength here. This case arises out of an employment dispute between the three named Plaintiffs and Defendant LPL Financial. Plaintiffs Argush, Gavomik and Marinello are former employees of LPL Financial. LPL Holdings is the parent company of LPL Financial. All three Plaintiffs had their employment terminated by LPL Finap.cial in 2013. The main issue is whether each of the three Plaintiffs were validly terminated -"for cause.·" . On August 5, 2014, this Court granted in part Defendants' motion to dismiss in each of the three (Civ. No. 13-7821; ECF 22; Civ. No. 14-955, ECFNQ; 20; Civ. No. 14- 956, ECF No.. 20). Additionally, on August 24, 2016, this Court granted Defendants' Motion to Dismiss Count Four of Plaintiffs' respective· Complaints, which sought a declaratory judgment that}>laintiffs' restrictive and void. (Civ. No. 1_3:-7821, ECF 110). As a · result, in eachcase, Plaintiff has two reniaining claims against Defendants: Breach of Employment Agreement and Breach of Contract. 1 Unless otherwise noted, all citations to the docket in this opinion are made to Civ. No. 13-7821. The Court dismissed each of the Plaintiffs' claims for: ( 1) violation of the Conscientious Employee Protection Act ("CEPA"); and (2) tortious interference. The Court also dismissed Plaintiff Argush' s claims for breach of the covenant of good faith and fair dealing and conversion. 2 2 The deadline for the completion of fact discovery in these cases was June 16, 2016. (ECF No. 74). The deadline for filing dispositive motions was July 8, 2016. (Id.). On July 19, 2016, Plaintiffs served three expert reports on Defendants which opine on economic losses claimed by each Plaintiff as a result of the alleged breaches of contract. (Deel. Of Jakob B. Halpern, Exs. A-C, ECF No. 125-3) ("Plaintiffs' Expert Reports"). Defendants previously filed an application to strike Plaintiffs' expert reports before the Magistrate Judge. (ECF No. 107). The Magistrate Judge denied the application without prejudice and directed that it be refiled and heard before the District Court. (ECF No. 117). Defendants thereafter filed the instant motion to strike these expert reports. (ECF No. 125). Therefore, Defendants' motion to strike Plaintiffs' expert reports is currently before the Court. DISCUSSION Defendants argue that a large portion of Plaintiffs' expert reports should be stricken as irrelev8:tlt inasmuch as the reports on damages that cannot be recovered as a matter of law. Because the Court finds Defendants' first argument to be dispositive, Defendants' other arguments need not be addressed.· · . the adm.issibility of expert testimony is governed by Federal Rule of Evidence 702 - . and Daubertv.· Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993) and its progeny, one of the requirements ofexpert testimony is "relevance," which should be evaluated under the standard expressed in Fed. R .. Evid. 401. United States v. Ford, 481F.3d215, 218 (3d · Cir. 2007). Federal Rule of Evidence 401 states that evidence is relevant if it has any tendency to make a fact of consequence in determining an action mote or less probable than it would be without the evidence. Fed. R. Evid. 401. Here, a large portion of Plaintiffs' expert reports opine that front pay damages-lost future earnings that Plaintiffs might have made if their employment with LPL Financial was 3 never terminated-.may be· recoverable as a result of Defendants' alleged breach of contract. (See Plaintiffs' Expert Reports, ECF No. 125-3, Ex. A at 2-24; Ex. B at 2-25; Ex. C at 2-25). Defendants argue that if Plaintiffs were to ultimately prevail at trial, they would be entitled to the damages set forth in the contracts at issue in these cases, specifically the severance benefits set forth in the offer letters signed by each of the three Plaintiffs and the cancelled stock options set forth in the documents governing LPL equity grants. (Defs.' Mot., ECF No. 125-1at4). However, Defendants claim that Plaintiffs' expert reports opine that Plaintiffs may also be entitled to damages in the form of front pay damages which would greatly increase each of the Plaintiffs' potential damages in theses cases from several hundred thousand dollars per plaintiff to $7.0-8.2 million dollars per plaintiff. (Id. at 4-5). In the cases before this Court, many of the Pl_aintiffs' claims, including each of the Plaintiffs' CEPA claims, have been dismissed. As a result, the only remaining claims are for breach C?femploymentagreement and breach of contract. No. 13-7821, ECF Nos. 22, 110; Civ. No. 14-955, ECF No. 20; Civ. No. 14-956, ECF No. 20). Plaintiffs do not dispute that they were at-will employees, and as such, could have been terminated at any time with or without :· - Ex.Mat 3; Ex. N. at3;.Ex. 0 atJ).};;Jbe that Plaintiffs cite to support their claim for front pay are distinguishable in that they either are not relevant or included claims for discrimination; retaliatory discharge or promissory estoppel. See, e.g., Quinlan V; Curtiss-Wright 425 N.J. Super335, 366 (App. Div. 2012) (finding that employees maystill collect front pay in a New Jersey Law Against Discrimination case); Maxfield v. Sinclair1nt'l., 166 F.2 788, 795-96 (3d Cir. 1985) (finding that front pay damages are permissible in a federal ADEA claim). Tellingly, Plaintiffs do not cite any authority, which stands for the proposition that an at-will employee can receive front pay damages .on a breach of contract theory under New Jersey law. 4 . r·. Notwithstanding Plaintiffs' lack of authority, Plaintiffs argue that such front pay damages could still possibly be within the mutual legitimate expectation interest of the parties to these contracts. (Pls.' Opp'n at 9, ECF No. 132). Given the contractually-defined severance benefits in the contracts at issue here, the Court finds Plaintiffs' argument unavailing. Therefore, the Court is persuaded that a large portion of Plaintiffs' expert reports opine on economic losses in the form of front pay damages are not recoverable under Plaintiffs' remaining claims. As a result, those sections of Plaintiffs' expert reports are irrelevant. They must be stricken and not considered in these cases. CONCLUSION For the reasons discussed above, Defendants' motion will be granted. An appropriate - order will -- .__ . ·- •·:_·. ·_-. _.;_·.. ; . _ - - _:: 5