1 2 3 4 8 10 NATIONAL, INC., formerly known as NO. 2:17-CV-01394-SAB 13 Plaintiff, 14 v. ORDER DENYING 15 STANLEY OGDEN, an individual; PLAINTIFF’S MOTION FOR 16 MARCIA OGDEN, an individual; NEW TRIAL 17 ELEANOR O’KEEFE, an individual; 18 LEWIS DORRINGTON, an individual; 19 JOHN HASKELL, JR., an individual; 20 MARY MARK, an individual; CORY 21 ANDERSON, an individual; and ABD 23 SERVICES, INC., a Delaware corporation, 24 Defendants. 25 26 Before the Court is Plaintiff’s Motion for New Trial, ECF No. 267. The 27 motion was heard without oral argument. Plaintiff is represented by Thomas Holt, 28 Megan Crowhurst and Anne Reuben. Defendants are represented by Anna Saber, 1 Christopher Banks, Debra Fischer, Molly Terwilliger and Patrick Duffy. 2 After a six-day trial, the jury returned a verdict in favor of Defendants on all 3 of Plaintiff’s claims. The jury was asked if Plaintiff proved that it “suffered 4 damages by the breach of contract” of the individually-named Defendants and the 5 jury answered “No” for all Defendants. ECF No. 248. 6 Plaintiff asserts that it received an unfair trial because of the following: 7 1. The Court improperly limited the evidence presented by USI regarding 8 causation of damages. Plaintiff asserts the Court improperly altered the burden of 9 proof requiring USI to disprove the false and speculative hypothetical of what 10 might have occurred had Defendants not breached their contracts. 11 2. The Court erroneously limited Plaintiff’s experts to testifying verbatim 12 from their reports, which improperly excluded valid testimony that would have 13 explained the experts’ opinions. Plaintiff maintains these rulings penalized it for 14 weaknesses in Defendants’ case because Defendant chose not to depose one of its 15 experts prior to trial and deposed the other expert haphazardly. 16 3. The Court admitted irrelevant and unfairly prejudicial evidence about the 17 Wells Fargo banking scandal because, in part, the Court itself had “closed [its] 18 account” with Wells Fargo Bank due to media coverage—something wholly 19 unrelated to WFIS. 20 Motion Standard 21 Rule 59(a) states, “A new trial may be granted ... in an action in which there 22 has been a trial by jury, for any of the reasons for which new trials have heretofore 23 been granted in actions at law in the courts of the United States.” Fed. R. Civ. P. 24 59(a)(1). “Rule 59 does not specify the grounds on which a motion for a new trial 25 may be granted.” Zhang v. Am. Gem Seafoods, Inc., 339 F.3d 1020, 1035 (9th Cir. 26 2003). Rather, the court is “bound by those grounds that have been historically 27 recognized.” Id. Historically recognized grounds include, but are not limited to, 28 claims “that the verdict is against the weight of the evidence, that the damages are 1 excessive, or that, for other reasons, the trial was not fair to the party moving.” 2 Montgomery Ward & Co. v. Duncan, 311 U.S. 243, 251 (1940). Trial courts may 3 grant a new trial only if the verdict is contrary to the clear weight of the evidence, 4 is based upon false or perjurious evidence, or to prevent a miscarriage of justice.” 5 Passantino v. Johnson & Johnson Consumer Prods., 212 F.3d 493, 510 n.15 (9th 6 Cir. 2000). 7 Analysis 8 1. Presentation of Evidence re: Causation 9 Plaintiff argues the Court improperly limited the evidence presented by USI 10 regarding causation of damages. From the beginning of the trial, Plaintiff’s and the 11 Court’s understanding of what the trial was about was fundamentally different. 12 Plaintiff wanted to discuss and present background and context information 13 regarding the underlying events that supported the court’s finding of liability on 14 summary judgment. The Court believed the jury trial was about damages and 15 specifically, whether Defendants caused the requested 10 million dollars in 16 damages. 17 In 2019, the court issued a ruling on the parties’ Motions for Summary 18 Judgment. It found that Defendants Ogden and O’Keefe signed a covenant not to 19 ‘compete as part of the merger between Pettit-Morray and Acordia; Plaintiff was 20 entitled to enforce the agreements; and Plaintiff established a breach of the 21 agreement based on Ogden’s and O’Keefe’s admissions during their deposition 22 that they continued to handle the insurance business of former Wells Fargo clients 23 on behalf of ABD. ECF No. 128. The court found that no reasonable jury could 24 find that Defendant Haskell solicited, participated in solicitation, or promoted the 25 solicitation of Wells Fargo customers, but found Haskell promoted the recruitment 26 of Wells Fargo employees, specifically Lewis Dorrington, in violation of the 2013 27 and 2015 agreements. With respect to ABD, the court found it tortiously interfered 28 with Plaintiff’s contractual expectations when Mr. Ogden and Ms. O’Keefe 1 continued handling insurance business of Wells Fargo clients and when Mr. 2 Haskell assisted ABD in recruiting his former co-workers but noted that Plaintiff 3 had not shown that Mr. Ogden breached any common law duties on the limited 4 record before him. ECF No. 128. 5 Specifically, the court made the following statement: “Even if the fact of 6 damage arising from Mr. Ogden, Ms. O’Keefe, and Mr. Haskell’s breaches is not 7 seriously in dispute, plaintiff has not provided “reasonably convincing evidence 8 indicating the amount of damages’ associated with those breaches.” But the court 9 went on to say, “Plaintiff, for its part, has not yet established damages associated 10 with any of the breaches discussed above.” Id. at 20. 11 Plaintiff agues the court’s statements should be interpreted as a finding that 12 damages were caused by Defendants’ breach of contract, and the only issue before 13 the jury would have been the amount. But that is not what the court wrote. Plaintiff 14 fails to appreciate that the use of the word “associated” has the same meaning as 15 the word “caused,” that is, the court concluded that Plaintiff had ‘not yet 16 established damages” caused by the breaches, and thus causation and the amount 17 of any damages were the remaining questions for the jury. 18 This understanding of that Order was what informed the Court regarding the 19 scope of the evidence that Plaintiff would be allowed to present at trial. it was not 20 appropriate for Plaintiff to retry the liability phase of this case. Rather, the jury was 21 properly instructed that Plaintiff had shown and the Court had found that 22 Defendants did breach their agreements, and the question presented to the jury was 23 whether the breach caused any damages and the amount, if any, of the damages. 24 Plaintiff asserts that during trial, the Court impermissibly shifted the burden 25 of proof by requiring USI to disprove the false and speculative hypothetical of 26 what might have occurred had Defendants not breached their contracts. Not so. 27 The jury instructions, which were agreed to by Plaintiff, properly allocated the 28 burden of proof. The jury was instructed that Plaintiff had the burden of proving by 1 a preponderance of evidence that it incurred actual economic damages because of 2 Defendant’s breach of contract and the amount of those damages. The jury was 3 instructed on what actual damages meant. It was instructed that in calculating 4 Plaintiff’s actual damages, the jury was to determine the sum of money that would 5 put Plaintiff in as good a position as it would have been in if the parties had 6 performed all of their promises under the contract. And the jury was instructed 7 regarding “lost net profits,” which was the type and scope of the damages 8 requested in this case.
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1 2 3 4 8 10 NATIONAL, INC., formerly known as NO. 2:17-CV-01394-SAB 13 Plaintiff, 14 v. ORDER DENYING 15 STANLEY OGDEN, an individual; PLAINTIFF’S MOTION FOR 16 MARCIA OGDEN, an individual; NEW TRIAL 17 ELEANOR O’KEEFE, an individual; 18 LEWIS DORRINGTON, an individual; 19 JOHN HASKELL, JR., an individual; 20 MARY MARK, an individual; CORY 21 ANDERSON, an individual; and ABD 23 SERVICES, INC., a Delaware corporation, 24 Defendants. 25 26 Before the Court is Plaintiff’s Motion for New Trial, ECF No. 267. The 27 motion was heard without oral argument. Plaintiff is represented by Thomas Holt, 28 Megan Crowhurst and Anne Reuben. Defendants are represented by Anna Saber, 1 Christopher Banks, Debra Fischer, Molly Terwilliger and Patrick Duffy. 2 After a six-day trial, the jury returned a verdict in favor of Defendants on all 3 of Plaintiff’s claims. The jury was asked if Plaintiff proved that it “suffered 4 damages by the breach of contract” of the individually-named Defendants and the 5 jury answered “No” for all Defendants. ECF No. 248. 6 Plaintiff asserts that it received an unfair trial because of the following: 7 1. The Court improperly limited the evidence presented by USI regarding 8 causation of damages. Plaintiff asserts the Court improperly altered the burden of 9 proof requiring USI to disprove the false and speculative hypothetical of what 10 might have occurred had Defendants not breached their contracts. 11 2. The Court erroneously limited Plaintiff’s experts to testifying verbatim 12 from their reports, which improperly excluded valid testimony that would have 13 explained the experts’ opinions. Plaintiff maintains these rulings penalized it for 14 weaknesses in Defendants’ case because Defendant chose not to depose one of its 15 experts prior to trial and deposed the other expert haphazardly. 16 3. The Court admitted irrelevant and unfairly prejudicial evidence about the 17 Wells Fargo banking scandal because, in part, the Court itself had “closed [its] 18 account” with Wells Fargo Bank due to media coverage—something wholly 19 unrelated to WFIS. 20 Motion Standard 21 Rule 59(a) states, “A new trial may be granted ... in an action in which there 22 has been a trial by jury, for any of the reasons for which new trials have heretofore 23 been granted in actions at law in the courts of the United States.” Fed. R. Civ. P. 24 59(a)(1). “Rule 59 does not specify the grounds on which a motion for a new trial 25 may be granted.” Zhang v. Am. Gem Seafoods, Inc., 339 F.3d 1020, 1035 (9th Cir. 26 2003). Rather, the court is “bound by those grounds that have been historically 27 recognized.” Id. Historically recognized grounds include, but are not limited to, 28 claims “that the verdict is against the weight of the evidence, that the damages are 1 excessive, or that, for other reasons, the trial was not fair to the party moving.” 2 Montgomery Ward & Co. v. Duncan, 311 U.S. 243, 251 (1940). Trial courts may 3 grant a new trial only if the verdict is contrary to the clear weight of the evidence, 4 is based upon false or perjurious evidence, or to prevent a miscarriage of justice.” 5 Passantino v. Johnson & Johnson Consumer Prods., 212 F.3d 493, 510 n.15 (9th 6 Cir. 2000). 7 Analysis 8 1. Presentation of Evidence re: Causation 9 Plaintiff argues the Court improperly limited the evidence presented by USI 10 regarding causation of damages. From the beginning of the trial, Plaintiff’s and the 11 Court’s understanding of what the trial was about was fundamentally different. 12 Plaintiff wanted to discuss and present background and context information 13 regarding the underlying events that supported the court’s finding of liability on 14 summary judgment. The Court believed the jury trial was about damages and 15 specifically, whether Defendants caused the requested 10 million dollars in 16 damages. 17 In 2019, the court issued a ruling on the parties’ Motions for Summary 18 Judgment. It found that Defendants Ogden and O’Keefe signed a covenant not to 19 ‘compete as part of the merger between Pettit-Morray and Acordia; Plaintiff was 20 entitled to enforce the agreements; and Plaintiff established a breach of the 21 agreement based on Ogden’s and O’Keefe’s admissions during their deposition 22 that they continued to handle the insurance business of former Wells Fargo clients 23 on behalf of ABD. ECF No. 128. The court found that no reasonable jury could 24 find that Defendant Haskell solicited, participated in solicitation, or promoted the 25 solicitation of Wells Fargo customers, but found Haskell promoted the recruitment 26 of Wells Fargo employees, specifically Lewis Dorrington, in violation of the 2013 27 and 2015 agreements. With respect to ABD, the court found it tortiously interfered 28 with Plaintiff’s contractual expectations when Mr. Ogden and Ms. O’Keefe 1 continued handling insurance business of Wells Fargo clients and when Mr. 2 Haskell assisted ABD in recruiting his former co-workers but noted that Plaintiff 3 had not shown that Mr. Ogden breached any common law duties on the limited 4 record before him. ECF No. 128. 5 Specifically, the court made the following statement: “Even if the fact of 6 damage arising from Mr. Ogden, Ms. O’Keefe, and Mr. Haskell’s breaches is not 7 seriously in dispute, plaintiff has not provided “reasonably convincing evidence 8 indicating the amount of damages’ associated with those breaches.” But the court 9 went on to say, “Plaintiff, for its part, has not yet established damages associated 10 with any of the breaches discussed above.” Id. at 20. 11 Plaintiff agues the court’s statements should be interpreted as a finding that 12 damages were caused by Defendants’ breach of contract, and the only issue before 13 the jury would have been the amount. But that is not what the court wrote. Plaintiff 14 fails to appreciate that the use of the word “associated” has the same meaning as 15 the word “caused,” that is, the court concluded that Plaintiff had ‘not yet 16 established damages” caused by the breaches, and thus causation and the amount 17 of any damages were the remaining questions for the jury. 18 This understanding of that Order was what informed the Court regarding the 19 scope of the evidence that Plaintiff would be allowed to present at trial. it was not 20 appropriate for Plaintiff to retry the liability phase of this case. Rather, the jury was 21 properly instructed that Plaintiff had shown and the Court had found that 22 Defendants did breach their agreements, and the question presented to the jury was 23 whether the breach caused any damages and the amount, if any, of the damages. 24 Plaintiff asserts that during trial, the Court impermissibly shifted the burden 25 of proof by requiring USI to disprove the false and speculative hypothetical of 26 what might have occurred had Defendants not breached their contracts. Not so. 27 The jury instructions, which were agreed to by Plaintiff, properly allocated the 28 burden of proof. The jury was instructed that Plaintiff had the burden of proving by 1 a preponderance of evidence that it incurred actual economic damages because of 2 Defendant’s breach of contract and the amount of those damages. The jury was 3 instructed on what actual damages meant. It was instructed that in calculating 4 Plaintiff’s actual damages, the jury was to determine the sum of money that would 5 put Plaintiff in as good a position as it would have been in if the parties had 6 performed all of their promises under the contract. And the jury was instructed 7 regarding “lost net profits,” which was the type and scope of the damages 8 requested in this case. This required Plaintiff to “prove with reasonable certainty 9 that net profits would have been earned but were not earned because of 10 Defendant’s breach of contract.” Did this require Plaintiff to prove a hypothetical? 11 Yes, but that is the nature of the type of damages that it requested. See Alaska 12 Rent-A-Car v, Inc. v. Avis Budget Grp., Inc., 738 F.3d 960, 970 (9th Cir. 2013) 13 (noting that damages resulting from the loss of future profits are often an 14 approximation). Plaintiff was not required to disprove a false and speculative 15 hypothetical. Instead, Plaintiff was asked to show by a preponderance of the 16 evidence that it was entitled to claim “lost net profits” because of Defendant’s 17 breach of their agreements. 18 Plaintiff has not shown it is entitled to a new trial based on the Court’s 19 refusal to permit Plaintiff to retry the litigation phase of this case. 20 2. Scope of Plaintiff’s Expert Witnesses 21 Plaintiff argues the Court improperly excluded valid testimony that would 22 have explained the experts’ opinions; instead, the Court erroneously limited 23 Plaintiff’s experts to testifying verbatim from their reports. 24 Fed. R. Civ. P. 26(a)(2)(A) requires that all expert witnesses be disclosed. 25 Expert witnesses must either prepare a detailed written report under Rule 26 26(a)(2)(B) or, if not required to provide a written report, the party must disclose: 27 “(i) the subject matter on which the witness is expected to present evidence under 28 Federal Rule of Evidence 702, 703, or 705; and (ii) a summary of the facts and 1 opinions to which the witness is expected to testify.” Fed. R. Civ. P. 26(a)(2)(C). 2 Rule 26(a)(2)(B)(i) requires the written report contain “a complete statement of all 3 opinions the witness will express and the basis and reasons for them.” If a party 4 fails to provide information required by Rule 26(a), the party is not allowed to use 5 that information at trial, unless failure to provide the information was substantially 6 justified or is harmless. Fed. R. Civ. P. 37(c)(1). 7 The Court limited the experts to testify to what was disclosed in their 8 reports. Fed. R. Civ. P. 26(a)(2)(B) requires experts to provide written reports in 9 order to prevent unfair surprise at trial. Here, Defendant objected to the jury 10 hearing opinions that were not contained in the written reports, stating they were 11 unfairly surprised and would be prejudiced if Plaintiff’s experts were permitted to 12 testify to opinions not contained in their reports. The Court agreed and limited the 13 experts to those opinions that were presented in their reports. The Court was within 14 its authority to do so, and Plaintiff has not shown it is entitled to a new trial based 15 on the limiting of their experts’ testimony. Additionally, Plaintiff cannot show it 16 was prejudiced by any limitation to Dr. Nickerson’s testimony because the jury 17 found that Plaintiff did not show that Defendants’ breach of contract caused 18 Plaintiff’s damages. Plaintiff could have easily avoided this situation if it had 19 provided sufficient and complete expert disclosures prior to trial, as required by the 20 Rules. 21 3. Wells Fargo Banking Scandal 22 Plaintiff argues the Court unfairly allowed the jury to hear evidence of the 23 Wells Fargo Banking scandal. Plaintiff suggests the Court was influenced by its 24 decision to close its accounts in Wells Fargo. It is true the Court made that 25 statement outside the presence of the jury. Regardless, testimony at trial from 26 customers and former employees indicated that the scandal was highly relevant to 27 them and relevant to their decision to leave Plaintiff and seek services and 28 employment elsewhere. The jury did not hear the challenged comment from the 1] Court, and it had no bearing on the Court’s decision. Plaintiff has not shown it is entitled to a new trial because the jury heard evidence regarding Wells Fargo’s banking scandal. 4. Conclusion 5 From the beginning of trial, the Court was clear that it saw this as a damages case. And from the beginning of trial, Plaintiff attempted to present evidence to the jury regarding liability that went beyond basic background information, which was not relevant to the question before and unnecessarily prolonged the trial. Plaintiff was given a fair opportunity to present its damages case to the jury. The jury found that it did not meet its burden. Most damaging perhaps to Plaintiff's case was the testimony from former customers that they would not have stayed with Plaintiff if Defendants Ogden and O’Keefe were no longer servicing their accounts. Also, the could have reasonably found that after Ogden, O’Keefe, and others left, Plaintiff was not in a position to adequately service the large accounts that 15|| ultimately left to obtain insurance elsewhere. 16 Accordingly, IT IS HEREBY ORDERED: 17 1. Plaintiff's Motion for New Trial, ECF No. 267, is DENIED. 18 2. The joint Stipulation, ECF No. 274, is GRANTED. 19 IT IS SO ORDERED. The District Court Clerk is hereby directed to enter this Order and to provide copies to counsel. 21 DATED this 27th day of June 2023. 22
24 Soler □□□ 25 U.S. Judge Stanley A. Bastian 26 27 28 ORDER DENYING PLAINTIFF’S MOTION FOR NEW TRIAL ~ 7