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26 ORDER GRANTING IN PART AND DENYING 

IN PART PLAINTIFF’S MOTION IN LIMINE- 1

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF WASHINGTON

AT SEATTLE

MIKE KREIDLER, 

Plaintiff,

v.

DANNY L. PIXLER, et al.,

Defendants.

Case No. C06-0697RSL

ORDER GRANTING IN PART AND

DENYING IN PART PLAINTIFF’S

MOTION IN LIMINE

This matter comes before the Court on plaintiff’s motion in limine to preclude the

introduction of various evidence. As an initial matter, plaintiff requests that the Court

exclude several categories of evidence to which defendants do not object, including (1)

evidence of settlement offers and related issues under Federal Rule of Evidence 408, (2)

the display of any trial exhibit before the Court has admitted it into evidence or given

permission to display it, (3) any documents or records that were not produced in

discovery, and (4) any statement or suggestion that the parties filed motions in limine and

sought to exclude evidence. Those requests are consistent with the Federal Rules of

Evidence, they are granted, and the exclusions apply to all parties. At the parties’ request,

the Court heard oral argument in this matter on April 12, 2010.

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1

 During oral argument, defense counsel referred to a second bankruptcy-related

document that was generated by the trustee. Because the parties did not address that

document in their memoranda, the Court will not address it here. Rather, this order

addresses only the proof of claim filed by plaintiff.

ORDER GRANTING IN PART AND DENYING 

IN PART PLAINTIFF’S MOTION IN LIMINE- 2

A. Bankruptcy-Related Evidence: Defendants’ Witnesses Battista, Rice, and

Feltman and Documents Regarding the Bankruptcy.

Plaintiff seeks to exclude the testimony of three witnesses they claim were not

timely disclosed by defendants: Paul Battista and Arthur Rice, attorneys in Florida

involved with the Certified bankruptcy, and James Feltman, the bankruptcy trustee in

Florida. Defendants have indicated that they will testify regarding the Certified

bankruptcy, the discharge of ASRC, and the proof of claim filed by the insurance

commissioner. The Court will not exclude the witness based on their late disclosure

because plaintiff has not shown that the failure to disclose them in a timely manner was

anything more than harmless. See, e.g., Yeti by Molly, Ltd. v. Deckers Outdoor Corp.,

259 F.3d 1101, 1106 (9th Cir. 2001) (explaining that a violation of Rule 26 may result in

sanctions under Rule 37 unless the proffering party can show that it had a substantial

justification for its failure, or that its failure was harmless). Rather, plaintiff has been

aware of the bankruptcy proceedings and related issues since the inception of this lawsuit.

Plaintiff also contends that in addition to failing to timely disclose the witnesses,

their testimony is not relevant. Plaintiff notes that this Court has ruled that the

bankruptcy proceeding does not have res judicata or collateral estoppel effect in this case,

and it does not preclude plaintiff from pursuing claims against the Huffs, Pixler, or

Midwest. Order on Motion for Summary Judgment at pp. 8-9. However, plaintiff’s proof

of claim is relevant to plaintiff’s valuation of Cascade’s damages.1

 The Court has already

held that plaintiff is not estopped from seeking damages in excess of the proof of claim,

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26 ORDER GRANTING IN PART AND DENYING 

IN PART PLAINTIFF’S MOTION IN LIMINE- 3

so estoppel will not apply. The document is not unduly prejudicial. Therefore,

defendants may introduce the document and call one witness to explain what it is. Any

additional presentation of testimony regarding the document would be unnecessary and

cumulative.

Other than the proof of claim document and an explanation thereof, any other

information and testimony about the bankruptcy proceedings is only marginally relevant

at best. Plaintiff is not pursuing claims against ASRC and Certified, so their bankruptcy

proceedings are irrelevant. Furthermore, extended testimony regarding the bankruptcy

proceedings will confuse the jury. The parties should also consult with each other and

draft a brief proposed instruction about the nature of the bankruptcy proceeding for the

Court to read to the jury when defendants seek to introduce the proof of claim.

B. Limitations on Anthony Huff’s Trial Testimony.

Plaintiff seeks to preclude Anthony Huff from testifying regarding excluded

claims, defenses, and documents. Plaintiff also notes that Huff “has a strong tendency to

voice his views and blurt out whatever he wants to say, including patently inadmissible

hearsay, regardless of whether these comments are even responsive to a question.” 

Plaintiff’s Motion at p. 11. For that reason, plaintiff wants the Court to order Huff “not to

make any off-hand statements or comments as to any matters which have been excluded

by the Court.” Id. All witnesses are precluded from testifying about matters that have

been excluded, and counsel are expected to advise their witnesses that such issues should

not be discussed during their trial testimony. Plaintiff also lists six other categories of

testimony, including hearsay, that he believes Huff might attempt to testify about. The

Court will not issue an advisory ruling on what Huff may and may not say. Rather,

plaintiff can object if warranted when and if such testimony arises. 

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26 ORDER GRANTING IN PART AND DENYING 

IN PART PLAINTIFF’S MOTION IN LIMINE- 4

C. Evidence Regarding Anderson’s and Cascade’s Alleged Wrongdoing.

Plaintiff seeks to preclude defendants from introducing any evidence that Cascade

and/or its former president and CEO, Harold Anderson, made any misrepresentations or

nondisclosures prior to the sale of the company to a third party, Gudeman & Weiss

(“G&W”). Specifically, defendants contend that Anderson misrepresented and failed to

disclose various facts to the purchasing entity and to Danny Pixler, including (1) the

financial condition of Cascade and its profitability, (2) Cascade’s liability in an unrelated

lawsuit, (3) the valuation of a Cascade subsidiary, Allied Pacific Adjusting Group, Inc.,

(4) the status of Cascade’s California workers’ compensation insurance license, and (5)

Cascade’s Board of Directors’ agreement not to contest any attempt by the OIC to place

Cascade into receivership. Defendants contend that Cascade and Anderson were

negligent and had “unclean hands,” which caused Cascade’s damages.

Although defendants contend that plaintiff’s own misrepresentations caused

Cascade’s damages, they have not explained that theory. Even if the alleged

misrepresentations damaged defendants, they have not explained how they damaged

Cascade. Instead, the crux of defendants’ misrepresentation-related defenses is that if

they had known the true facts, they would not have invested money to assist G&W in

purchasing Cascade. The Court has already ruled, however, that defendants lack standing

to assert claims based on the alleged misrepresentations regarding the stock purchase

agreement. Order Denying Motion to File Third Party Complaint (Dkt. #81) at pp. 3-4

(explaining that defendants were neither parties to the purchase agreement nor third party

beneficiaries of the contract). In a separate order, the Court struck defendants’

affirmative defenses for fraudulent misrepresentation and non-disclosures by Cascade

and/or Legend Holdings and their request for a set-off against plaintiff. Order Granting in

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26 ORDER GRANTING IN PART AND DENYING 

IN PART PLAINTIFF’S MOTION IN LIMINE- 5

Part and Denying in Part Motion to Strike (Dkt. #178) at p. 5 (holding that defendants

could not assert claims based on fraud and misrepresentation in connection with the stock

purchase agreement). Although defendants now seek to introduce the same alleged

misrepresentations via other defenses, the Court’s prior rulings precluded evidence of the

misrepresentations, regardless of the name defendants give the defense. Moreover,

plaintiff has explicitly stated that he does not plan to argue that defendants’ actions

caused the insolvency, failure, or collapse of Cascade. (Dkt. #229 at p. 3). For that

reason, defendants do not need to counter that Anderson’s or Legend’s actions actually

caused the collapse. Accordingly, the Court will preclude defendants from introducing

any evidence regarding the alleged misrepresentations of Anderson or Legend in

connection with the stock purchase agreement.

Nor can defendants “impute” Anderson’s alleged wrongful conduct to Cascade as

they contend. Defendants rely on Post v. Maryland Casualty Co., 2 Wn. 2d 21 (1939) for

the proposition that “Washington law has long permitted the fault of corporate officers to

be imputed to the receiver who steps in the shoes of the corporation.” Defendants’

Response at p. 11. The Post case, however, does not stand for that broad proposition. 

Rather, the court explained, “It is elementary that one seeking the benefits of a contract

cannot escape its burdens.” Post, 2 Wn. 2d at 31 (explaining that the receiver, suing on a

bond, “has no other or greater right to recover on the bond that the corporations (the

obligees) would have had.”). In this case, plaintiff is not suing to recover on the stock

purchase agreement, so Anderson’s alleged misconduct related to that contract should not

be imputed to the receiver.

Plaintiff also seeks to exclude evidence that the Office of the Insurance

Commissioner (“OIC”) monitored the purchase and insurance transactions, that it was

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26 ORDER GRANTING IN PART AND DENYING 

IN PART PLAINTIFF’S MOTION IN LIMINE- 6

aware of Midwest’s and Huff’s roles in the transaction, that the OIC failed to advise

defendants that Cascade consented to receivership, and that the OIC approved of the Risk

Allocation Agreement. By previous order, the Court struck defendants’ affirmative

defense of estoppel. Specifically, defendants contended that plaintiff should be estopped

from asserting its claim because the OIC “failed to inform the Defendants that the Board

of Directors of Cascade had consented to a receivership proceeding, did not qualify for

admission into California without the posting of unrealistically large amounts of capital

and as a result could not continue to write new insurance business in California and was

improperly capitalized.” Defendants’ Answer (Dkt. #133) at p. 15. The Court struck the

affirmative defense because, among other reasons, defendants failed to show that the OIC

owed them any duty of disclosure. Order Granting in Part and Denying in Part Motion to

Strike (Dkt. #178) at p. 5. The order also precluded defendants from asserting a defense

based on the OIC’s alleged misconduct. Id. at p. 6. Therefore, defendants cannot assert

an estoppel or failure to disclose defense. However, the Court has not previously

addressed whether defendants can present evidence regarding the OIC’s alleged

knowledge of the facts that it contends defendants misrepresented. If plaintiff argues that

it was unaware of certain facts, then defendants may introduce evidence to show its

knowledge.

Finally, defendants seek to introduce evidence that Anderson knew about Huff’s

role in the transaction and about the other matters that plaintiff claims defendants failed to

disclose. If plaintiff were alleging a simple breach of contract, the evidence might not be

relevant. However, because plaintiff is also alleging fraud in the inducement, the

knowledge of Cascade’s president and CEO at the time are relevant to that claim. See,

e.g., Second Amended Complaint at ¶ 9.20 (alleging that if defendants had made truthful

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2

 The Court notes that the findings and conclusions in this order, like all rulings in

limine, are preliminary and can be revisited at trial based on the facts and evidence as

they are actually presented. See, e.g., Luce v. United States, 469 U.S. 38, 41 (1984)

(explaining that a ruling in limine “is subject to change when the case unfolds,

ORDER GRANTING IN PART AND DENYING 

IN PART PLAINTIFF’S MOTION IN LIMINE- 7

disclosures, Cascade would not have entered into the transaction). Accordingly,

defendants will be permitted to introduce evidence regarding whether Anderson was

aware of the matters that plaintiff claims defendants misrepresented.

D. Evidence Regarding Plaintiff’s Suit Against Anderson.

Plaintiff seeks to exclude evidence that it brought suit against Anderson alleging

negligence and ultimately settled the matter. Defendants have stated that they do not plan

to introduce any evidence that Anderson settled the lawsuit with plaintiff. Defendants’

Response at p. 14. However, defendants seek to introduce the complaint plaintiff filed

against Anderson as a statement against interest. On that basis, the complaint is

admissible under Federal Rule of Evidence 801(d)(2). It represents an admission that at

least at one point, plaintiff believed that Anderson was aware of the facts that defendants

allegedly misrepresented or failed to disclose. Accordingly, the complaint is relevant and

admissible.

E. Economic Loss Rule.

In response to plaintiff’s motion in limine, Pixler argues that plaintiff’s tort claims

are barred by the economic loss rule. Pixler notes that after he obtained new counsel, his

current counsel moved to reopen the dispositive motion deadline to assert that argument. 

The Court denied the motion. (Dkt. #227). Having denied the motion, the Court will not

entertain Pixler’s request, via a response to a motion in limine, to dismiss the tort claims.

For all of the foregoing reasons, plaintiff’s motion in limine (Dkt. #215) is

GRANTED IN PART AND DENIED IN PART as set forth above.2

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particularly if the actual testimony differs from what was contained in the proffer. Indeed

even if nothing unexpected happens at trial, the district judge is free, in the exercise of

sound judicial discretion, to alter a previous in limine ruling.”). Subject to these

principles, the Court issues this ruling for the guidance of the parties.

ORDER GRANTING IN PART AND DENYING 

IN PART PLAINTIFF’S MOTION IN LIMINE- 8

During oral argument, defense counsel requested that the Court clarify when the

trial will conclude. Based on the representations of counsel and the Court’s assessment of

the case, the Court anticipates that it will submit the case to the jury no later than

Wednesday, May 19, 2010.

DATED this 15th day of April, 2010.

A

Robert S. Lasnik

United States District Judge

Case 2:06-cv-00697-RSL Document 265 Filed 04/15/10 Page 8 of 8