Roche Freedman LLP v. Jason Cyrulnik

Background

Freedman Normand Friedland LLP and the counterclaim-defendants moved to limit or exclude several witnesses offered by Jason Cyrulnik. The motions concerned Eric Jenkins’s proposed expert testimony about the value of four contingency matters; Cyrulnik’s proposed lay testimony about the value of the firm and damages from his removal; Cyrulnik’s proposed testimony as his own expert; Vikram Kapoor’s expert testimony about cryptocurrency tokens; and Harold L. Deiters III’s expert testimony responding to Kapoor. The opinion explains that motions in limine are preliminary evidence rulings that may change as the case develops.

Jenkins’s testimony

The court granted the motion to exclude Jenkins’s testimony about the value of the Apothio, Tether, Scurtis, and Kleiman litigations. Although Jenkins had substantial finance, accounting, and company-valuation experience, the court found that he had never valued a lawsuit, lacked legal training, and had not reliably applied his valuation experience to litigation matters.

The court also found that Jenkins’s methodology was unsupported. He used a ten-factor test, then created an individual-case test without citing support for it. His opinions depended on unsupported assumptions about potential damages and the likelihood of success. The court further found that his opinions were not helpful to the jury because they conflicted with the actual status or results of the matters. The court noted that the parties had not objected to Jenkins’s conclusions about amounts allegedly owed to Cyrulnik under a separate agreement concerning the Kleiman litigation.

Cyrulnik’s lay testimony and proposed expert testimony

The court denied the motion to prevent Cyrulnik from testifying as a lay witness about the value of the firm and its contingency cases. Under Evidence Rule 701, a witness may give opinion testimony based on personal knowledge rather than specialized expert methods. The court found that Cyrulnik plausibly had the necessary personal knowledge because he participated in discussions about creating the partnership and served on the firm’s relevant committees. The court stated that the firm and counterclaim-defendants could object to specific testimony if there were a good-faith basis to claim that Cyrulnik lacked personal knowledge.

The court denied as moot the letter motion to prevent Cyrulnik from testifying as his own expert. Because the court allowed him to testify as a lay witness about subjects within his personal knowledge, it concluded that he did not need to testify as an expert. The court also noted that the firm and counterclaim-defendants could seek a supplemental deposition if the valuation of damages had not been covered in Cyrulnik’s deposition.

Kapoor’s token valuation testimony

The court denied the motion to exclude Kapoor’s testimony about the value of the tokens. The parties agreed to analyze the tokens in four categories: 2019 vested tokens; vested and unrestricted remaining tokens; vested and restricted remaining tokens; and unvested remaining tokens. The court also stated that testimony about prejudgment interest was not to be presented to the jury because that issue was for the court.

The court rejected the argument that Kapoor used the wrong valuation dates for the 2019 vested tokens. It concluded that the alleged breach of the memorandum of understanding occurred when Cyrulnik was removed from the firm on February 12, 2021, allegedly without cause, rather than when other individuals failed to give him tokens when they were issued to the firm. The court also stated that Kapoor’s use of a highest-intermediate-value measure could be relevant to other claims or issues, although it questioned whether the conversion claim should be reinstated given the parties’ positions about the proper damages measure.

The court rejected the argument that Kapoor’s testimony was inadmissible merely because some calculations involved basic arithmetic. Kapoor’s analysis also involved assumptions about which token prices to use, and the court found that the explanation could help the jury. The court likewise allowed Kapoor’s testimony about vested and unrestricted tokens. It noted that the parties did not appear to challenge his testimony about vested and restricted tokens. For unvested tokens, the court rejected the argument that valuation was too speculative because the tokens had in fact been awarded and a later contract providing additional token-based compensation had been finalized. The court concluded that the remaining challenges concerned the weight of Kapoor’s testimony, which could be tested through cross-examination rather than exclusion.

Deiters’s testimony

The court denied Cyrulnik’s motion to exclude Deiters’s testimony. Deiters was a forensic accountant with numerous certifications and some training in cryptocurrency valuation. The court found him qualified to offer the remaining opinions and found no showing that those opinions were so unreliable that the jury should not consider them.

The court stated that some of Deiters’s criticisms were irrelevant because portions of Kapoor’s testimony had been excluded. In particular, Deiters’s opinions about token valuation dates other than February 12, 2021, were irrelevant to the alleged breach-of-contract claim because the court identified February 12, 2021, as the relevant breach date. The court nevertheless allowed Deiters to testify about other valuation issues, including the terms of the engagement letter and contingencies that could reduce the token values.

Disposition

The court granted the motion to exclude Eric Jenkins. It denied the motions to prevent Cyrulnik from testifying as a lay witness and to exclude Vikram Kapoor. It denied as moot the motion to prevent Cyrulnik from testifying as an expert. It denied Cyrulnik’s motion to exclude Harold L. Deiters III. The clerk was directed to close the docket entries associated with those motions.