Opinion
NO. 217-2010-CV-166
03-28-2012
John B. Eames, et al. v. Joel J. Bedor, et al.
ORDER
This case is an equitable action seeking an accounting and money damages brought by the limited partners of the former Mount Washington Hotel Limited Partnership ("MWP"). Petitioners, John Eames and the other limited partners, claim Respondents, Joel Bedor and Wayne Presby, breached their fiduciary duties as limited partners by self dealing, converting and diverting partnership assets, and otherwise mismanaging and wasting partnership funds. Respondents brought a counterclaim for defamation. Respondents request a jury trial. Each party has brought several motions in limine and other trial-related motions. For the reasons stated, the parties are not entitled to a jury trial. All other motions are granted or denied consistent with the analysis herein.
I
The facts underlying this action have been set forth in prior orders and need not be repeated. See Order (July 19, 2010); Order (Nov. 5, 2008). Respondents seek a jury trial. Whether they are entitled to a jury trial depends primarily on the nature of the claims against them. Petitioners brought their action in nine Counts. Examination of the claims leads inexorably to the conclusion that none should be tried to a jury.
Petitioners' legal claims include Counts III, V, and VI. Count III alleges a breach of the Partnership agreement, which is essentially a breach of contract claim. Count VI alleges a breach of the duty of good faith and fair dealing. This Count is a derivative action to the breach of contract claim, as the fiduciary duty of good faith and fair dealing is implied in all contracts in New Hampshire. Tessier v. Rockefeller, 162 N.H. 324, 338 (2011).
Although these Counts assert legal claims, they are the types of claims that cannot be maintained between partners in a partnership before the partnership has been dissolved and an accounting has been done. 2 ALAN R. BROMBERG & LARRY E. RIBSTEIN, BROMBERG & RIBSTEIN ON PARTNERSHIP § 6.08(c) (2007) ("BROMBERG ON PARTNERSHIP"). As explained in the July 2010 Order, prior to an accounting, the partners cannot maintain any legal claims against one another or the partnership. What was implicit in the July 2010 Order—but is significant for the determination of Respondents' right to a jury trial—is the exclusivity issue relating to Petitioners' motion for an accounting.
Courts have traditionally viewed an accounting as the exclusive remedy between partners. Id. The action arises out of the partners' fiduciary duty to provide information. Id. An accounting gives the partners an explanation of their rights and obligations among one another. 2 BROMBERG ON PARTNERSHIP § 6.08(d). If partnership assets have been mismanaged, wasted, diverted, or converted, that too becomes apparent during the accounting. Thus, courts often deny partners the right to bring claims, of any kind—but especially for damages—against the partnership or other partners without first bringing an action for a formal accounting.
Count V alleges waste of partnership assets. Depending on the context, a cause of action for waste has been characterized as equitable and legal. 78 AM. JUR. 2D Waste § 27 (2012). However, it is a claim that will be resolved indirectly by the accounting action. Therefore, it cannot be maintained between partners before the accounting. Like a breach of contract or any legal claim, it is subordinate to the equitable nature of the accounting that is required to commence this case.
A petition for an accounting is itself an equitable remedy. J. WILLIAM CALLISON & MAUREEN A. SULLIVAN, PARTNERSHIP LAW & PRACTICE § 13:1 (2011). This is the heart of the case. In addition to the basis for an accounting stemming from partners' fiduciary duties to one another, Petitioners also brought Counts I, II, and VIII, which allege two breaches of fiduciary duty and self dealing, respectively. However, all these claims essentially state the same theory: Respondents breached their duties to the limited partnership in their dealings with the COG, and they did so in a manner that benefitted themselves by transferring assets from the limited partnership to the COG.
A breach of fiduciary duty cause of action has historically been viewed as an equitable action, even when the remedy sought is damages. Ed Peters Jewelry Co., Inc. v. C & J Jewelry Co., Inc., 215 F.3d 182, 186 (1st Cir. 2000); In re Evangelist, 760 F.2d 27, 29 (1st Cir. 1985). Additionally, Petitioners' self dealing claim is no different than their breach of fiduciary duty claims because one way to breach a fiduciary obligation is to self-deal. Thus, Counts I, II, and VIII are equitable in nature, and neither party is entitled to a jury trial on these claims.
Petitioners also brought claims for conversion, unjust enrichment—only as to the COG—, and for attorney's fees under the partnership agreement and common law; Counts IV, VII, and IX, respectively. None of these claims give either party a right to a jury trial because both unjust enrichment and conversion sound in equity. Interstate Litho Corp. v. Brown, 255 F.3d 19, 30 (1st Cir. 2001); In re Haller, 150 N.H. 427, 430 (2003); Scullian v. Finley, 210 A.2d 646, 647 (R.I. 1965). Respondents argue that they are entitled to a jury trial on the unjust enrichment claim against the COG because the COG is not a partner and need not be joined in the resolution of the accounting like the former partners that are defending this action in their individual capacity. The Court disagrees.
Petitioners' unjust enrichment claim seeks restitution. In describing the actions that give rise to Petitioners' claims, they state that Respondents' actions include "the diversion of assets—including revenue and other resources such as tools and equipment, use of tools and equipment for a period of time, and the assignment of services by employees—from the Resort to the Cog railway, or to its benefit." Writ ¶ 36. By objecting to the diversion of assets and citing the assets transferred to Respondents, Petitioners assert a classic restitution claim based on unjust enrichment. R. Zoppo Co., Inc. v. City of Manchester, 122 N.H. 1109, 1113 (1982). The claim sounds in equity.
Count IX, seeking attorney's fees and costs, simply requests a particular remedy based on two theories: the partnership agreement and the inherent power of the court to award attorneys' fees under Harkeem v. Adams 117 N.H. 687 (1977) and its progeny. To the extent it seeks a contract right, it is merged into the claim for an accounting. To the extent is seeks to invoke the inherent power of the Court, Petitioners' request for attorney's fees is not an independent. It cannot give rise to a right to a jury trial.
The fact that petitioners seek money damages does not compel a jury trial. Al- though courts often look to the remedy sought when determining whether a cause of action sounds in equity, the remedy sought is only part of the analysis. Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 41-43 (1989). The other part of the analysis considers whether the rights to be enforced are analogous to common-law causes of action ordinarily decided in English law courts in the late 18th century. Id. at 41. Thus, the Petitioners' request for damages, in addition to an accounting, does not remove this case from equity. The New Hampshire Supreme Court has allowed monetary awards in equitable actions. See, e.g., Martinez v. Nicholson, 154 N.H. 397, 398-99 (2006); see also, e.g., Am. Bd. of Trade, Inc. v. Dun & Bradstreet, Inc., 122 N.H. 344, 347 (1982) (allowing equitable claim seeking monetary damages).
II
Respondents further assert their right for a jury trial based on their counterclaim. A claim for defamation sounds in tort and would ordinarily be entitled to a jury trial. See FUD's, Inc. v. State, 727 A.2d 692, 697 (R.I. 1999) (comparing sex discrimination cause of action to other tort actions afforded jury trial rights). Nonetheless, the New Hampshire Supreme Court has held that a party can waive his or her right to a jury trial by implication, and Respondents have done so here. See Lowell v. U.S. Sav. Bank, 132 N.H. 719, 724 (1990).
The majority of courts hold that in the absence of any statute or rule of procedure to the contrary, a defendant who brings a legal counterclaim in an equitable action has no right to a jury trial. B. C. Ricketts, Annotation, Right in Equity Suit to Jury Trial of Counterclaim Involving Legal Issue, 17 A.L.R. 3d 1321 § 3a (1968). The majority rule denies a defendant the right to a jury trial for cases sounding in equity when counter- claims are legal in nature. The rationales may vary slightly, but can be summarized as follows: (1) when a court takes jurisdiction of an action in equity, it has full authority to hear and decide all issues both equitable and legal that may be raised; (2) a plaintiff who voluntarily goes to equity court understands he or she waives the right to a jury trial on all claims; and (3) a defendant who asserts a legal counterclaim rather than asserting it in a separate action at law has waived his right to have the issues of fact thus raised tried to a jury. Id. § 2a.
Although the New Hampshire Supreme Court has never specifically decided this issue New Hampshire courts exercise their equity jurisdiction in conformance with the first rationale discussed above. Moreover, unlike many courts, New Hampshire permits civil defendants to waive their jury trial right by implication. Lowell, 132 N.H. at 724. New Hampshire courts utilize the federal rule for compulsory counterclaims. Meier v. Town of Littleton, 154 N.H. 340, 343 (2006); E. Marine Constr. Corp. v. First S. Leasing, Ltd., 129 N.H. 270, 275-76 (1987). Lastly, New Hampshire courts seek to achieve efficiency, and the New Hampshire Supreme Court has held that conflicting claims flowing from a common source should be determined in a single action. See Boucher v. Bailey, 117 N.H. 590, 592 (1977). Thus, it appears that New Hampshire follows the majority rule that joining a legal with an equitable claim does not give the parties a right to a jury trial. See In re Evangelist, 760 F.2d 27, 28 (1st Cir. 1985).
The Court assumes without deciding that defamation would be considered a compulsory counterclaim in this case because the Petitioners' absolute defense is truth, and that theory requires an analysis of all facts underlying the causes of action brought in equity.
In sum, despite Respondents' jury trial demand, this Court has already ruled that the gravamen of Petitioners' claims is equitable in nature. As detailed above, the other claims brought by Petitioners characterized as legal are equitable in nature. The parties have been aware of this ruling for well over a year. The accounting action, which is equitable in nature, must be resolved before parties may bring legal actions against one another. And, in any event, the accounting will likely resolve all legal claims. Thus, all claims that arise in equity may be tried with the accounting action in equity, and none of the parties are entitled to a jury trial.
III
Respondents have filed several motions in anticipation of trial. Two of the motions petition the Court to appoint a commissioner to take videotaped trial depositions. The remainder of Respondents' motions seeks to exclude evidence from trial. Petitioners object to all of Respondents' motions. The Court addresses the motions in turn.
Respondents petition the Court to appoint a commissioner under RSA 517:15 to take videotaped trial depositions of Baxter Underwood and Charles Adams per Superior Court Rule 45. Respondents argue that Mr. Underwood's testimony is relevant because the Petitioners' expert, Dr. Thomas Barocci, relied on information learned from Mr. Underwood to form his expert opinion. Respondents argue that Mr. Adams's testimony is relevant because he was involved in purchasing the Mount Washington Hotel ("MWH"). Petitioners object and argue that Respondents' request is untimely and prejudicial. Petitioners note that Respondents previously deposed Mr. Underwood for six hours. Furthermore, Petitioners assert that Respondents previously agreed to forego deposing Mr. Adams.
"The Court, within its discretion, may allow the use of [videotaped] depositions that have been taken by agreement; and provided further that, if the parties cannot reach such an agreement, the Court may, in its discretion, order the taking and/or use of such depositions." Super. Ct. R. 45. A party does not have the right to take a videotaped trial deposition; instead, the decision whether to order a trial deposition falls within a court's discretionary powers to manage discovery and determine the admissibility of evidence. See Bronson v. Hitchcock Clinic, 140 N.H. 798, 809 (1996). If the person to be deposed resides outside of the state, the superior court may, upon petition, "appoint some suitable person as commissioner to take depositions outside th[e] state, for use in causes pending in or returnable to [the] court." RSA 517:15.
Respondents are entitled to take the videotaped depositions of Mr. Underwood and Mr. Adams. Petitioners are not prejudiced for three reasons. First, the depositions are for use at trial; they are not discovery depositions. Second, if the witnesses were within the state, Respondents would be able to subpoena them to testify at trial. Finally, there is no evidence that Petitioners cannot allocate the resources necessary to take the trial depositions. Therefore, Respondents' petitions to appoint a commissioner and take videotaped depositions are GRANTED. Further, Respondents' proposed orders are likewise GRANTED.
However, as noted infra, Dr. Barocci will not be permitted to testify as to what he was told by Mr. Underwood to support his opinion—even if he is allowed to testify—because there is no showing that Mr. Underwood's testimony would be generally relied upon by an expert in his field.
The Business Court Standing Orders, like the federal rules allow for one deposition of 7.5 hours for each witness. Apparently the parties have agreed to treat Mr. Underwood as they would a witness amenable to the subpoena power of this court.
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IV
Respondents' eight evidentiary motions in limine seek to exclude evidence at trial. Respondents' first two motions in limine seek to exclude certain opinions offered by Petitioners' experts, Dr. Thomas Barocci and Attorney Richard Uchida. Dr. Barocci opines on the damages that resulted from Respondents' alleged breaches of fiduciary duties. Attorney Uchida's opinions relate to the duties owed by attorneys to their clients as well as duties owed among partners.
The reliability of expert testimony in New Hampshire is governed by Rule of Evidence 702 and RSA 516:29-a. Under Rule 702, "[i]f 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." RSA 516:29-a, I provides, "[a] witness may not offer expert testimony unless the court finds: (a) [s]uch testimony is based upon sufficient facts or data; (b) [s]uch testimony is the product of reliable principles and methods; and (c) [t]he witness has applied the principles and methods reliably to the facts of the case."
The inquiry envisioned by the rules governing expert testimony is a flexible one. Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 594 (1993). "The focus . . . must be solely on principles and methodology, not on the conclusions that they generate." Id. at 595. In determining reliability, the court generally looks to the four "Daubert factors": "(1) whether a theory or technique can be (and has been) tested; (2) whether the theory or technique has been subjected to peer review; (3) the known or potential rate of error of a particular technique; and (4) the Frye general acceptance test." Baker Valley Lumber, Inc. v. Ingersoll-Rand Co., 148 N.H. 609, 614 (2002) (quotations and ellipsis omitted); see also RSA 516:29-a, II. The party offering the expert testimony bears the burden of proving its relevance and reliability. State v. Newman, 148 N.H. 287, 291 (2002).
The Court begins by examining Attorney Uchida's opinions. Attorney Uchida will testify to: (1) the fiduciary duty owed by an attorney to his client and whether Mr. Presby breached that duty to the Petitioners; and (2) the duty owed among partners in a partnership and whether Respondents, Mr. Presby and Mr. Bedor, breached that duty. Respondents argue that both opinions must be excluded. They maintain that opinions related to an attorney's duty are irrelevant because no attorney-client relationship existed in this case. They assert that even if it did, the duties ran to the MWHLP, not the Respondents. Moreover, they assert that Attorney Uchida's testimony on the duty owed among partners merely "parrots" RSA 293-A8.31 and is, therefore, inadmissible. The Court agrees with Respondents.
Attorney Uchida is a capable and competent expert. However, his opinion that Mr. Presby breached a fiduciary obligation as an attorney is irrelevant to the present case. Relevant evidence means "evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence." N.H. R. Evid. 401. In order to determine what is "of consequence," the Court must examine Petitioners' writ. Even assuming that an attorney-client relationship existed between Mr. Presby and the Petitioners, Petitioners have not alleged a cause of action based upon that relationship. Their writ does not contain either a legal malpractice claim or a separate action for breach of a fiduciary obligation as an attorney. As a result, testimony pertaining to whether Mr. Presby breached his fiduciary duty as an attorney is irrelevant to this action and, therefore, inadmissible. See N.H. R. Evid. 402.
Attorney Uchida's second opinion is likewise inadmissible because it merely parrots the standard set forth under RSA 293-A:8.31. Expert testimony is only relevant to the extent that it assists the trier of fact in making its determination. See N.H. R. Evid. 702. "Proffered expert testimony generally will not help the trier of fact when it offers nothing more than what lawyers for the parties can argue in closing arguments." Pepin v. PC Connection, Inc., Merrimack Superior Court, No. 08-C-470, at 4 (June 14, 2010) (Order, McNamara, J.). RSA 293-A:8.31 defines a director's conflicts of interest as well as the exceptions to the rule. Attorney Uchida opines that the Respondents were governed by RSA 293-A:8.31. Respondents do not contest that the statute governed their conduct. The remainder of Attorney Uchida's opinion applies the facts of the case to the statutorily defined duty. Such an opinion merely seeks to bolster an argument Petitioners' attorney can make in closing. This is not a case where a court requires an expert to explain foreign law to it as an issue of fact. Cf. U.S. v. Pre-Columbian Artifacts, 845 F.Supp. 544, 546 (N.D. Ill. 1993). Attorney Uchida's opinion does not assist the trier of fact and is therefore inadmissible. It follows that Respondents' motion in limine number two is GRANTED.
Dr. Barocci's opinion is a closer case. Dr. Barocci's ultimate conclusion is that because of the Respondents' commingled assets, the price that the MWHLP received when it sold the MWH was lower than it otherwise would have been. He opines that the three contributory factors are as follows: (1) the management's diversion of resources from the Resort for the benefit of the Cog; (2) the failure of management to clearly and fully document and account for transactions with the Cog; and (3) the resulting uncertainty surrounding the appropriateness of operational and accounting practices reflective of the managerial authority. Resp'ts' Mot. in Limine One, at Ex. 1. Dr. Barocci attempts to quantify the factors in four ways: (1) calculating the amounts of shareholder resources that were diverted from the Resort to the Cog; (2) calculating the effect of the diverted resources on the Earnings Before Interest, Taxation, Depreciation, and Amortization ("EBITDA"); (3) evaluating the qualitative impact the uncertainty regarding operations and accounting had on the offering price, as reflected in the EBITDA multiple; and (4) adjusting factors 1, 2, and 3 for the purchasing power of the losses to the date Petitioners' filed the claim. Id.
Although Respondents challenge Dr. Barocci's opinion in its entirety, the Court is most troubled by his calculation of the third factor: the qualitative impact of uncertainty. In reaching his conclusion under this factor, Dr. Barocci relies in part on the testimony of Mr. Underwood, who directly participated in the negotiations with the MWHLP. Ultimately, Dr. Barocci reaches the conclusion that:
[T]he impact on the purchase price of the uncertainty created by the lack of documentation and/or disclosure of how resources were shared between the Resort and the Cog and actual diversion of funds from the Resort to the Cog is material and significant. At the lowest level, assuming the buyers saw the risk marginally and important and used a discount rate 1% higher because of it, it would have changed the purchase price by $1.56 million. More likely than not, the discount rate was raised between 2 and 3 percentage points, which would yield a change in the offering price in the range of $3.18 million to $4.88 million.Id. Dr. Barocci also provides, "Offering an opinion on the exact amount would require knowing what was in the buyers['] minds and models regarding the level of risk they attributed to the increased uncertainty of the deal." Id. Further, he admits that his calculations are "not science," but instead are "an investor specific risk." Id.
Respondents argue that Dr. Barocci's testimony is purely speculative and merely parrots Mr. Underwood's deposition. The Court is inclined to agree for the same reasons that the Court excluded Attorney Uchida's opinion on partnership duties, supra. Furthermore, Petitioners have not put forth any evidence demonstrating whether Dr. Barocci's method for determining the "uncertainty" can be or has been tested. However, the Court need not make its determination at this time. "The gatekeeping function of the court is relaxed where a bench trial is to be conducted . . . because the court is better equipped than a jury to weigh the probative value of expert evidence." Traxys N. Am., LLC v. Concept Mining, Inc., 808 F. Supp. 2d 851 (W.D. Va. 2011). "[W]here the factfinder and the gatekeeper are the same, the court does not err in admitting the evidence subject to the ability later to exclude it or disregard it if it turns out not to meet the standard of reliability established by Rule 702." In re Salem, 465 F.3d 767, 777 (7th Cir. 2006); see also United States v. Brown, 415 F.3d 1257, 1269 (11th Cir. 2005). Because this case will be tried without a jury, see supra, the Court will defer its ruling until after Dr. Barocci testifies. However, even if he can establish that an expert in his field would rely on what he learned from Mr. Underwood in a post deposition telephone conversation—a proposition that seems dubious at best—what he learned from Mr. Underwood will not be admitted for the truth of the matter, as it is pure hearsay. N.H. R. Evid. 801.
The arguments set forth in Respondents' motions in limine three and six are interrelated and are considered together. Respondents seek to exclude the testimony of former MWHLP employees regarding the amount of time they spent working for the Cog. Respondents argue that the employees' estimates are inadmissible because they are speculative. In turn, Respondents seek to exclude opinions offered by Petitioners' expert, Drew Landry, because he relied on the employees' estimations. The Court cannot rule on Respondents' motions until the evidence is presented at trial and, as a result, defers a ruling until that time.
The former employees provide testimony related to the time spent working between the Cog and the MWHLP. Petitioners utilize the employees' testimony for two purposes: first, to prove that Respondents established a system whereby they would not keep track of the time spent by employees working at the Cog; and second, as the basis of Petitioners' damages expert, who will discuss the amount of money lost by the MWHLP. At their depositions, the employees provided estimations ranging from 10 to 40 percent. These estimates relate to employee work schedules from 2001 and 2006, between 6 and 11 years ago. The employees acknowledge that the percentages proffered are estimates only.
"A witness may not testify to a matter unless evidence is introduced sufficient to support a finding that the witness has personal knowledge of the matter." N.H. R. Evid. 602. In other words, testimony may not be the product of speculation. With this rule in mind, a lay witness's "testimony in the form of opinions or inferences is limited to those opinions or inferences [that] are (a) rationally based on the perception of the witness, and (b) helpful to a clear understanding of the testimony or the determination of a fact in issue." N.H. R. Evid. 701. At times, the line between speculation and lay opinion is thin and depends upon the testimony presented at trial. This is such a case. Following the employees' testimony, the Court will rule on its admissibility and, in turn, the admissibility of Mr. Landry's expert opinions.
Respondents' motion in limine number four seeks to prevent all witnesses from using the phrases, "diversion of assets," "breach of fiduciary duty," "diversion of funds," and "commingling of funds." Respondents argue that it is the jury's function to determine whether or not they commingled assets and breached fiduciary their fiduciary duties. However, the present case will not be tried to a jury. As a result, the Court does not find it necessary to prohibit witnesses from using such language. If the evidence does not support a witness's rhetoric, capable opposing counsel may argue that point to the trier of fact in closing argument. Motion in limine four is DENIED.
Respondents' motion in limine number five seeks to preclude any mention of a bonus Mr. Presby received in 2006 or a partnership interest granted to Charles Kenison, a general manager for the Cog. Respondents maintain that the decisions to award the bonus and the partnership interest are governed by the "business judgment rule." See Baldwin v. Bader, 585 F.3d 18, 22 (1st Cir. 2009). The Court finds that even if Respondents are correct, Petitioners dispute whether or not Respondents properly exercised their "business judgment." Because the parties dispute material facts, Respondents' motion in limine number five is DENIED.
Respondents' motion in limine number seven seeks to exclude any evidence of damages occurring before October 25, 2004 as barred by statute of limitations. Respondents maintain that because the action commenced on October 25, 2007, any mention of conduct prior to October 25, 2004 violates the three year statute of limitations under RSA 508:4, I. Petitioners object and assert that they are entitled to present evidence of Respondents' conduct as far back as the year 2000 because the doctrines of "fraudulent concealment" and "the discovery rule" tolled the limitations period.
The statute of limitations is an affirmative defense, and Respondents must prove that it applies in the first instance. Glines v. Bruk, 140 N.H. 180, 181 (1995). "That burden, however, is met by a showing that the action was not brought within [three] years of the act or omission complained of." Beane v. Dana S. Beane & Co., 160 N.H. 708, 712 (2010) (quotations omitted). Once a party satisfies his initial burden, the burden shifts to the opposing party to set forth and prove that the statute of limitations was tolled. See id. at 713.
Here, Respondents have satisfied their initial burden by establishing that any conduct alleged by Petitioners before October 25, 2004 falls outside the three year statute of limitations. Thus, the burden shifts to the Petitioners to show that the statute of limitations was tolled.
In order to satisfy their burden, Petitioners assert that the discovery rule and fraudulent concealment doctrines tolled the statute of limitations period. "The statutory discovery rule is designed to provide relief in situations where the plaintiff is unaware of either his injury or that the injury was caused by a wrongful act or omission." Id. The fraudulent concealment doctrine is an equitable ground to justify tolling the statute of limitations based on a respondent's wrongful conduct. Conrad v. Hazen, 140 N.H. 249, 253 (1995). Because of the equitable nature of the tolling doctrines, courts are vested with the power to decide a statute of limitations question at a preliminary hearing before trial. Keshishian v. CMC Radiologists, 142 N.H. 168, 180 (1997). When the parties dispute material facts, a court must hold an evidentiary hearing to resolve the dispute. See id. at 179-80. Here, the parties dispute facts central to this Court's determination of whether the fraudulent concealment and discovery rule doctrines tolled the statute of limitations. Because the Court sits as the trier of fact in this case, the Court will decide the statute of limitations issue upon the evidence submitted at trial, instead of at a preliminary hearing before trial. However, if the parties feel that a preliminary hearing to decide the statute of limitations will simplify the case, they may request that the Court hold such a hearing.
In their final motion in limine (number eight), Respondents argue that if Petitioners insist on a judicial accounting of the transactions between the Cog and the Resort and prove that they are entitled to it, then the accounting must necessarily be completed before Petitioners can proceed with any claim for money damages. The Court disagrees. In a previous Order, this Court held that the "equitable claim for a partnership accounting is properly before [it] as an equity action." Eames v. Bedor, Merrimack Superior Court, No. 10-CV-166, at 5-6 (July 19, 2010) (Order, McNamara, J.). The Court rejected Respondents' argument that Petitioners could not bring the case until after a judicial accounting had occurred. Id. at 3. Because the Court previously ruled on this issue and sees no reason to revisit its analysis, Respondents' motion in limine number eight is DENIED.
In summary, the Court GRANTS Respondents' petitions to appoint commissioners to take the videotaped trial depositions of Mr. Underwood and Mr. Adams. The Court also GRANTS Respondents' motion in limine number two. The Court DENIES Respondents' motions in limine numbers four, five, and eight. Finally, the Court DEFERS its rulings on motions in limine numbers three, six, and seven.
V
Petitioners also have brought a number of motions in limine. Petitioners' first motion seeks to exclude documents bearing the Bates numbers 001-525. The docu- ments are Resort payroll records that Respondents retrieved from servers at the Resort. These documents were electronically stored at the Resort, which is now in control of the OMNI, a third party to this case. There is no reason Petitioners could not have obtained these documents themselves. They were equally available to both parties. As such, Petitioners' motion in limine to exclude these documents is DENIED.
Petitioners' second motion seeks to exclude the testimony of Respondents' expert, Frank R. Zito, and related documents. The basis for and history of this motion warrant some discussion. At the beginning of this case, Petitioners, through their first counsel, Upton & Hatfield, propounded several interrogatory requests upon Respondents. Part of the requests sought financial transactions flowing between the COG and the Resort, dating back to 1991. Respondents objected to this request as burdensome and irrelevant. However, Respondents made undisputed documents available for Petitioners to inspect. Petitioners never inspected the uncontested documentation or demanded the documents to which Respondents objected. Rather, two years later, Petitioners, through their third counsel, discussed the original interrogatory with Respondents. Following this discussion, Petitioners voluntarily limited their request to financial transactions between the COG and the Resort for the years 2002 to 2006.
Eventually, Respondents decided to use a number of transactions and other financial information from the time period before 2002. Frank Zito, Respondents' expert, in fact, relies on many documents from this earlier time period. However, all of the documents Zito relied on were disclosed along with Zito's expert report.
Petitioners now challenge Respondents' representations regarding the originally-requested documents. Specifically, Petitioners claim Respondents cannot use the documents relied on by Zito because Respondents have not disclosed the entire universe of financial documents from 1991 until 2002, and Petitioners cannot contradict Respondents' expert without all of the documents. However, Petitioners have never taken a Rule 30(b)(6) deposition, and they voluntarily limited their request for documents. In addition, Respondents represented that many of the documents on which Zito relied did not involve transactions between the COG and the resort, so Petitioners would not have received the information they now seek even if they had obtained all documents between 1991 and 2002; documents Petitioners now claim Respondents withheld. Thus, with respect to the pre-2002 documents Petitioners seek to exclude, their motion in limine is DENIED.
Moreover, as discussed above, much of the information relied on by Zito is salary information. Depending on the outcome of the statute of limitations hearing, much of this information may be come irrelevant. For example, Mr. Bedor expressed uncertainty about where his paychecks came from at his deposition. Thus, if Respondents cannot prove that by failing to accept a raise, Mr. Bedor benefitted the Resort, then Mr. Bedor's salary information will be excluded.
As part of their second motion in limine, Petitioners seek to exclude any reference by Zito regarding the credibility of witnesses. To the extent Zito discusses what formed the basis for his opinion—for example, that Zito did not rely on witnesses because he thought their memories were unreliable—this testimony is admissible because it is not credibility evidence. To the extent Zito purports to testify about the credibility of a witness, this testimony is excluded, and Petitioners' second motion in limine is GRANTED in part and DENIED in part, consistent with the above analysis. In addition, the Court DEFERS ruling on the admissibility of salary information, pending the outcome of the statute of limitations hearing.
Petitioners' third motion in limine seeks to exclude recently produced documents. Apparently, Mr. Presby found several boxes of documents in his attic sometime between November and December of 2011. Respondents then disclosed these documents to the Petitioners at the end of February 2012. Because these documents were in Respondents' possession but not produced until long after the close of discovery and immediately before trial, they will be excluded. Petitioners' motion is GRANTED.
Petitioners' fourth motion seeks to use the videotape deposition of Byron Carlock. This motion is GRANTED as unopposed. See Super. Ct. R. 45. The videotape may be shown, and neither party is required to use the entire deposition.
As a final matter, given the nature of this action, the Court reminds the parties of Business Court Standing Order No. 10, which provides,
Any party may, at its own expense, use a certified stenographic reporter in order to obtain a Real-time transcript. If a party obtains such a stenographer, access to Real-time must be provided for the Court. However, the official record of the proceeding shall be the record taken by the courtroom monitor.SO ORDERED.
___________________________
Richard B. McNamara,
Presiding Justice