Eisen v. Day

Background

The court held a pretrial conference on March 20, 2024, and resolved the parties’ motions in limine, which are requests to decide before trial what evidence may be presented. The order addressed seven motions.

Eisen Parties’ Motion No. 1: Damages disclosures

The Eisen parties asked the court to exclude damages information that the Day parties disclosed on March 4, 2024. The Day parties argued that the disclosure only collected and summarized damages theories and calculations previously disclosed during discovery.

Rule 26 requires parties to disclose a computation of each category of damages and to supplement disclosures when they are materially incomplete or incorrect. Rule 37 provides that information not properly disclosed generally may not be used at trial unless the failure was substantially justified or harmless.

The court found that the Day parties had previously disclosed the type or nature of damages in categories 1, 2, 3, 5, and 6, but apparently had not disclosed the amounts for most categories until March 4, 2024. The court found the supplemental disclosure untimely and the delay not substantially justified.

The Eisen parties conceded that they were not prejudiced by the late disclosure of categories 5 and 6. The court therefore permitted the Day parties to present evidence supporting those categories. The court also found no prejudice concerning category 3, involving deposits that Mr. Eisen allegedly retained, and permitted evidence supporting that category.

The court found that the late disclosure prejudiced the Eisen parties’ ability to defend against categories 1 and 2 because discovery had closed and they had no realistic opportunity to investigate the customers involved. The Day parties may not present evidence supporting categories 1 and 2 unless the damages computations were disclosed during expert discovery. The court also barred evidence supporting category 4 because neither that category nor its computation had been disclosed before March 4, 2024.

The court stated that the same disclosure requirement applied to the Eisen parties. If they had also failed to disclose the computation of each damages category they claimed, the court would not permit them to present evidence supporting those damages at trial.

Eisen Parties’ Motion No. 2: Band logo

The Eisen parties asked the court to exclude references or arguments concerning allegations that Mr. Eisen violated Ms. Day’s or Cosmo Alleycats LLC’s rights in the band’s logo. The Day parties argued that the logo was relevant to Mr. Eisen’s ouster from the band, his alleged refusal to cancel a trademark application, and his alleged use of the band’s name and logo to divert customers to his own band.

The court agreed with the Day parties and denied the motion.

Eisen Parties’ Motion No. 3: Exhibits not disclosed in discovery

The Eisen parties sought to exclude Exhibits 1333 through 1337 because the Day parties had not disclosed them during discovery. The court denied the motion as to Exhibits 1333 through 1336, finding that the Eisen parties were not prejudiced by the failure to disclose those materials.

The court denied the motion without prejudice as to Exhibit 1337 because the Day parties acknowledged that the described exhibit did not yet exist. The Eisen parties may renew the motion or object if the Day parties later try to offer that exhibit into evidence.

Eisen Parties’ Motion No. 4: Robert Bates’s testimony

The Eisen parties asked the court to limit Robert Bates, the Day parties’ valuation expert, to opinions and matters disclosed in his expert reports. Because the motion did not identify any particular testimony for exclusion, the court denied it. The court explained that expert witnesses generally must disclose their opinions, supporting information, and qualifications, and that deposition testimony does not replace adequate disclosure in the expert’s report.

Eisen Parties’ Motion No. 5: Conversion of the partnership into an LLC

The Eisen parties asked the court to exclude evidence that the Cosmo Alleycats partnership was converted into a limited liability company in December 2020. They argued that Ms. Day had not complied with California law and that testimony about the conversion would improperly offer legal conclusions or unqualified expert testimony.

The court denied the motion because whether the conversion complied with California law depended on factual and legal questions for trial. The court also ruled that Ms. Day could assert attorney-client privilege over the contents of communications with her counsel. However, she could not refuse to testify about her own conduct and actions or rely on having consulted counsel to suggest that her conduct was proper.

Day Parties’ Motion No. 1: David Rouda’s testimony

The Day parties asked the court to bar David Rouda from testifying about out-of-court statements by Mr. Eisen and from offering opinions about Mr. Eisen and Ms. Day’s working relationship or the Cosmo Alleycats’ legal structure. The court granted the motion in part and denied it in part.

Assuming a proper foundation, Mr. Rouda may testify about relevant statements by Ms. Day that fall within an exception to the hearsay rule. He may not testify about matters as to which he or Mr. Eisen asserted attorney-client privilege. The court deferred other objections until trial and stated that, if his testimony followed his August 6, 2023 declaration, very little of it was expected to be admissible. The court said that concerns about possible bias went to his credibility and the weight of his testimony, not its automatic exclusion.

Day Parties’ Motion No. 2: Ray Clark’s testimony and sanctions

The Day parties asked the court to exclude the opinions and testimony of Ray Clark, the Eisen parties’ valuation expert, because the Eisen parties allegedly did not disclose the datasets, models, and calculations underlying his valuations, relied on an undisclosed colleague’s analysis, and did not adequately prepare Clark for his deposition. They also requested sanctions against Eisen parties’ counsel for allegedly improper deposition objections.

The court granted the motion in part and denied it in part. It found that the Eisen parties had an affirmative duty to disclose the materials Clark considered and relied on, and that they had not timely disclosed them. The court further found that the failure was not substantially justified or harmless and prejudiced the Day parties’ ability to prepare for trial.

If the undisclosed materials concerned Clark’s opinions about the fair market value of Mr. Eisen’s partnership interest and Mr. Eisen’s unpaid earnings, Clark may not testify about either opinion. The Eisen parties could identify by April 4, 2024, any opinions in Clark’s report that did not depend, wholly or partly, on the materials that were not timely disclosed. The court denied the Day parties’ request for sanctions without prejudice because it did not comply with Civil Local Rule 7-8.

Disposition

The order resolved pretrial evidence and discovery-related issues. It did not decide the parties’ underlying claims or counterclaims on their merits.