Opinion
Case No. 09-35789 Adv. No. 14-3106
04-06-2017
In re: D8 2010 Inc. f/k/a DOMIN-8 ENTERPRISES SOLUTIONS, INC., Debtor RICHARD D. NELSON, Plaintiff v. BRICKER & ECKLER LLP ET AL., Defendants
Copies to: Electronically Served Richard D. Nelson (Counsel for the Plaintiff) Donald E. Burton (Counsel for the Defendants) D. Jeffrey Ireland (Counsel for the Defendants)
Chapter 11
Memorandum Decision Denying Defendants' Motion to Strike the Expert Report of Robert Goering and to Exclude His Testimony
This matter is before the court on the Defendants' Motion to Strike the Expert Report of Robert Goering and to Exclude His Testimony. Plaintiff, Richard D. Nelson, the Chapter 7 Trustee, attached and relied upon Goering's report in making his summary judgment response and intends to use Goering as an expert witness at the trial to testify in support of his legal malpractice and breach of fiduciary duty claims. Goering is an attorney from Cincinnati, Ohio. For the reasons stated in this memorandum, the Motion is denied.
See Adv. doc. 59 (Exhibit B). References to the estate case's docket shall be to ("Est. doc. ___") and references to the adversary proceeding docket shall be to ("Adv. doc. ___").
I. Factual and Procedural Background
On September 17, 2009 Domin-8 Enterprise Solutions, Inc. and its former affiliates (collectively "Domin-8") filed voluntary Chapter 11 bankruptcy petitions. This adversary proceeding arises out of Domin-8's jointly administered bankruptcy cases. Domin-8 sought and obtained the approval of this court to employ Bricker & Eckler LLP ("Bricker & Eckler") as counsel to them as debtors-in-possession (Est. docs. 112 & 187), with David M. Whittaker ("Whittaker") serving as "lead counsel" for Domin-8 (Est. doc. 112) (collectively, "Bricker").
Domin-8 sought to sell substantially all of its assets under § 363 of the Bankruptcy Code (Est. docs. 19 & 69). After a vigorously contested sale process, the court approved the sale of Domin-8's assets to RealPage, Inc. under an Asset Purchase Agreement ("APA") for a cash purchase price of $14 million (the "Sale Proceeds") (Est. doc. 351). Following the consummation of the sale, Domin-8 proposed and the court confirmed the Third Amended Plan of Liquidation (Est. doc. 550) (the "Plan"). Confirmation Order (Est. doc. 555). The Plan was drafted by Bricker and provided for the liquidation of Domin-8's assets and the distribution of the Sale Proceeds through a liquidating trust (the "Liquidating Trust") established through the Liquidating Trust Agreement. Confirmation Order, ¶ 28 (Est. doc. 555) and Plan, Article V. The "Plan Trustee" was to take possession of and distribute the Sale Proceeds under the Plan and Liquidating Trust Agreement. Plan, Article V. At all relevant times, Tim Hock ("Hock") served as the Responsible Person for Domin-8 under Local Bankruptcy Rule 1074-1 until the Effective Date of the Plan and then upon the Effective Date of the Plan, became the Plan Trustee. Confirmation Order, ¶¶ 30 & 38 (Est. doc. 555). The Plan and the Liquidating Trust Agreement limit the Plan Trustee's and his employed professionals' liability to "acts or omissions resulting from willful misconduct or gross negligence." Plan, Article V § A. 2. e.; Liquidating Trust Agreement, Article IV § 4.4. The Confirmation Order approved the employment of Bricker & Eckler as the Plan Trustee's legal counsel. Confirmation Order at 15, ¶ H (Est. doc. 555).
See LBR 1074-1 (requiring an individual to act as the "responsible person" for corporate entities and partnerships).
Section 10.14 of the Liquidating Trust Agreement provided for the posting of a bond by the Plan Trustee. Specifically, that provision states:
10.14. Bond Required. The Plan Trustee (including any Successor Plan Trustee) shall be bonded in an amount at least equal to the value of the Assets of the Trust.Est. doc. 555 at 71. The evidence establishes that this bond requirement was included in the Liquidating Trust Agreement at the request of the United States Trustee. Specifically, MaryAnne Wilsbacher, an Assistant United States Trustee, in the process of the drafting and circulation of the Plan documents, insisted that the bond requirement be included in the Liquidating Trust Agreement. See Transcript of Deposition of David Michael Whittaker ("Whittaker Dep."), Adv. doc. 57 (Exhibit A at 28-29). The emails between Wilsbacher and Whittaker were as follows:
[Wilsbacher:] As I understand the Plan, it calls for a liquidating trust to be set up with an operating account of $300,000 (Plan p. 18). Tim Hock is the proposed Liquidation Trustee and is to be compensated at the rate of $ 75/hour (DST page 40). The Trust is to be governed by the agreement attached to the Plan as Exhibit 2 (page 42 of the Plan). Three issues: (1) We believe the Trustee should be bonded as being in the "best interest" of the estate (Plan, page 52 - ¶ 10.14). If this case were in Ch. 7, the Ch. 7 Trustee would be bonded and the bank account(s) collateralized. What protections do the creditors have without it? [Whittaker, David] This is OK as long as the cost can be paid from the operating reserve account and the amount paid in to the Operating Reserve Account can be increased to cover this expense. [Wilsbacher:] I'm OK with increasing the Operating Reserve for this.Defendants' Motion for Summary Judgment (the "Motion for Summary Judgment"), Adv. doc. 52 (Exhibit A-6 at 2, ¶ 5). In addition, the Plan provided for the Plan Trustee's "obtaining and paying the premiums for liability insurance and bond premium for the Plan Trustee." Plan, Art. V, A. 2. d. (22). See also § 3.1. w. of the Liquidating Trust Agreement providing for the Plan Trustee's payment of "the premiums for liability insurance and bond premium for the Plan Trustee[.]" Est. doc. 555 at 64.
On December 8, 2010 Whittaker sent an email to Hock suggesting the name of a bonding company which Hock could pursue to obtain the required bond. Hock responded to that email with the following email reply: "Thanks, been meaning to ask you about this." Defendants' Motion for Summary Judgment (the "Motion for Summary Judgment"), Adv. doc. 52 (Exhibit A, Decl. of David Whittaker ("Whittaker Declaration") at ¶14); Exhibit A-8; and Whittaker Dep. at 31:6-7. The Effective Date of the Plan, at which time the Liquidating Trust became effective, was December 22, 2010. See Est. doc. 570, ¶ 11 and Est. doc. 550 at 6, ¶ 41 and at 16, Art. V § A. 1. Whittaker did not communicate further with Hock about the bond until sometime in February 2011, at which time Hock sent Whittaker an email "indicating that he had explored obtaining a bond, that it was going to take about 30 days and asked if, in view of the fact that the substantial portion of the intended distributions has been made would he still need to obtain a bond. And I had a brief follow-up telephone conversation with him where I said, 'Yes, you must get a bond.'" Whittaker Dep. at 31. This appears to have been the last communication between Whittaker and Hock concerning the acquisition of the bond. See also Motion for Summary Judgment at 5. It is undisputed that a bond was never obtained by Hock.
On December 15, 2010 the court entered an Order Concerning Post-Confirmation Procedures, which required Domin-8 to "file a report pursuant to Local Bankruptcy Rule 3020-2 . . . on June 10, 2011, and every six months thereafter until a final report and motion for final decree is filed." Est. doc. 560.
Domin-8 filed post-confirmation reports every six months (Est. docs. 601, 610, 625 & 626) until July 16, 2013 when Bricker filed a Motion for an Order (1) Removing Timothy Hock as the Trustee of D8 2010 Inc. Liquidating Trust; (2) Appointing a Successor Trustee; (3) Placing an Administrative Freeze on the Bank Account(s) of D8 2010 Inc. Liquidating Trust; and (4) Waiving Notice (Est. doc. 629). The Motion asked for the removal of Hock as the Plan Trustee because he disappeared and stopped communicating with Bricker prior to the final distributions having been made to the creditors under the Plan and Liquidating Trust. On the same date, the court entered an order approving that motion, which removed Hock as the Plan Trustee (Est. doc. 630). Subsequently, Hock pled guilty in the United States District Court for the Southern District of Ohio to embezzlement from the Domin-8 bankruptcy estate and income tax evasion.
After Hock's removal, Richard Nelson was appointed as the Successor Trustee under the Liquidating Trust Agreement (Est. doc. 635). Shortly after Nelson was appointed as Successor Trustee, he moved to convert the Chapter 11 cases to Chapter 7, which the court granted (Est. docs. 662 & 668). Thus, Nelson serves both as the Successor Trustee of the Liquidating Trust and as the Chapter 7 trustee for Domin-8's bankruptcy estates and shall collectively be referred to as the "Trustee." The Trustee hired his law firm, Cohen, Todd, Kite & Stanford, LLC, to represent him as the Chapter 7 Trustee (Est. docs. 673 & 683).
Section 2.8 of the Liquidating Trust Agreement provides that:
Should the Chapter 11 Cases be converted to proceedings under Chapter 7 of the Bankruptcy Code, then the Chapter 7 trustee (whether by appointment or election) shall immediately be substituted as Successor Plan Trustee hereunder. In such event, the Plan Trustee shall cooperate with the transition to such Successor Plan Trustee and shall be entitled to payment and reimbursement from the Liquidating Trust for any reasonable costs and expenses incurred during such transition.Est. doc. 555 at 63.
The Trustee filed this adversary proceeding against Bricker, asserting claims against Whittaker for malpractice, breach of fiduciary duty, and for recoupment and disgorgement of attorney fees and expenses paid to him and against Bricker & Eckler for vicarious liability on account of Whittaker acting as an agent and employee, or partner of Bricker & Eckler (Est. doc. 660). Bricker filed an answer and counterclaims seeking recovery of $31,821.67 which they claim is still owed to them for services provided to the Liquidating Trust and for declaratory judgment on the Trustee's claim seeking disgorgement of attorney fees. No party has made a jury demand. After discovery was conducted and experts retained, Bricker filed this Motion to Strike the Expert Report of Robert Goering and to Exclude His Testimony (Adv. doc. 53) (the "Motion to Strike") and a separate Motion for Summary Judgment. The Trustee has opposed both of those motions. The court is addressing the Motion for Summary Judgment through a separate decision and order being contemporaneously entered with this decision.
II. Jurisdiction and Authority of the Bankruptcy Court
The parties have not disputed this court's jurisdiction, nor its constitutional authority to enter a final order or judgment in this matter. They have asserted that this proceeding is a core proceeding and that "[a] non-core proceeding is not alleged." See Joint Preliminary Pretrial Statement of the Parties (Adv. doc. 21 at 2-3). Further, The Plan, Confirmation Order, and the Liquidating Trust Agreement provide to the maximum extent possible for the continued jurisdiction of this court over the affairs relating to the Plan, Confirmation Order, the Liquidating Trust Agreement, and the Liquidating Trust. The court explained in detail its jurisdiction in its contemporaneously entered Memorandum Decision Granting in Part and Denying in Part Defendants' Motion for Summary Judgment, which is incorporated by reference. Furthermore, the parties have consented to this court entering final judgment on all the claims in this adversary proceeding. See Adv. docs. 61, 63, and 64.
See the Plan, Est. doc. 550, Article XIII, ¶ 6 (The bankruptcy court shall have jurisdiction to "decide or resolve any . . . adversary proceedings, contested or litigated matters . . . that may be commenced in the future . . . or instituted by the Trust after the Effective Date[.]") and ¶ 13 (The bankruptcy court shall have jurisdiction to "resolve any other matters that may arise in connection with or relate to the Plan . . . or any contract, instrument, release, indenture or other agreement or document adopted in connection with the Plan[.]"); Confirmation Order, Est. doc. 555, ¶ 58 (The bankruptcy court "shall retain exclusive jurisdiction over all matters arising out of, and related to, the Chapter 11 Cases and the Plan to the fullest extent permitted by law and shall also have jurisdiction over the matters set forth in Article XIII of the Plan."); and Liquidating Trust Agreement, Adv. doc. 555, Article X § 10.18 ("The Court shall retain such jurisdiction over all issues related to the enforcement or interpretation of this Agreement, including the determination of all claims, controversies, disputes and issues arising under or in connection with the Liquidating Trust or this Agreement and the management and administration of the Liquidating Trust and for all of the purposes contemplated herein."). --------
III. Positions of the Parties
Bricker moves to strike Goering's expert report and to exclude his testimony as an expert witness, arguing that he does not have the requisite qualifications to testify as to the Trustee's legal malpractice and breach of fiduciary duty claims. Specifically, Bricker notes Goering has never been a Chapter 7 trustee or any other kind of bankruptcy trustee and the few liquidating trusts with which he has been involved concern Chapter 7 cases, rather than Chapter 11 cases with a "separate liquidating trust and trustee." Accordingly, Bricker asserts that Goering does not have the "specialized knowledge" required to qualify him as an expert to opine on the subjects for which he has been hired to testify. Bricker also seeks to exclude Goering's anticipated trial testimony concerning the local rule requirements for Chapter 11 post-confirmation reports in this district. Goering testified in his deposition that certain information should be included in the post-confirmation reports, but Bricker argues that, pursuant to the court's order and Local Bankruptcy Rule 3020-2, such information is not required.
The Trustee has responded that the admission of expert witness testimony is committed to the court's broad discretion and that the court should err on the side of admitting such evidence subject to "vigorous cross-examination" and "presentation of contrary evidence." Adv. doc. 58 at 3. The Trustee argues that the admission of expert testimony is a "gate keeper" function and the court should exercise its discretion in favor of admission. The Trustee also emphasizes Goering's credentials as an expert witness, asserting that Goering's curriculum vitae establishes that he is eminently qualified to testify as an expert, having practiced law for over 52 years, with the last 40 years having been dedicated to bankruptcy, and having served as an adjunct bankruptcy professor of law at Salmon P. Chase College of Law for over 42 years. This court approved Goering's employment as an expert witness with no objections to the Trustee's application. See Est. doc.'s 699 & 700. Given Goering's vast experience in and knowledge of bankruptcy law, he has the necessary foundation to opine on whether Whittaker was negligent and breached fiduciary duties owed to the client. The Trustee asserts that despite Goering's limited experience in the area of liquidating trusts, his general knowledge and experience as to bankruptcy will assist the court in determining the issues. Id. at 3-7. With respect to Goering's testimony as to the requirements of the post-confirmation reports filed with the court, the Trustee asserts that Goering should be able to testify, based upon his vast bankruptcy experience, what financial information should have been included in those reports. Id. at 15-16.
IV. Substantive Analysis
A. The Relief Seeking to Preclude Goering's Expert Witness Testimony is Denied
1. Standard for Admission of Expert Witness Testimony
A party seeking to introduce expert witness testimony has the burden of establishing its admissibility. Pride v. BIC Corp., 218 F.3d 566, 578 (6th Cir. 2000); Antioch Co. Litig. Trust v. McDermott Will & Emery, No. 3:09-cv-218, 2016 U.S. Dist. LEXIS 114022, at *4-5 (S.D. Ohio Aug. 25, 2016). The federal trial courts' role in ruling upon the admission of expert opinion testimony is to screen out expert opinions which do not meet the requirements of the Federal Rules of Evidence. Info-Hold, Inc. v. Muzak, LLC, No. 1:11-cv-283, 2013 U.S. Dist. LEXIS 117953, at *2-3 (S.D. Ohio Aug. 20, 2013). As such, the court's task is frequently viewed as being one of a "gatekeeper." See Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 147 (1999) and Info-Hold, Inc. at *2-3. However, in executing that function, "[r]ejection of expert testimony under Daubert is the exception rather than the rule." In re Scrap Metal Antitrust Litig., 527 F.3d 517, 531-32 (6th Cir. 2008); Von Wiegen v. Shelter Mut. Ins. Co., No. 5:13-040-DCR, 2014 U.S. Dist. LEXIS 1932, at *13 (E.D. Ky. Jan. 8, 2014). Expert testimony should be admitted as long as the expert "has relevant expertise enabling him to offer responsible opinion testimony helpful to a judge or a jury." Id at *13 (citing Glover v. Hester, No. 09-978, 2011 U.S. Dist. LEXIS 39093, at *1-2 (W.D. La. Apr. 11, 2011))
The road map for the admission of expert witness opinion testimony in federal courts is laid out in Federal Rule of Evidence 702, which provides that:
A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if:F.R.E. 702. The admission of expert opinion testimony requires that the expert must be qualified; the testimony must help the trier of fact determine a fact in issue or understand the evidence; the testimony must be sufficiently grounded in facts or data; the testimony must be based upon reliable principles and methods; and the principles and methods must be properly applied to the facts of the case. See Superior Production P'ship v. Gordon Auto Body Parts Co., Ltd., 784 F.3d 311, 323 (6th Cir. 2015) and United States v. Geiger, 303 F. Appx. 327, 329-330 (6th Cir. 2008). The two leading Supreme Court cases on the admission of expert opinion testimony focus on two of these elements: whether the testimony is relevant and reliable. See Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 589 (1993) and Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 141 (1999). Bricker's Motion to Strike only raises the issue of whether Goering is qualified to opine on whether Whittaker was negligent or grossly negligent and whether his testimony should be excluded to the extent it is "based on an incorrect assumption as to the requirements of the post-confirmation reports in this district." Adv. doc. 53 at 1. Accordingly, the court will limit examination of the issues pertaining to Goering's expert testimony to those specific issues.
(a) the expert's scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue;
(b) the testimony is based on sufficient facts or data;
(c) the testimony is the product of reliable principles and methods; and
(d) the expert has reliably applied the principles and methods to the facts of the case.
2. Facts Pertinent to Goering's Expert Witness Testimony
To properly assess the contested issues as to Goering's anticipated testimony as an expert witness at the trial of this adversary proceeding, it is necessary to consider the relevant underlying facts. Based upon the parties' filings, the facts pertinent to any expert witness' testimony in this case concerning whether Whittaker breached the required standard of care are as follows:
a) Domin-8 filed a Chapter 11 bankruptcy petition and employed Bricker to represent the affiliated entities in the jointly administered Chapter 11 cases;
b) The principal assets of Domin-8 were sold, generating in excess of $14,000,000 in Sale Proceeds;
c) Subsequent to the asset sale, Domin-8 filed and obtained confirmation of the Chapter 11 Plan which provided for the creation of the Liquidation Trust and the appointment of the Trustee for the Trust to hold the sale proceeds and to distribute the sale proceeds to Domin-8's creditors, being the beneficiaries of the trust, in accordance with the Plan.
d) Hock was appointed as the Trustee and Bricker were hired as counsel to the Trust.
e) Prior to confirmation of the Plan, the United States Trustee demanded that the Trust Agreement include a provision requiring that the Trustee obtain and post a bond to protect against any malfeasance relating to the sale proceeds to be held by the Trust. Based upon that demand, the bond requirement was added to the Trust Agreement.
f) After his appointment as Trustee, Hock inquired with Whittaker whether he needed to obtain the bond and Whittaker confirmed with him that he needed to obtain the bond.
g) The bond required by the Trust Agreement was never obtained.
h) Hock, through Bricker, filed post-confirmation reports with this court on a six-month basis as required by the local bankruptcy rules for the court.
i) Hock misappropriated a substantial amount of the sale proceeds and was convicted in the United States District Court of embezzlement of those funds.
j) The post-confirmation reports filed every six months with the court did not disclose that Hock misappropriated funds.
k) The embezzled funds have not been returned to the bankruptcy estate or the Trustee.
l) Nelson was appointed as the successor to Hock as Trustee of the Liquidating Trust. Subsequent to Nelson's appointment as the Successor Trustee, the Chapter 11 cases were converted to Chapter 7 of the Bankruptcy Code and Nelson was appointed as the Chapter 7 Trustee.
3. Goering is Qualified to Testify as an Expert Witness as to the Negligence Issue
Goering's qualifications and expertise in the general area of bankruptcy law are not in issue. He graduated from the Salmon P. Chase College of Law in 1962 and has been in the practice of law for over 50 years, with over 40 of those years dedicated to bankruptcy. He has been an adjunct bankruptcy professor at the Salmon P. Chase College of law for over 40 years. He also was the Chairman of the Bankruptcy Committee of the Cincinnati Bar Association and a founding member of the Midwest Regional Bankruptcy Seminar. See Curriculum Vitae of Robert A. Goering, Est. doc. 699-2 (Exhibit B). Accordingly, his general bankruptcy experience and knowledge is exemplary.
However, Bricker notes that Goering has limited experience with liquidating trusts, particularly those arising out of Chapter 11 bankruptcy cases, and has never served as a liquidating trustee. Bricker therefore argues that he does not have the "specialized knowledge" required to serve as an expert witness in this case. Adv. doc. 53 at 1-3; Adv. doc. 60 at 1-2.
An expert's testimony must coincide with the area of the expert's expertise. Smelser v. Norfolk S. Ry. Co., 105 F.3d 299, 305 (6th Cir. 1997); Antioch, 2016 U.S. Dist. LEXIS 114022, at *6; Elswick v. Nichols, 144 F. Supp. 2d 758, 766 (E.D. Ky. 2001). The issue then becomes how narrow and precise must that expertise be? To qualify as an expert to testify as to Whittaker's conduct, must the expert be qualified specifically in the area of Chapter 11 liquidation trusts by having substantial experience and knowledge in such trusts? Or is it sufficient for the expert witness to have a more generalized, but substantial knowledge of principles and standards of bankruptcy counsel? The Sixth Circuit has answered this question as follows: "The issue with regard to expert testimony is not the qualifications of a witness in the abstract, but whether those qualifications provide a foundation for a witness to answer a specific question." Berry v. City of Detroit, 25 F.3d 1342, 1351 (6th Cir. 1994), cert. denied 513 U.S. 1111 (1995). See also Elswick, 144 F. Supp. 2d at 766.
Goering has drawn two conclusions which form the basis of his opinion: 1) that "Whittaker committed malpractice by negligently failing to ensure that the Trustee secured a bond as required by the confirmed plan;" and 2) that Whittaker was negligent in failing to "read the [post-confirmation operating] reports and react to them." Adv. doc. 58 at 11-12. Thus, the issue is: Does Goering have the necessary expertise or foundation to opine as to those two conclusions? The court will address the expertise related to those two conclusions separately.
As to the conclusion regarding Whittaker's failure to ensure the acquisition of the bond, while Bricker focuses on Goering's lack of experience as a liquidating trustee in a Chapter 11 bankruptcy case or as counsel for such a trustee, the court finds that such lack of experience is not fatal to Goering's ability to testify as an expert on that issue. Bricker fails to explain why such narrow experience is critical. The Plan and the Liquidating Trust Agreement provide for the establishment of the Liquidating Trust, the appointment of the Trustee, and the securing of a bond by the Trustee to protect the Sale Proceeds in the case of malfeasance. Bricker has failed to indicate how the duties of counsel in a Chapter 11 bankruptcy case with a liquidating trust is unique to Chapter 11 bankruptcy cases, nor is the court aware of any such difference. The record reflects that Goering has substantial experience in Chapter 7 and Chapter 13 cases. Both Chapter 7 and Chapter 13 cases include the appointment of trustees - in the case of Chapter 13 cases, a standing trustee (28 U.S.C. § 586(b) and 11 U.S.C. § 1302), and in the case of Chapter 7 cases a trustee from the panel of Chapter 7 trustees appointed by the United States Trustee (28 U.S.C. § 586(a)(1) and 11 U.S.C. §§ 701-704). In all such cases the trustees are fiduciaries over funds and charged with the duty to dispose of such funds in accordance with the Bankruptcy Code and in Chapter 13 cases, the Chapter 13 plan (11 U.S.C. § 1302(b)(3) and 11 U.S.C. § 704(a)(1) and (2)). Bricker has not indicated how the mere fact that the bond required of Chapter 7, 11, 12, and 13 trustees is provided for by 11 U.S.C. § 322(a) while the bond required of Hock as the Liquidation Trustee was required by the Liquidation Trust Agreement varies the obligations of bankruptcy fiduciaries and professionals dealing with bankruptcy estates and funds held in fiduciary accounts. Further, in addition to Goering's substantial bankruptcy experience and expertise, including representing Chapter 7 trustees, the record reflects that Goering also is experienced in the area of probate trusts. See Transcript of Deposition of Robert A. Goering at 11-12, Adv. doc. 53 (Exhibit A). Again, Bricker fails to indicate how the duties of counsel involved with such trusts varies from the duties of counsel dealing with liquidation trusts created by a Chapter 11 plan.
Furthermore, Bricker's concerns with Goering's lack of experience with Chapter 11 liquidating trusts is best addressed at trial, especially given that it will be a bench trial. As noted by the Fifth Circuit, a trial court should not "transform a Daubert hearing into a trial on the merits," and "most of the safeguards provided for in Daubert are not as essential in a case . . . where a district judge sits as the trier of fact in place of a jury." In re Texas Grand Prairie Hotel Realty, L.L.C., 710 F.3d 324, 329 (5th Cir. 2013) (citations omitted). See also Gibbs v. Gibbs, 210 F.3d 491 (5th Cir. 2000) (same). Goering's legal education, his substantial experience in bankruptcy matters over the last 40 years, and his bankruptcy expertise, provide the requisite foundation for his opinion on the issue of whether Whittaker committed malpractice in not ensuring that the bond was acquired. Bricker can cross-examine Goering about his experience, or lack thereof, in the area of liquidating Chapter 11 trusts, but these facts do not disqualify him. See Antioch, 2016 U.S. Dist. LEXIS 114022, at *7 and Benton v. Ford Motor Co., 492 F. Supp. 2d 874, 876-78 (S.D. Ohio 2007) ("where the opposing side has the opportunity to cross-examine an expert regarding his qualifications and where the jury is properly instructed to determine for itself the weight and credibility to be given to the expert's testimony, an argument opposing admissibility of the testimony on the grounds that it is outside the witness's area of expertise must fail."). "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." Daubert, 509 U.S. at 596 (citation omitted).
4. Goering's Testimony Concerning the Legal Requirements of Chapter 11 Post-Confirmation Reports is not Excluded
Bricker's argument that Goering's testimony at trial must be excluded "to the extent his opinions are based on an incorrect assumption as to the requirements of the post-confirmation reports in this district" fails for similar reasons. First, Goering's opinion appears to be broader than simply concluding that Whittaker was negligent or grossly negligent in allegedly failing to ensure that the post-confirmation reports included what he perceived they should include. Goering concluded that "Whitaker's failure to validate the accuracy of the reports he was signing as attorney for the trust is a breach of his duties under BR 9011, as well as a breach of his fiduciary duty to the trust he claims to represent in the reports." Adv. doc. 57 (Exhibit B at 8). That conclusion is broader than the narrower issue that Bricker presents as to whether the operating reports included the information which was required by Local Bankruptcy Rule 3020-2. More importantly, to the extent that Bricker disagrees with Goering's opinions and testimony or the facts he relies upon, those issues "bear on the weight of the evidence rather than on its admissibility." Von Wiegen, 2014 U.S. Dist. LEXIS 1932, at *15 (citing McLean v. 988011 Ontario Ltd., 224 F.3d 797, 801 (6th Cir. 2000)). Bricker may cross-examine Goering on his assumptions and conclusions as to the information which was and was not provided in those reports and may present its own expert testimony as to those issues. The issue as to the post-confirmation reports, as the court understands it from the present record, is whether Whittaker was grossly negligent in failing to discover Hock's malfeasance as a result of the information included or omitted in those reports.
If the court concludes that Goering's opinion as to whether Whittaker was grossly negligent relating to the post-confirmation reports is premised upon an erroneous assumption as to what was required to be included in the post-confirmation reports, the weight which the court assigns to Goering's opinion testimony will be negatively impacted.
B. The Goering Expert Report is not Stricken
Bricker moved to "strike" the Goering expert report. The only procedural rule providing for motions to strike documents is Federal Rule of Civil Procedure 12(f), and it only applies to information within pleadings. Even in those limited circumstances, "[m]otions to strike are viewed with disfavor and are not frequently granted." Operating Eng'rs Local 324 Health Care Plan v. G & W Constr. Co., 783 F.3d 1045, 1050 (6th Cir. 2015) (citations omitted). Decisions do not favor striking expert reports or testimony. Good v. Am. Water Works Co., 2:14-01374, 2016 U.S. Dist. LEXIS 141865, at *55 n.6 (S.D. W. Va. Oct. 13, 2016); United States v. Marder, No. 1:13-cv-24503-KMM, 2016 U.S. Dist. LEXIS 65510, at *22 (S.D. Fla. May 18, 2016). In this instance, the court interprets this request, like the motion to exclude Goering's testimony, as a motion in limine. In addition, the court must decide whether the Goering expert report should be considered upon summary judgment. See Federal Rule of Civil Procedure 56(c)(2). As noted, the Goering expert report, and the opposing report of Bricker's expert was included in the Trustee's response to Bricker's Motion for Summary Judgment. Adv. doc. 57 (Exhibits B and C).
Goering's experience as bankruptcy counsel and expertise in the bankruptcy area is sufficiently related to the issues in which he would testify. Bricker, of course, may cross- examine Goering about any aspect of his testimony, including any findings, conclusions, or assumptions contained in his expert report. In the context of a bench trial, the court finds the concern about prejudice to be minimal, particularly since the court can interpret its own post-confirmation order and is familiar with Local Bankruptcy Rule 3020-2. Similarly, the court finds insufficient bases to exclude the Goering report in its consideration of the Trustee's response to Bricker's Motion for Summary Judgment.
V. Conclusion
For the reasons explained in this Memorandum, the Defendants' Motion to Strike Expert Report of Robert Goering and to Exclude His Testimony is denied. The court is contemporaneously entering an order incorporating this decision.
This document has been electronically entered in the records of the United States Bankruptcy Court for the Southern District of Ohio.
IT IS SO ORDERED.
/s/ _________
Guy R. Humphrey
United States Bankruptcy Judge Dated: April 6, 2017 Copies to:
Electronically Served
Richard D. Nelson (Counsel for the Plaintiff) Donald E. Burton (Counsel for the Defendants) D. Jeffrey Ireland (Counsel for the Defendants)