Judge: Mark H. Epstein, Case: 19SMCV01265, Date: 2023-02-14 Tentative Ruling

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Case Number: 19SMCV01265    Hearing Date: February 14, 2023    Dept: R

The matter is here for final status conference.  The court is in receipt of the following materials: (1) Joint Witness list (54 hours of direct plus cross, suggesting approximately 15 days of testimony, inclusive of re-direct); (2) Joint Exhibit List (unsure about status of objections—very few listed and the column regarding authenticity is blank, but the court assumes that a blank suggests that authenticity is stipulated and that no objections are made); (3) Joint Jury Instructions; (4) Plaintiff’s Proposed Jury Instructions; (5) Plaintiff’s Objections to Defendant’s Proposed Jury Instructions; (6) Defendant’s Proposed Jury Instructions, including Objections to Plaintiff’s Instructions; (7) Plaintiff’s Proposed Special Verdict Form; (8) Defendant’s Proposed Verdict form, with Objections to Plaintiff’s Form; (9) Plaintiff’s Objections to Defendants’ Verdict Form; (10) Joint Statement of the Case; (11) Defendants’ Deposition Chart (with suggestion that plaintiff did not participate in it); (12) Statement of Unusual Issues (including whether the fiduciary duty claims are legal or equitable and issues of trial technology): (13) Samara’s Trial Brief; (14) Other Defendants’ Trial Brief.

The court believes that this complies with the court’s FSC rules, at least assuming that the court is correct regarding exhibits, and, if that assumption is correct, the court deems the case READY FOR TRIAL.

Plaintiff filed one MIL.  The MIL was filed late, but that is because it is based on the witness list.  Although it is late, the court will consider it and allow the defense to argue.  Tentatively, the court is inclined to GRANT the motion as to Cunanan.  Plaintiff timely sought her contact information.  Defendants stated, apparently incorrectly, that she could be contacted through defense counsel.  When plaintiff tried to depose her and contact her through defense counsel, plaintiff was told by defense counsel that she had left Mavaddat’s employ years before the discovery responses were served leaving no forwarding information.  That strongly suggests that defense counsel acted unethically in responding that the witness could be contacted through them—they made no effort to so determine and they had no idea how to contact her.  Nor was she a defendant or in defendants’ employ at the time.  And the verification also appears improper in that respect (to put it kindly).  That smacks of gamesmanship pure and simple and the proper remedy is to exclude her testimony.  As to the Dayanis the court is inclined to DENY the motion, but WITHOUT PREJUDICE.  Plaintiff well knows who these witnesses are: they are attorneys who at one point represented plaintiff.  Insofar as the court can tell, defendants plan to ask them only about non-privileged material—whether they were consulted on the subject matter of the contract at issue.  That is not privileged.  That said, it could well be that the fact of the consultation is not controverted and, if not, then calling these witnesses is an undue waste of time and could also cause the jury to believe that someone is hiding something because their advice is not being disclosed.  More pointedly, if plaintiff’s principal is going to so testify, then there is no purpose to be served by calling these witnesses at all.  If that is the case, the court would entertain a later motion.

Defendants filed five MILs.  The first was to preclude evidence of a “trust” arrangement.  The court is inclined to DENY the motion as one that should have been brought as a motion for summary adjudication nor is the court inclined to stop plaintiff from quoting the contract.  At issue is whether the 28% economic interest plaintiff had in NHH was held “in trust” so as to implicate the host of fiduciary duties a trustee owes a beneficiary.  The fact is, though, that the contract uses the phrase.  Plaintiff will not be precluded from quoting the contract.  However, the legal effect of that phrase is for the court, not the jury.  Plaintiff ought to refrain from saying or implying that the phrase means that the panoply of trust duties attached until and unless the court so holds.  The court is aware of defendants’ argument that there is either no trust at all, or the trust is a so-called “dry trust,” which imposes no duties on the trustee.  However, it would seem that all of that is for the court to decide, not the jury. 

The second MIL is to preclude evidence that plaintiff was a “member” of NHH.  Again, this seems more like an effort to obtain summary adjudication on the breach of fiduciary duty claim.  And again, the phrase is used in the contract, and plaintiff will not be barred from quoting the operative agreement.  But whether, as a legal matter, the contract caused plaintiff to be a member with the attendant fiduciary duties that could be related thereto is for the court.  Plaintiff ought not suggest that such duties exist until and unless the court so rules.  As such, the motion is DENIED with regard to the use of the word or phrase.

The third MIL is to preclude testimony about the capital call provisions in the NHH Operating Agreement.  That motion is DENIED.  Even assuming, without deciding, that plaintiff is not a “member” of NHH, that does not mean that plaintiff was unaware of the capital call provisions and did not rely on those provisions in deciding to invest.  The court cannot say that the two agreements—related, as they are—are so siloed that the Operating Agreement cannot be brought before the jury.  Of course, it will be for plaintiff to provide evidence that it was aware of, and relied on, the Operating Agreement’s terms in signing the NHH.

The fourth MIL is to preclude argument that the NHH Agreement is ambiguous.  The motion is DENIED.  While plaintiff might well have earlier stated that there was no ambiguity, that is not binding.  Plainly the parties differ on the contract’s meaning.  The fact that each party believes a contract is clear, but the parties believe that the clear language means different things, suggests that there is indeed an ambiguity.  Plaintiff may so argue here.  That said, however, the court reminds the parties that unless the parol evidence is in dispute, the contract’s meaning is for the court, not the jury.  At the moment, the court does not see any disputed fact as to the contract’s meaning as to the parol evidence.  If that remains the case, the court will instruct the jury as to the contract’s meaning; not the other way around.

The fifth MIL is to preclude plaintiff’s expert.  The expert is an expert in the Farsi language who will opine on the meaning of an English word when translated into Farsi.  The motion is GRANTED.  The contract is in English.  There is no evidence that anyone sought a translation of the contract before signing it and there is no evidence that the parties discussed the Farsi meaning of the English term.  Whatever plaintiff’s principal might have thought it meant (assuming he translated it at all) is irrelevant.  A party’s unarticulated understanding a contract’s meaning is inadmissible—it is not a form of parol evidence.  The expert here is one step removed even from that, for the expert has not spoken to plaintiff’s principal about this; the expert is simply going to say what a generic Farsi speaker might assume the English word to mean.

The court is currently engaged in what it hopes will be two short bench trials.  Following that is a jury trial, but the court is not sure whether or not it will actually go forward.  (Defense counsel recently withdrew, but not before ensuring that all FSC materials were properly filed.)  If, as may be the case, the jury trial does not go forward, then this case will trail from day to day until the court is ready to call it.  If the parties would prefer, the court will commit to giving two days’ notice.  However, after the bench trials are concluded, and if the jury trial set for today does not go forward, this is the next trial on the court’s docket.  Given its age, and given the fact that the court inconvenienced Mr. Reiss, the court will give this case priority over other cases unless there is a case entitled to statutory preference.

The court will also discuss whether, given that there is a significant part of the case that may be for the court and not the jury, the bifurcation issue ought to be revisited.