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James T. Scatuorchio Racing Stable, LLC v. Walmac Stud Management, LLC

United States District Court, E.D. Kentucky, Central Division, Lexington

April 30, 2014

JAMES T. SCATUORCHIO RACING STABLE, LLC, et al., Plaintiffs,
v.
WALMAC STUD MANAGEMENT, LLC, et al., Defendants.

MEMORANDUM OPINION AND ORDER

DANNY C. REEVES, District Judge.

Plaintiffs James T. Scatuorcho, LLC ("Scatuorchio, LLC"), James T. Scatuorchio, Kevin Scatuorchio, Courtney Sullivan, and Bryan Sullivan have moved to exclude the opinion testimony of Michael E. Hernon and strike his affidavit and errata sheet. [Record Nos. 196, 263] For the reasons discussed below, the plaintiffs' motions will be granted.

I.

The plaintiffs retained Stephen Johnson and James LaMonica as experts to render opinions on the standard industry practices for advertising and managing stallions. [ See Record Nos. 191-6, 191-7.] These experts opined that the defendants' management and billing practices did not conform to industry standards and practice. [ Id. ] The defendants hired Michael Hernon to counter the testimony of Johnson and LaMonica. [Record No. 196-8] For example, on the topic of Walmac Stud assigning stallion manager duties to Walmac Farm, Hernon states "The Co-Owners Agreement allows for the assignment of the duties of Walmac Stud [] as stallion manager to an affiliate. It is not uncommon for farms to have a separate entity which acts as the syndicate or stallion manager." [ Id., p. 5]

The plaintiffs deposed Hernon on January 16, 2014. During his deposition, Hernon testified that he met with Robert Beck, Frank Becker, and Defendant Jones to review a draft of the report before it was submitted.[1] [Record No. 196-9, p. 172] Hernon stated that he brought his company letterhead to this meeting and Jones brought a first draft of the report that he had prepared for Hernon containing opinions responding to Johnson and LaMonica's reports. [ Id., pp. 171, 174] Hernon stated that, while edits were made to Jones' draft, the final report was 90% unchanged. [ Id., pp. 179-80] Hernon could not identify any portion of his opinion, analysis, or subject matter that had been removed or changed from Jones' draft. [ Id., pp. 180-81, 184] Hernon went on to state that after review of the draft, it was printed it on his company letterhead and he signed it. [ Id., p. 177] Hernon testified that this entire process took sixty to ninety minutes. [ Id., pp. 177-78]

Hernon also disclosed that while his report contained opinions based on the COA and the Dean Dorton Ford Report, an equine industry accounting survey, he had not seen those documents until after his report was submitted. [ Id., pp. 187-89, 305] During questioning by the defendants' counsel, Hernon testified that he had other meetings with Jones and Robert Beck during which they discussed his expert report and that Jones had informed him of the Dean Dorton Ford Report before his report was signed. [ Id., p. 355-56] Hernon also stated that he had spent approximately 15 to 20 hours on the matter, including attending meetings and review of materials. [ Id., p. 171]

The plaintiffs have moved to exclude Hernon as an expert, arguing that his report is deficient under Rule 26(a)(2)(B) because: (i) the opinions in the report are not Hernon's; (ii) Hernon's testimony is unreliable under the Federal Rules of Evidence; and (iii) Hernon is not qualified to offer testimony concerning certain subject areas. [Record No. 196-1, p. 1] In response, the defendants filed an affidavit of Hernon and an errata sheet. These materials contend that, due to his inexperience with depositions, Hernon was confused and gave incorrect answers. [Record Nos. 241, 262-1] Those documents state that the actual amount of material changed from the first draft and the final report was closer to 50% and that there were actually five meetings involving Hernon and his counsel during which they reviewed and revised his opinion letter. [ Id. ] Thus, they argue that Hernon should not be excluded because his report was substantially his own. The defendants also contend that Hernon is qualified to testify on matters concerning stallion management. [Record No. 240, p. 5]

The plaintiffs have also moved to strike the affidavit and errata sheet. [Record No. 263] They argue that the errata sheet does not comply with Rule 30(e) of the Federal Rules of Civil Procedure because it makes significant alterations to what Hernon said under oath and does not comply with the procedural requirements of the rule. [Record No. 263-1, pp. 6-8] The plaintiffs seek to strike Hernon's affidavit, claiming that it contradicts his deposition testimony and, alternatively, should be considered an inappropriate "sham affidavit." [ Id., pp. 8-17] In response, the defendants argue that the Sixth Circuit allows substantive changes through errata sheets to deposition testimony and that rules regarding contradictory and sham affidavits do not apply. [Record No. 269, pp. 2-8]

II.

A. Motion to Strike Affidavit and Errata Sheet

The plaintiffs assert that the errata sheet is impermissible under Rule 30(e) of the Federal Rules of Civil Procedure. They claim that the defendants did not comply with the procedural requirements of the rule which mandates that a deponent or party request a review of the deposition transcript or recording before the deposition is completed. [Record No. 263-1, pp. 6-7] Additionally, they argue that the errata sheet impermissibly seeks to substantially alter what was said under oath. The plaintiffs contend that this is prohibited in this circuit. [ Id., pp. 7-9] However, the defendants assert that Sixth Circuit allows parties to make substantive changes to depositions through the use of errata sheets. [Record No. 269, pp. 2-5]

Rule 30(e) provides as follows:

(e) Review by the Witness; Changes.
(1) Review, Statement of Changes. On request by the deponent or a party before the deposition is completed, the deponent must be allowed 30 days after being notified by the officer that ...

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