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Ramos v. Banner Health

United States District Court, D. Colorado

December 26, 2019

LORRAINE M. RAMOS, et al., Plaintiffs,
BANNER HEALTH, et al., Defendants.



         Plaintiffs Lorraine M. Ramos and others (“Plaintiffs”) bring this lawsuit against Banner Health and certain current and former employees (together “Banner Defendants”) and Jeffrey Slocum & Associates, Inc. (“Slocum”) (collectively, “Defendants”) alleging breach of fiduciary duties under the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1101, et seq.

         Currently before the Court is Slocum's Motion In Limine to Exclude Irrelevant Evidence Concerning Unrelated SEC Order (“Slocum's MIL”) and Plaintiffs' Motion In Limine To Preclude Banner From Calling Michael Frick as a Trial Witness (“Plaintiffs' MIL”). (ECF Nos. 398 & 398.) For the reasons explained below, Slocum's MIL is granted and Plaintiffs' MIL is denied.

         I. ANALYSIS

         A motion in limine allows a court to decide evidentiary issues in advance of trial to avoid delay and ensure “an evenhanded and expeditious trial.” Dry Clean Super Ctr., Inc. v. Kwik Indus., Inc., 2012 WL 503510, at *4 (D. Colo. Feb. 15, 2012).

         A. Slocum's MIL (ECF No. 398)

         Slocum moves to exclude a February 8, 2017 Securities and Exchange Commission (“SEC”) Order imposing remedial sanctions on Slocum and its founder. (ECF No. 398 at 1-2.) The SEC Order concerns misleading statements in Slocum's marketing materials between 2011 and 2014 about, as relevant here, its gift policy. (Id.; ECF No. 398-1 at 3.)

         Under Federal Rule of Evidence 401, “[e]vidence is relevant if: (a) it has any tendency to make a fact more or less probable than it would be without the evidence; and (b) the fact is of consequence in determining the action.” Fed.R.Evid. 401. While relevant evidence is generally admissible at trial, it “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 undue delay, waste of time, or needless presentation of cumulative evidence.” Fed.R.Evid. 403.

         Plaintiff makes two arguments about the relevance of the SEC Order. First, Plaintiffs contends that Banner and Slocum both accepted gifts by “regularly attending Fidelity purchased dinners and outings to major sporting events, ” and that these relationships caused “substantial harm to the Plan” by causing Banner and Slocum to maintain the status quo Plan fees and to retain underperforming investment funds. (ECF No. 402 at 3.) Although Plaintiffs allege that Banner engaged in this wrongful conduct, there is no apparent connection between Banner's alleged conduct and the SEC Order. Second, Plaintiffs argue that Slocum made misleading statements to Banner about its gift policy, and those same statements are the subject of the SEC Order. Plaintiffs posit that had Banner properly performed its due diligence when looking to renew its contract with Slocum in 2014, it should have discovered the conduct described in the SEC Order. (Id. at 2; ECF No. 372 at 4.)

         Plaintiffs relevancy arguments are thin. The Court is not convinced that the SEC Order makes it “more or less probable” that Slocum engaged in “tainted behavior” by accepting gifts from Fidelity. See Fed. R. Evid. 401(a). Moreover, the Court is hard-pressed to see how a 2017 SEC Order about misleading marketing materials is evidence that Banner could have discovered Slocum's misleading statements with respect to their employees' acceptance of gifts of less than $100 or other gifts in violation of the company's written policy.

         Plaintiffs argue that excluding evidence under Rule 403 in a bench trial is improper because there is no risk of unfair prejudice. (ECF No. 402 at 4.) However, other Rule 403 concerns, such as wasting time and undue delay, are still proper considerations for the Court in a bench trial. “Although the Tenth Circuit has opined that excluding evidence in a bench trial under Rule 403 is improper as a general matter, the issues here remove this case from that general principle. Importantly, the general rule focus[es] primarily on the danger of unfair prejudice, whereas here, the main reason behind the [Defendant's] motion is that the evidence would waste time ‘without appreciable benefit.'” Union Pac. R.R. Co. v. Utah State Tax Comm'n, 2019 WL 5637100, at *3 (D. Utah Oct. 31, 2019). Here, introduction of the SEC Order would focus the parties on the issue of whether Slocum generally accepted gifts, rather than if Slocum employees accepted gifts from Fidelity and whether those gifts (if any) influenced their recommendations about the Plan. Moreover, Plaintiffs can easily elicit what Banner knew about Slocum and its gift policy when the parties signed the 2014 contract without relying on the SEC Order. Introduction of the SEC Order will only serve to waste time without appreciable benefit. The Court will thus grant Slocum's MIL and exclude the SEC Order under Rule 403.

         B. Plaintiffs' MIL (ECF No. 399)

         Plaintiffs move to bar Banner from calling Michael Frick as a witness on the grounds that Banner failed to disclose Frick in its Federal Rule of Civil Procedure 26 initial disclosures or supplemental disclosures (“Rule 26 disclosures”) as an individual Banner may use as a witness to support its defenses. Plaintiffs contend that because Banner's failure to disclose Frick as a witness was not “substantially justified” or “harmless, ” Frick should be prohibited from testifying at trial. See Fed R. Civ. P. 37(c)(1). In particular, Plaintiffs argue that allowing Banner to use Frick as a witness would prejudice Plaintiffs, who had “no opportunity to depose Mr. Frick.” (ECF No. 399 at 3.)

         “Rule 26(a)(1) disclosures are designed to accelerate the exchange of basic information and ‘help focus the discovery that is needed, and facilitate preparation for trial or settlement.'” Sender v. Mann, 225 F.R.D. 645, 650 (D. Colo. 2004) (quoting advisory comm. note to 1993 amendments to Fed.R.Civ.P. 26(a)). The Advisory Committee Notes on Rule 26 further instructs that ‚Äúlitigants ...

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