United States District Court, D. Colorado
ORDER ON PRETRIAL EVIDENTIARY MOTIONS
William J. Martínez United States District Judge
Plaintiff Bio Med Technologies Corporation (“Plaintiff” or “Bio Med”) brings this action against Defendant Sorin CRM USA, Inc. (“Defendant” or “Sorin”) arising out of an agreement under which Plaintiff was to sell Defendant’s products. (ECF No. 1.) The only remaining claim is Plaintiff’s claim for breach of the covenant of good faith and fair dealing. (ECF No. 109.) This matter is before the Court on two pretrial evidentiary motions: (1) Defendant’s Motion to Exclude the Opinions and Testimony of Jon Karraker, brought pursuant to Federal Rule of Evidence 702 (“702 Motion”) (ECF No. 110), and (2) Defendant’s Motion in Limine (ECF No. 117). For the reasons set forth below, the 702 Motion is denied, and the Motion in Limine is granted as to any undisclosed damages theories but denied in all other respects.
Defendant is a medical device company that develops, manufactures, and sells medical technologies for the treatment of cardiac rhythm disorders. (ECF No. 76 at 2.) Plaintiff and Defendant executed an Independent Sales Representative Agreement (“Agreement”) with an effective date of August 1, 2009. (Id. at 3.) Under the Agreement, Plaintiff sold cardiac rhythm management products for Defendant. (Id.) Plaintiff was operated by Jack Oliver, a medical device sales representative, who signed the Agreement on Plaintiff’s behalf. (Id.; ECF No. 95-1 at 15.) Plaintiff filed this action on January 21, 2014, bringing claims of breach of contract, fraud, conversion, and interference with business relations. (ECF No. 1.) The Agreement terminated on August 1, 2014 when Defendant provided Plaintiff a non-renewal notice. (ECF No. 76 at 3.)
On January 30, 2015, the Court granted in part Defendant’s Early Motion for Partial Summary Judgment, finding in Defendant’s favor as to Plaintiff’s conversion and interference with business relations claims. (ECF No. 73.) Defendant subsequently moved for summary judgment as to Plaintiff’s remaining claims. (ECF No. 79.) On August 17, 2015, the Court granted summary judgment in Defendant’s favor as to Plaintiff’s express breach of contract claim and fraud claim, as well as the portion of Plaintiff’s claim for breach of the implied covenant of good faith and fair dealing that relied on the exclusion of Drs. Kutalek and Blumberg from Plaintiff’s territory. (ECF No. 109.) The Court denied summary judgment as to the remainder of Plaintiff’s claim for breach of the covenant of good faith and fair dealing based on a finding that factual disputes existed as to: (1) Defendant’s alleged bad faith refusal to approve sub-representatives and technicians; (2) Defendant’s alleged bad faith interference with Plaintiff’s sales efforts in the Barbados market; and (3) interference by Joe Dobis, Defendant’s Sales Manager, in accounts within Plaintiff’s assigned sales territory by way of direct sales and underpricing. (Id. at 8-16.)
Defendant filed its 702 Motion on September 14, 2015. (ECF No. 110.) Plaintiff filed a Response (ECF No. 115) and Defendant a Reply (ECF No. 116). Defendant’s Motion in Limine (ECF No. 117) was filed on November 2, 2015, and Plaintiff’s Response (ECF No. 119) was filed one week later. Both Motions are fully briefed and ripe for disposition.
A. 702 Motion
Defendant’s 702 Motion seeks to exclude testimony by Plaintiff’s damages expert, Jon Karraker, a certified public accountant. (ECF No. 110.) Defendant argues that Karraker’s opinions are irrelevant to Plaintiff’s sole remaining claim, and are unreliable because they are based on insufficient facts or data and fail to consider alternative causes. (Id.)
1. Legal Standard
A district court must act as a “gatekeeper” in admitting or excluding expert testimony. Bitler v. A.O. Smith Corp., 400 F.3d 1227, 1232 (10th Cir. 2004). Admission of expert testimony is governed by Rule 702, which provides:
If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of an opinion or otherwise, if (1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case.
Fed. R. Evid. 702. The proponent of the expert testimony bears the burden of proving the foundational requirements of Rule 702 by a preponderance of the evidence. United States v. Nacchio, 555 F.3d 1234, 1241 (10th Cir. 2009) (en banc).
To qualify as an expert, the witness must possess such “knowledge, skill, experience, training, or education” in the particular field as to make it appear that his or her opinion would rest on a substantial foundation and would tend to aid the trier of fact in its search for the truth. LifeWise Master Funding v. Telebank, 374 F.3d 917, 928 (10th Cir. 2004). To establish that the proffered testimony is reliable, the proponent must show that the reasoning or methodology underlying the testimony is valid and is properly applied to the facts in issue. See Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 592-94 (1993). While an expert witness’s testimony must assist the jury to be deemed admissible, Fed.R.Evid. 702(a), it may not usurp the jury’s fact-finding function. Specht v. Jensen, 853 F.2d 805, 808 (10th Cir. 1988).
Ultimately, “the rejection of expert testimony is the exception rather than the rule.” Fed.R.Evid. 702 advisory committee’s note. “[T]he trial court’s role as gatekeeper is not intended to serve as a replacement for the adversary system. . . . 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.” Id.
Defendant first argues that Karraker’s opinions are excludable because they are irrelevant to Plaintiff’s sole remaining claim. (ECF No. 110 at 6-9.) Defendant relies on the Court’s Summary Judgment Order (ECF No. 109), arguing that only the three factual disputes identified in the Order remain for trial. Based on this position, Defendant contends that Karraker’s opinion is not helpful to the jury because Karraker opines as to damages resulting from all of Plaintiff’s allegations, not solely the damages resulting from the three factual bases discussed in the Summary Judgment Order. (ECF No. 110 at 6-9.)
In the conclusion of the Summary Judgment Order, the Court “DENIED [summary judgment] as to Plaintiff’s claims for breach of the covenant of good faith and fair dealing as described in detail above.” (ECF No. 109 at 24.) The Court’s “above” discussion of Plaintiff’s claim for breach of good faith and fair dealing began by noting that Plaintiff’s opposition brief was imprecise and lacked evidentiary citations, and “[m]ost of Plaintiff’s allegations are so vague that the Court cannot possibly link them with certainty to evidence in the record. The Court has nonetheless tried to divine the basis for Plaintiff’s claims from the evidence before it.” (Id. at 8 n.4.) Based on its review of the evidence presented in the briefing on Defendant’s Motion for Summary Judgment, the Court identified four factual bases for Plaintiff’s claim that were supported by evidence in the record. (Id. at 8-16.) The Court concluded that, as to three of the four, there were material factual disputes about Defendant’s actions and their timing and motivation that prevented summary judgment. (Id.) As to Plaintiff’s allegation that Drs. Kutalek and Blumberg should have been added to its territory, however, the Court found no material factual dispute because these doctors were explicitly excluded from Plaintiff’s territory under the Agreement between the parties, and it was undisputed that the Agreement was never properly amended in writing. (Id. at 12-14.) As such, the Court granted summary judgment solely on the portion of Plaintiff’s good faith and fair dealing claim that relied on Defendant’s failure to add Drs. Kutalek and Blumberg to its territory. (Id. at 14.)
Given the above recitation, Defendant’s reading of the Summary Judgment Order does not comport with the legal standard for summary judgment or with the language of the Order itself. Summary judgment is appropriate only if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). Finding no issue of material fact as to the portion of the claim based on Drs. Kutalek and Blumberg, the Court granted summary judgment on that portion and denied it as to the remainder of the claim. (ECF No. 109.) Plaintiff’s failure to present additional evidence of other factual disputes in the briefing on summary judgment might have been a poor strategic decision, but Plaintiff did not as a consequence waive its right to present such evidence in support of that claim at trial. As such, the Court concludes that Plaintiff is not limited to presenting evidence on the three factual disputes discussed in the Summary Judgment Order, and may litigate its remaining claim in full, with the exception of the portion relying on Drs. Kutalek and Blumberg.
Given the scope of Plaintiff’s remaining claim, the Court now considers Defendant’s argument that Karraker’s opinions are unhelpful to the jury because they are based on allegations that are no longer relevant to the remaining claim. Karraker’s Report calculates Plaintiff’s losses resulting from Defendant’s actions, and states that the following actions were considered:
Specific Sorin interference includes:
a. Dr. Kutalek was not added back to Bio Med accounts when Denny ...