Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_14-cv-00761/USCOURTS-azd-2_14-cv-00761-2/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1441 Petition for Removal- Breach of Contract

---

UNITED STATES DISTRICT COURT

DISTRICT OF ARIZONA

Western Alliance Bank, )

)

Plaintiff, ) 2:14-cv-0761 JWS

)

vs. ) ORDER AND OPINION

)

Richard Jefferson, ) [Re: Motions at Dockets 108 and 110]

)

Defendant. )

)

)

Richard Jefferson, )

)

Counter-claimant, )

)

vs. )

)

Western Alliance Bank, )

)

Counter-defendant. )

)

)

Richard Jefferson, )

)

Third-party plaintiff, )

)

vs. )

)

Theodore Kritza & Michelle Lee )

Kritza, )

)

Third-party defendants. )

 )

Case 2:14-cv-00761-JWS Document 186 Filed 08/07/15 Page 1 of 15
I. MOTIONS PRESENTED

At docket 108 third-party defendants Theodore Kritza and Michelle Lee Kritza

(“Kritza”) move for an order precluding opinion testimony from William Flynn (“Flynn”), a

forensic document examiner retained by defendant, counter-claimant, and third-party

plaintiff Richard Jefferson (“Jefferson”). At docket 110, plaintiff Western Alliance Bank

(“Bank”) also moves to preclude opinion testimony from Flynn. Jefferson opposes both

motions in a single response at docket 137. Kritza’s reply is at docket 145. Bank did

not file a reply. Oral argument was requested but would not assist the court. 

II. BACKGROUND OF THE LAWSUIT

The court has described the background giving rise to this litigation in detail in

the order at docket 183. It need not be repeated here. Suf fice it to say for purposes of

the present motion that Bank sued Jefferson to recover an unpaid debt evidenced by or

reflected in various documents attached to its complaint. In his answer, Jefferson

admitted that he is the borrower listed in the paperwork, but alleged that his signature

on the documents was forged. In his third-party complaint against Kritza, Jefferson

recites, “Jefferson affirmatively believes that Exhibits A-K [to Bank’s complaint] are

forgeries, signed without his consent or authorization by Third-Party Defendant

Theodore Kritza.”1 Jefferson retained Flynn as a handwriting expert to examine the

signatures whose authenticity he disputes.

1Doc. 33 at ¶ 9.

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Case 2:14-cv-00761-JWS Document 186 Filed 08/07/15 Page 2 of 15
III. DISCUSSION

A. Background Of The Motions at Dockets 108 and 110

The court entered a Scheduling Order at docket 26 which set the date for Bank’s

expert disclosures on September 5, 2014, the date for Jefferson’s expert disclosures on

October 3, 2014, and rebuttal reports on November 4, 2014.2 Thereafter the parties

twice stipulated to extend those deadlines. The court approved the stipulations. The

order at docket 57 approving the second stipulation set the deadline for Jefferson’s

expert disclosures on November 10, 2014, Kritza’s expert disclosures on December 10,

2014, and the deadline for rebuttal expert disclosures on January 6, 2015.

Of course, the deadlines for expert disclosures are an important consideration in

setting a deadline for the close of discovery. The Scheduling Order at docket 26 set the

deadline for completion of discovery on April 10, 2015. On April 10, the parties

stipulated at docket 91 to extend the date for taking the depositions of lay witnesses

Corey Hoff, James Tucciarone, Richard Jefferson, Richard Murnick and Daniel Kelly

until various specific dates, the latest of which was May 6, 2015.3 The parties also

stipulated to extend the deadlines for discovery motions and dispositive motions to

reflect the extension of the discovery deadline. The court approved the stipulation in an

order at docket 94. Thus, with the exception of the depositions of the five specified

2No deadline was set for Kritza to disclose an expert report because the parties’

underlying report upon which the court relied was based on a meeting held prior to the

appearance of Kritza in the action.

3

The parties subsequently stipulated at docket 103 and jointly moved at docket 104 to

extend the date for Daniel Kelly’s deposition to May 20, 2015. The requested extension was

approved by the court in the order at docket 105.

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Case 2:14-cv-00761-JWS Document 186 Filed 08/07/15 Page 3 of 15
witnesses, discovery closed on April 10, 2015.

Jefferson made a timely expert disclosure on November 10, 2014, (“First

Report”) identifying Flynn as an expert forensic document examiner, setting out his c.v.,

and describing Flynn’s examination of six signatures known to be genuine and his

examination of 37 questioned signatures. The First Report also provided Flynn’s

conclusions:

Based on my knowledge, experience, and the forensic examination of the

questioned Items Q(1-37) and known Items K(1-6), the following

conclusions were reached:

1. The known signatures of Richard Jefferson appearing on Items

K(4-6) (his post-NBA style of signature) are in agreement with one

another. That is to say, there are consistent letterforms, sizes and

movements associated with these three signatures, even though

they have been executed of over a period of more than 3 years.

2. The 37 questioned signatures, however, are made in ways that are

consistently different than the K(4-6) signatures.

3. If Mr. Jefferson’s signature style has remained consistent with

those exhibited in Items K(4-6) during the period in question (2004-

2013), then there is strong forensic evidence indicating that the

signatures in question are the product of another writer.

4. I would request that additional normal-course-of-business

signatures of Mr. Jefferson be obtained that are unquestionably his

and cover the period in time 2004 through 2013. If such signatures

can be located and submitted for forensic examination, it is likely

that a final determination as to authorship of the questioned

signatures can be obtained.4

The First Report suggests that, given an assumption about how representative

4Doc. 108-1 at 6-7. It will be noted that Flynn’s statement in Item 1 to the effect that the

three known items spanned a period of three years is inconsistent with Flynn’s description of

the items. He describes K4 as a document dated July 21, 2010, item K5 as an undated

document, and item K6 as a document dated 10-9-12, establishing a time span of only 2 years

and 2 months.

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Case 2:14-cv-00761-JWS Document 186 Filed 08/07/15 Page 4 of 15
Items K(4-6) may be, there would be strong evidence that the questioned documents

were forged. However, the First Report does not actually conclude that any of the

questioned documents are forgeries. The First Report was the only expert witness

disclosure from Jefferson available to Kritza prior to the date his own expert disclosure

was due on December 10, 2014. Given the absence of probative value in Flynn’s

conclusions in the First Report, it is not surprising that Kritza did not retain an expert to

provide expert testimony regarding the signatures.

On March 13, 2015 Kritza obtained a subpoena directing Flynn to provide the

documents on which the First Report relied and then noticed Flynn’s deposition for April

9, 2015. Responding, on March 25, 2015, Jefferson disclosed the documents relied on

by Flynn in the First Report, and also disclosed a second report from Flynn dated March

25, 2015 (“Second Report”) together with the additional documents relied on in the

Second Report.5 The Second Report reflects Flynn’s examination of 46 questioned

items and 20 items known to contain Jefferson’s signature as well as one item known to

contain the handwriting and signatures of Corey Hoff. What may be Hoff’s signature

appears as a witness’ signature on the first questioned item, a durable power of

attorney dated August 1, 2003, a document of great significance in this litigation. 

The Second Report is substantially more significant than the First Report. In it

Flynn announces the following conclusions, among others:

2. As a result of my examination I have concluded that, to a high

degree of probability, the “Richard Jefferson” signatures in question

appearing on Items Q(1-41) and Q(43-46) were not executed by

the maker of the known Richard Jefferson signatures. The

5A copy is at doc. 110-3.

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Case 2:14-cv-00761-JWS Document 186 Filed 08/07/15 Page 5 of 15
questioned signature appearing on Item Q-42 was too faint to see

the fine detail needed to reach a conclusion as to authorship.

3. On March 14, 2015 I received an email attachment from Mr.

Saalfeld marked as the Cannon Street Interview Report dated

3/14/15. This document contained known handwriting and

signatures of Mr. Corey Hoff. The signatures contained in this file

were then compared to the questioned Corey Hoff signature

appearing on Item Q-1. In this exam significant differences were

noted in the “Hoff” signature appearing on Item Q-1 and the “early

version” of Mr. Hoff’s signature. As a result of this analysis it is

considered probable that the maker of the known Corey Hoff

signatures on Item K-21 did not execute the Hoff signature

appearing on Item Q-1.6

Flynn was deposed as scheduled on April 9, 2015. During the deposition, he

testified that he probably began asking plaintiff’s lawyer, Mr. Saalfald, for additional

known signatures shortly after he issued the First Report and that Saalfald assured him

“they would make every effort they could.”7 Flynn testified that he received the

additional known Jefferson signatures on March 17, 2015, and the Hoff writing on

March 23, 2015.8

Jefferson supplemented his expert disclosures with the Second Report and the

various signature-bearing documents on March 26, 2015,9 more than four months after

Jefferson’s expert disclosures were required.10 Bank and Kritza contend that because

the Second Report and all of the known signature-bearing documents were untimely

6

Id. at 14.

7Deposition of William J. Flynn, extract provided at doc. 108-1 at 60-61 (pp. 31-32 of the

deposition transcript).

8

Id. at 59-60 (pp. 29-30 of the deposition transcript).

9Opposition, doc. 137 at 5.

10Order at doc. 57.

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Case 2:14-cv-00761-JWS Document 186 Filed 08/07/15 Page 6 of 15
disclosed, the court should exclude Flynn’s testimony in its entirety. Jefferson argues

that for several reasons, the court should not exclude Flynn’s testimony.

The arguments by Bank and Kritza implicate several provisions of the Federal

Rules of Civil Procedure. The first is Rule 26(b)(2)(B) which, as pertinent here, requires

that expert disclosures include: “(1) a complete statement of all opinions the witness

will express and the basis and reasons for them; (ii) the facts or data considered by the

witness in forming them; [and] (iii) any exhibits that will be used to summarize or

support them.” The second is Rule 26(a)(2)(D) which requires the parties to make their

expert disclosures “at the times and in the sequence that the court orders.” The third is

Rule 37(c)(1) which states that if a party fails to provide information as required by Rule

26(a) “the party is not allowed to use that information or witness to supply evidence . . . 

unless the failure was substantially justified or is harmless.” It must be noted that

instead of or in addition to this exclusionary sanction a court may impose other

appropriate sanctions.11

B. Testimony Based on the First Report

Both Kritza and Bank contend that the First Report and testimony corresponding

thereto should be excluded. The argument for exclusion of the First Report and related

testimony rests on the asserted failure of Jefferson to disclose the information required

by Rule 26(a)(2)(B). In particular, it is asserted that there was no timely disclosure of all

of Flynn’s opinions, no disclosure of the “basis and reasons” for Flynn’s opinions, no

disclosure of “the facts or data considered by [Flynn]”, and no disclosure of documents

11Fed. R. Civ. P. 37(c)(1)(C).

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Case 2:14-cv-00761-JWS Document 186 Filed 08/07/15 Page 7 of 15
that will be used to “summarize and support” Flynn’s opinions.

Movants’ papers are correct to suggest that the First Report does not disclose all

of Flynn’s opinions. What the First Report says is that if an assumption is made

regarding the duration of a certain signature style then there would be “strong evidence”

of forgery. This is not a complete statement of Flynn’s opinions, for that does not

emerge until the presentation of the Second Report. As the court sees the issues, the

First Report and testimony based on it would not be admissible for the purpose of

showing that any of the questioned documents were forged, because the First Report

does not, and cannot as seen in Flynn’s own conclusions, actually express an opinion

on that issue. In general, the court agrees with Kritza’s argument12 that testimony

based on the First Report is not sufficiently reliable to be admissible under Rule 702

and that any probative value it might conceivably have is substantially outweighed by

the risk of confusing the jury which would require its exclusion under Rule 403. 

Testimony based on the First Report will not be permitted. Thus, the issue becomes

whether under all of the circumstances, testimony based on the Second Report and

associated supplementary materials should be admitted.

B. Testimony Based on the Second Report

The court now considers the Second Report and the various supplementary

documents showing Jefferson’s signatures. One reason Jefferson contends that the

delayed disclosure of the Second Report and supplementary materials does not bar

12Doc. 108 at 10-12.

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Case 2:14-cv-00761-JWS Document 186 Filed 08/07/15 Page 8 of 15
their use is that they were “proper supplements.”13

 Jefferson cites Rule 26(e) and an

Illinois district court case, Talbert v. City of Chicago14 to support this argument.

Jefferson does not elaborate on the proposition that the Second Report and

supplementary materials were a timely supplement to the First Report based on Rule

26(e). An examination of the relevant rules shows that Jefferson’s reliance on Rule

26(e) is unavailing. That rule provides that supplements relating to expert disclosures

must be made by the time disclosures under Rule 26(a)(3) are due. Rule 26(a)(3) in

turn provides for disclosures within 30 days prior to trial unless “the court orders

otherwise.” Here the court did order otherwise when it set the November 14, 2014,

deadline for Jefferson’s expert disclosures.15 The scheduling of expert disclosures by

the court is a common practice and one specifically sanctioned by Rule 26(a)(2)(D). 

Jefferson’s reliance on Talbert is also unavailing. There, the City of Chicago

complained that Talbert’s supplemental report which had to a large extent been

produced at the City’s own request should be excluded. In contrast to the situation

here, in Talbert the supplemental report was not untimely. To the contrary, the parties

in Talbert agreed that there would be a supplemental report with the expert’s deposition

to follow the supplemental report.16 Indeed, in Talbert the judge made a point of

distinguishing a decision by the relevant circuit court in Salgado v. General Motors

13Doc. 137 at 9.

14

236 F.R.D. 415 (N.D. Ill. 2006) (mis-named by Jefferson as “Talbot v. City of

Chicago”).

15Order at doc. 57.

16

236 F.R.D. at 417-18.

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Case 2:14-cv-00761-JWS Document 186 Filed 08/07/15 Page 9 of 15
Corp.,17

 pointing out that in Salgado, the party offering the expert report had not

complied with the court ordered deadline for submitting expert reports. “There is

nothing novel about Salfado’s holding. It is simply an application of the federal court’s

consistent recognition of the importance of adherence to discovery deadlines and of the

broad authority district courts have to deal with deviations from those deadlines.”18

 Rule 37(c)(1) and Ninth Circuit case law19 recognize that untimely disclosed

expert testimony should not be excluded where the failure to timely disclose “was

substantially justified or is harmless.”20 Bank and Kritza’s initial motion papers

persuasively argue that the untimely disclosure of the Second Report and

supplementary materials was not substantially justified. Jefferson’s response does not

include meaningful argument that the late disclosure was substantially justified. 

Jefferson does argue that the delay in disclosing the Second Report and

supplementary materials was harmless. He urges that this is so because defendants

had an opportunity to and did depose Flynn after the Second Report and

supplementary materials were disclosed. Jefferson cites Cloud v. Pfizer, Inc.21in

support of his argument. The pertinent issue in Cloud was whether to strike an affidavit

by plaintiff’s expert filed to support plaintiff’s opposition to Pfizer’s motion to exclude the

expert’s testimony. The court denied the motion to strike for two reasons, the first being

17

150 F.3d 735 (7th Cir. 1998).

18

236 F.R.D at 422-23.

19Yeti by Molly, Ltd. v. Deckers Outdoor Corp., 259 F.3d 1101, 1106-07 (9th Cir. 2001).

20

Fed. R. Civ. P. 37(c)(1).

21

198 F. Supp.2d 118, 1128 (D. Ariz. 2001).

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Case 2:14-cv-00761-JWS Document 186 Filed 08/07/15 Page 10 of 15
that the court had already ruled that the affidavit was timely filed, and the second being

that the affidavit was harmless in light of what Pfizer knew from the expert’s original

report and deposition testimony. Cloud did not involve an effort to have a second or

supplemental expert report considered. It dealt only with the viability of the first and

only expert report, and so offers little support for Jefferson’s position.

Jefferson also relies on Jackson v. Allstate Ins. Co.22 That case supports his

contention that the delay in disclosure was harmless. In Jackson the relevant evidence

included evidence about the location of certain individuals around the time of a fire

which burned Jackson’s home. Allstate retained an expert witness named Levy with

expertise in locating people via cell phone tracking. The appellate court framed the

issue as follows:

Jackson next asserts the district court erred by denying her motion to

exclude Levy’s expert testimony because of a late disclosed supplement

expert report. The record indicates that on December 2, 2013, Jackson

took an extensive deposition of Levy . . . . On the morning of the

deposition Levy conducted a field study of the cell towers located near

Jackson’s house. During the deposition Levy disclosed to Jackson’s

counsel that he had conducted the field study, discussed the

methodologies he utilized, and fully explained the results of the study. 

Approximately two weeks later, Levy provided Jackson with a

supplemental report that summarized the same information Levy

disclosed during his deposition.23

The Jackson court recognized that under Rule 37(c)(1) the supplemental report and

associated testimony was subject to exclusion, but nonetheless affirmed the trial court’s

decision to permit use of Levy’s testimony. The appellate court found the late

22

785 F.3d 1193 (8th Cir. 2015).

23

Id. at 1203-04.

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Case 2:14-cv-00761-JWS Document 186 Filed 08/07/15 Page 11 of 15
disclosure to be harmless because Jackson had deposed Levy on the topic of the field

study, had not sought a supplemental deposition, and failed to identify any information

in the report that took Jackson by surprise.

The next case Jackson cites to show the delay is harmless is Smith v. Tenet

Healthsystem SL, Inc.24 There, plaintiff Smith objected to an expert’s reliance on x-rays

during his trial testimony. The x-rays had not been disclosed in the expert’s report, but

were discussed during his deposition. Given that the x-rays were covered in the

deposition, the court held the omission form the report was harmless.25 This case also

supports Jackson’s argument.

The last case cited by Jackson on this issue is Commonwealth Ins. Co. v. Titan

Tire Corp.26 There, defendant Titan complained about plaintiff’s failure to disclose the

expert opinion of one Robert Ochs. However, as the appellate court explained, Ochs

was the plaintiff’s expert in the underlying lawsuit and Titan had participated in Ochs’

deposition in that case and so he knew the substance of his testimony. The court also

pointed out that Titan knew plaintiff would rely on Ochs expert testimony by virtue of

plaintiff’s interrogatory answers. The facts in Titan are so different from the situation at

bar that the case has no bearing on the motion at hand.

Reduced to its essence, Jefferson’s argument is that the deposition provided an

adequate cure for the failure to timely present the Second Report and associated

24

436 F.3d 879 (8th Cir. 2006).

25

Id. at 889.

26

398 F.3d 879 (7th Cir. 2004).

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Case 2:14-cv-00761-JWS Document 186 Filed 08/07/15 Page 12 of 15
supporting materials. In its memorandum at docket 110, Bank contends that the late

disclosure was not harmless because its “expert rebuttal deadline has passed and

discovery is now closed.”27 Bank did not file a reply memo (although it did join in

Kritza’s reply). Kritza correctly notes in his opening memorandum that the burden is on

Jefferson to show that the late disclosure was not harmless, citing ninth Circuit case law

on point.28 However, Kritza did not specifically address how the late disclosure harmed

Kritza. Kritza’s reply memo addresses the topic of harm as follows: 

While being able to depose Flynn helps, it is not a complete cure to the

prejudice resulting from the untimely disclosure. The biggest problem is

that Kritza has no way to rebut the Second Report under the Court’s

scheduling order.29

Kritza also makes the point that “the disruption of the scheduling order can hardly be

considered harmless.”30 Kritza goes on to note that disrupting the schedule will

ultimately effect how soon trial may be had and the case resolved.

The court finds that Jefferson’s late disclosure of the Second Report and

supplementary documents was not substantially justified. The court also finds that the

extensive deposition of Flynn taken after disclosure of the late materials obviates most

of the harm to Bank and Kritza. The most significant harm which the deposition does

not eliminate is the opportunity Bank and Kritza should have to secure their own expert 

witnesses whose testimony might rebut that of Flynn.

27Doc. 110 at 7.

28Doc. 108 at 8 (citing Yeti by Molly, 259 F.3d at 1107).

29Doc. 145 at 6.

30

Id.

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Case 2:14-cv-00761-JWS Document 186 Filed 08/07/15 Page 13 of 15
As noted above, Rule 37(c)(1), on which Bank and Kritza primarily rely,

authorizes the court to exercise its discretion to impose sanctions other than exclusion

of evidence. In the exercise of its discretion here, the court is mindful of the fact that

establishing the existence of forgeries is central to Jefferson’s position, and Flynn’s

opinions would support Jefferson’s own testimony that the signatures he disputes are

not his own. Under these circumstances and although the court is not sanguine about

re-opening the pre-trial schedule for the limited purpose of allowing Bank and Kritza to

retain their own (or perhaps a single joint) expert witness to rebut Flynn, that resolution

would eliminate all of the harm from the late disclosures save disruption to the pre-trial

schedule. In order to assure that the parties’ claims and defenses are decided on the

merits, the court will extend the pre-trial schedule as follows: Bank and Kritza shall have

the opportunity to jointly retain a witness (or if they prefer each to retain a witness) to

rebut Flynn’s report. A rebuttal witness report or reports shall be provided to Jefferson

within 42 days from the date of this order. The rebuttal witness or witnesses shall be

deposed within 56 days from the date of this order. Questioning by Jefferson’s counsel

shall be limited to 2 hours for each (or the single joint) rebuttal witness.

As an appropriate sanction under Rule 37(c)(1) in lieu of excluding Flynn’s

testimony, Jefferson shall pay the reasonable attorney fees incurred by Bank and Kritza

in connection with their motions at docket 108 and 110. The court encourages counsel

to confer and stipulate to the amount of such fees. If counsel cannot agree, then Bank

and Kritza may each file a properly supported motion for fees within 21 days from the

date of this order; Jefferson shall respond within 7 days from the filing of each such

motion; and Bank and Kritza may reply within 7 days from the filing of Jefferson’s

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Case 2:14-cv-00761-JWS Document 186 Filed 08/07/15 Page 14 of 15
response to its motion. If a motion for attorney fees is made, it may include the attorney

fees associated with preparing the motion for fees itself, as well as the attorney fees

associated with either the motion at docket 108 or the motion at docket 110. If a reply

is filed, the attorney fees associated with the reply may not be included in the total

sought. Jefferson may contest the quantum of, but not the right to recover, attorney

fees in his response. 

IV. CONCLUSION

For the above reasons, the motions at dockets 108 and 110 are DENIED, and

IT IS FURTHER ORDERED:

(1) Jefferson shall pay Bank and Kritza their reasonable attorney fees

incurred in connection with the motions at dockets 108 and 110, and if the

parties cannot agree on the appropriate amount of fees and so advise the

court in a stipulation, Bank and Kritza shall file a motion for attorney fees

within 21 days from the date of this order, Jefferson shall respond within 7

days from the filing of each motion, and Bank and Kritza may reply within

7 days from the filing of the response to its motion;

(2) Bank and Kritza may each retain expert witnesses, or preferably will

jointly retain a single expert witness, to rebut the testimony of William

Flynn and such expert’s or experts’ report(s) shall be provided to Jefferson

within 42 days from the date of this order.

(3) The expert or experts retained by Bank and Kritza may be deposed by

Jefferson within 56 days from the date of this order. Jefferson’s

examination at deposition shall be limited to 2 hours for each expert or the

single joint expert.

DATED this 6th day of August 2015.

 /S/ 

JOHN W. SEDWICK

UNITED STATES DISTRICT JUDGE

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