1 

UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF OHIO 

EASTERN DIVISION 

PENN, LLC, et al., 

 

 Plaintiffs, Case No. 2:10-cv-0993 

 JUDGE GREGORY L. FROST 

 v. Magistrate Judge Terence P. Kemp 

 

PROSPER BUSINESS DEVELOPMENT 

CORPORATION, et al., 

 Defendants.

 

OPINION AND ORDER 

 This matter is before the Court on several motions in limine filed by Plaintiffs (ECF Nos. 

248, 249, 251, and 252) and Defendants’ consolidated opposition to all of them (ECF No. 253). 

For the reasons set forth below, the Court DENIES all of Plaintiffs’ motions in limine. 

I. 

Neither the Federal Rules of Evidence nor the Federal Rules of Civil Procedure explicitly 

authorize a court to rule on an evidentiary motion in limine. The United States Supreme Court 

has noted, however, that the practice of ruling on such motions “has developed pursuant to the 

district court’s inherent authority to manage the course of trials.” Luce v. United States, 469 U.S. 

38, 41 n.4 (1984). The purpose of a motion in limine is to allow a court to rule on issues 

pertaining to evidence in advance of trial in order to avoid delay and ensure an even-handed and 

expeditious trial. See Ind. Ins. Co. v. Gen. Elec. Co., 326 F. Supp. 2d 844, 846 (N.D. Ohio 2004) 

(citing Jonasson v. Lutheran Child & Family Servs., 115 F.3d 436, 440 (7th Cir. 1997)). 

Notwithstanding this well-meaning purpose, courts are generally reluctant to grant broad 

exclusions of evidence in limine, because “a court is almost always better situated during the 

actual trial to assess the value and utility of evidence.” Koch v. Koch Indus., Inc., 2 F. Supp.2d 

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1385, 1388 (D. Kan 1998); accord Sperberg v. Goodyear Tire & Rubber Co., 519 F.2d 708, 712 

(6th Cir. 1975). 

To obtain the exclusion of evidence under such a motion, a party must prove that the 

evidence is clearly inadmissible on all potential grounds. See Ind. Ins. Co., 326 F. Supp. 2d at 

846; Koch, 2 F. Supp. 2d at 1388; cf. Luce, 469 U.S. at 41. “Unless evidence meets this high 

standard, evidentiary rulings should be deferred until trial so that questions of foundation, 

relevancy and potential prejudice may be resolved in proper context.” Ind. Ins. Co., 326 F. 

Supp.2d at 846. Denial of a motion in limine does not necessarily mean that all evidence 

contemplated by the motion will be admitted at trial. Denial merely means that without the 

context of trial, the court is unable to determine whether the evidence in question should be 

excluded. Id. The court will entertain objections on individual proffers as they arise at trial, 

even though the proffer falls within the scope of a denied motion in limine. Id. (citing United 

States v. Connelly, 874 F.2d 412, 416 (7th Cir. 1989)). 

II. 

A. Motion to Exclude Claims that Penn is a “Spammer” and to Exclude Testimony 

Regarding Penn’s E-mail Network 

Penn’s first motion in limine asks the Court to prohibit Defendants from introducing any 

testimony asserting that Penn is a “spammer” and that Penn “has no email network.” (ECF No. 

248.) Penn contends that the “briefs and depositions” in this case indicate that Defendants will 

try “to cast Penn in a negative light,” despite the fact that Penn has not been charged with 

violating any anti-spamming laws. (Id. at PageID# 12920.) 

Penn’s first basis for exclusion is a “res judicata” argument. In an earlier arbitration 

between these parties, the arbitrator found that Penn’s email network was at no time denied to 

Big Research. (Id. at PageID# 12922 (citing Arbitration Award, ECF No. 84-4).) Penn also 

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notes that the arbitrator “found there was no evidence to suggest that Penn was a spammer.” (Id.

at PageID# 12923.) Citing the doctrine of res judicata, Penn argues that the Court should 

preclude Defendants from introducing evidence that Penn was a “spammer” or that Penn’s email 

network was somehow unavailable for Big Research’s activities. 

Penn’s “res judicata” argument is misplaced. Generally speaking, res judicata principles 

bar relitigation of claims (claim preclusion) that were or could have been litigated in a prior 

litigation or issues (issue preclusion) that were fully litigated in a prior litigation between the 

same parties. See generally Migra v. Warren City Sch. Dist. Bd. of Edn., 465 U.S. 75, 77 n.1 

(1984). The res judicata doctrine does not bar evidence relevant to a claim or issue in a case. 

In addition, Penn argues that any evidence of Penn being a “spammer” is not relevant to 

the claims at issue in this case and is “prejudicial.” Penn contends that such evidence has no 

probative value and, even if it did, such value is substantially outweighed by unfair prejudice 

because “spammer” has a negative connotation in today’s internet age. Penn therefore argues 

that the evidence is barred by Fed. R. Evid. 403. 

The Court sees no reason for an in limine order barring such evidence. Penn contends 

that this case “is about the breaches of fiduciary duties owed by Defendants to Big Research and 

Penn.” (ECF No. 248 at PageID# 12925.) While that may be true, Defendants are also correct 

that they should be allowed to present evidence concerning the reasons they took some of the 

actions they took, including Defendants’ belief that Penn had engaged in spamming activities 

and failed to make its email network available for Big Research’s activities. The complaints 

Penn raises regarding Defendants’ anticipated evidence are matters appropriately addressed in 

cross-examination. 

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Accordingly, the Court DENIES Plaintiffs’ motion to exclude testimony claiming that 

Penn is a “spammer” or testimony regarding the unavailability of Penn’s email network. 

B. Motion to Exclude All References to Plaintiffs’ Former RICO Claim 

Penn’s second motion in limine asks the Court to exclude any reference during trial to 

Plaintiffs’ previously-dismissed claim brought under the Racketeer Influenced and Corrupt 

Organization Act (“RICO”). (ECF No. 249.) The Court denies this motion. 

Plaintiffs’ Complaint alleged a RICO claim, which this Court dismissed in a prior order. 

(ECF No. 31.) Plaintiffs’ complain that “[e]ven though this claim has been dismissed by this 

Court, Defendants continuously bring up the fact that Plaintiffs filed a RICO claim even though 

this issue is no longer before this Court.” (ECF No. 249 at PageID# 12930.) Plaintiffs claim that 

it would be “highly prejudicial” to permit Defendants to “state or imply, directly or indirectly, 

that the mere fact of the bringing of the claim is somehow in violation of law or such filing 

constitutes improper conduct by Penn or its former or current counsel.” (Id. at PageID# 12930-

31.) 

The Court rejects Plaintiffs’ argument. This Court previously denied Plaintiffs’ motion 

for summary judgment on Defendants’ counterclaims alleging abuse of process. Penn’s filing of 

a RICO claim in this matter is probative of Defendants’ theory of abuse of process liability. The 

inclusion of a RICO claim in the Complaint is relevant to Defendants’ allegation that Penn 

brought the instant lawsuit with the improper ulterior purposes of (1) leveraging a more 

favorable settlement of an action then pending in state court and (2) seeking to disqualify 

Prosper’s trial attorney and his law firm from representing Prosper in this action. Even indulging 

Penn’s argument that mere mention of the RICO claim is “prejudicial,” the Court does not view 

such evidence as unfairly prejudicial for purposes of Fed. R. Evid. 403. 

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Accordingly, the Court DENIES the motion in limine to exclude all references to 

Plaintiffs’ former RICO claim. 

C. Motion to Exclude Testimony Relating to Steve Denari and TMG Resources and 

Testimony Regarding Penn’s Ownership and Operations 

Plaintiffs’ third motion in limine seeks to exclude any testimony regarding Penn’s 

association with Steve Denari and TMG Resources, Inc. (“TMG”), as well as any testimony 

regarding the operation of Penn’s business, Penn’s members, and Penn’s operating agreement. 

(ECF No. 251.) Plaintiffs argue that such evidence is not relevant to this case and therefore 

inadmissible under Fed. R. Evid. 402. 

By way of background, Denari is the president of TMG; TMG was a member of Penn, 

LLC as of January 1, 2004. In September 2008, Denari became Penn’s designee to Big 

Research’s Board of Members and remained a member until Penn removed him in November 

2009. By January 2010, TMG was no longer a member of Penn. Later that year, Denari filed an 

Illinois state court lawsuit against Drenik, Rist, and Prosper, alleging defamation. Penn was not 

a party to that lawsuit. In its motion in limine, Plaintiffs complain that Defendants “have 

attempted to link conduct, reputation or acts by Mr. Denari or TMG to Penn.” (ECF No. 251 at 

PageID# 12937.) 

The Court denies Plaintiffs’ motion, as it is unable to render a broad exclusion of the type 

sought by Plaintiffs. The dispute over the evidence Plaintiffs seek to exclude is best resolved in 

the context of trial. Defendants’ opposition to Plaintiffs’ motion in limine sets forth at least four 

plausible arguments supporting the relevance of evidence related to Denari’s association with 

Penn and, by extension, the operation of Penn’s business. Defendants argue— 

 Denari’s “checkered past” and business activities that were in direct competition with 

Big Research are relevant “to place in context” the animosity between Penn and 

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Defendants and to Defendants’ contention that Penn’s placement of Denari on the Big 

Research Board was a breach of fiduciary duty; 

 Denari’s association with Penn is relevant to challenge the credibility of the valuation 

testimony by Jaffer Ali (Penn’s CEO) because the value Penn placed on TMG’s 

ownership interest in Penn is “directly relevant” to how Penn and TMG valued 

Penn’s ownership interest in Big Research; 

 Denari and Ali voted jointly to reject Big Research’s budgets in 2009 and 2010 and 

retroactively rejected all budgets for 2004 through 2008; and 

 Denari’s association with Penn may be relevant to place in context the decision of 

Robert Kamerschen to withdraw from Big Research, a decision that led to the 

dissolution of Big Research. 

Given Defendants’ arguments for relevance, the Court cannot, at this juncture, conclude 

that evidence regarding Penn’s operation and Penn’s association with Denari is “clearly 

inadmissible on all potential grounds.” See Ind. Ins. Co., 326 F. Supp. 2d at 846. The 

admissibility of the challenged evidence is a determination better left to the context of trial. The 

Court therefore DENIES Plaintiffs’ motion in limine to exclude the Denari evidence and 

testimony regarding Penn’s ownership and operations. 

D. Motion to Exclude Prior Settlement Discussions or to Bifurcate 

Plaintiffs’ final motion in limine asks the Court to exclude any evidence related to “prior 

settlement negotiation” between the parties. In the alternative, Plaintiffs ask the Court to 

bifurcate the trial so that the challenged evidence is admitted solely in connection with 

proceedings addressing Defendants’ counterclaims. 

The evidence Plaintiffs seek to exclude relates to Defendants’ abuse of process 

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counterclaim. Defendants allege that Attorney Richard Cochran, who previously represented 

Penn, threatened that if Big Research did not settle a then-pending state court action on terms 

favorable to Penn, then Penn would file a federal court lawsuit against not only the Defendants 

named here, but also against Prosper attorney James Arnold and his law firm. Consistent with 

Defendants’ theory, when the state court issued its decision modifying an arbitration award to 

reduce Penn’s damage award, Plaintiffs filed this action, naming Attorney Arnold and his law 

firm as Defendants. And then, following the filing of this lawsuit, Defendants contend that 

Attorney Cochran repeated his demand that Big Research settle the state court cases on terms 

favorable to Penn in exchange for Penn dismissing this case. Defendants argue that these actions 

by Attorney Cochran on behalf of Penn are an abuse of process in that they were an attempt to 

bully Defendants into giving Penn more money than it was legally entitled to receive in the state 

court action. 

 Plaintiffs’ primary argument for exclusion of “settlement discussions” evidence falls 

under Fed. R. Civ. P. 408. Rule 408 states: 

(a) Prohibited Uses. Evidence of the following is not admissible--on behalf of any 

party--either to prove or disprove the validity or amount of a disputed claim or to 

impeach by a prior inconsistent statement or a contradiction: 

(1) furnishing, promising, or offering--or accepting, promising to accept, or 

offering to accept--a valuable consideration in compromising or attempting 

to compromise the claim; and 

 

(2) conduct or a statement made during compromise negotiations about the 

claim--except when offered in a criminal case and when the negotiations related 

to a claim by a public office in the exercise of its regulatory, investigative, or 

enforcement authority. 

 

(b) Exceptions. The court may admit this evidence for another purpose, such as 

proving a witness's bias or prejudice, negating a contention of undue delay, or 

proving an effort to obstruct a criminal investigation or prosecution. 

 

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Plaintiffs argue that all of the discussion between Attorneys Arnold and Cochran, the 

substance of which supports Defendants’ abuse of process theory of liability, came during the 

context of settlement, triggering the exclusion set forth in Rule 408. The Court, however, has 

already rejected Plaintiffs’ position. In denying Plaintiffs’ motion for summary judgment on 

Defendants’ abuse of process counterclaims, the Court stated: 

Rule 408 prohibits the admissibility of any conduct or statement made in 

settlement negotiations to prove or disprove the validity or amount of a disputed 

claim. Defendants are not using Attorney Cochran’s statements to prove or 

disprove the validity or amount of a disputed claim in this case. Rather, 

Defendants are using Cochran’s statements to demonstrate the ulterior motive 

underlying this lawsuit, namely, the alleged motive of trying to leverage more 

favorable terms in a settlement of a state-court lawsuit. 

(ECF No. 254, at PageID# 12986.) Based on the purpose for which Defendants would offer the 

evidence of Cochran’s so-called settlement communications in this case, Rule 408 does not come 

into play. See Evans v. Troutman, 817 F.2d 104, 1987 WL 37221, at *3 (6th Cir. Apr. 29, 1987) 

(“Rule 408 is intended to encourage settlement of suits by forbidding a party from pointing to her 

opponent’s settlement offer as proof that the opponent thought he would lose.”). 

 Nor is the evidence inadmissible under Fed. R. Evid. 403. Attorney Cochran’s 

statements go to the heart of the abuse of process counterclaims. Assuming that Defendants are 

able to elicit testimony about Cochran’s communications at trial, such evidence would be highly 

relevant to Defendants’ theory that Penn continued its pursuit of this lawsuit with an ulterior 

motive of leveraging a more favorable outcome in the earlier state court lawsuit. There is 

nothing unfairly prejudicial about the jury hearing the evidence that underlies the abuse of 

process counterclaim. 

 In the alternative, Plaintiffs ask that the trial be bifurcated, such that the “settlement” 

evidence would be introduced only in proceedings related to Defendants’ counterclaims. Under 

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Fed. R. Civ. P. 42(b), a district court has discretion to order a separate trial of any “claims, 

crossclaims, counterclaims, or third-party claims” for purposes of avoiding prejudice to a party. 

Plaintiffs argue that to permit disclosure of settlement discussions “could unfairly prejudice the 

jury.” (ECF No. 252, at PageID# 12956.) 

 Plaintiffs’ request for bifurcation is lukewarm at best and entirely unconvincing. 

Bifurcation is the exception, not the rule: as a general rule, disputes should be resolved in a 

single proceeding and a district court should bifurcate only in exceptional cases. See Chubb 

Custom Ins. Co. v. Grange Mut. Cas. Co., No. 2:07-cv-1285, 2008 WL 4823069, at *2 (S.D. 

Ohio Nov. 3, 2008). Plaintiffs have not demonstrated how this is the exceptional case where 

bifurcation is appropriate. There is significant factual overlap between Defendants’ 

counterclaims and Plaintiffs’ claims, meaning that bifurcation would only result in a second trial 

that may be largely repetitive of the first one. 

 Further, the Court is not convinced that Plaintiffs would be unduly prejudiced if 

Defendants are able to introduce the evidence of “settlement negotiations” that underlie 

Defendants’ abuse of process counterclaim. Plaintiffs contend that the evidence would have “the 

very real effect of misleading the jury into believing that an offer of settlement correlates with 

the real extent of damages at issue.” (ECF No. 252 at PageID# 12955.) The Court does not have 

as little faith in the potential jurors as Plaintiffs do. The premise of Defendants’ abuse of process 

counterclaims is that Penn (through the communications of Attorney Cochran) was trying to 

extract a more favorable settlement in the previously pending state court action through the 

threat and ultimate pursuit of this lawsuit. The settlement evidence that would be presented to 

the jury would therefore relate to the supposed extent of damages in the state court suit and not 

this one. While this case involves a complex commercial dispute that may pose some challenges 

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for the jury, the Court does not view the evidence of Attorney Cochran’s settlement 

communications as an aspect of the case that poses a danger of misleading the jury. 

 The Court therefore DENIES Plaintiffs’ motion in limine to exclude settlement 

discussions or to bifurcate proceedings. 

III. 

For the foregoing reasons, the Court DENIES each of Plaintiffs’ motions in limine. 

(ECF Nos. 248, 249, 251, 252.) As with all decisions in limine, this ruling is subject to 

modification should the facts or circumstances at trial differ from that which has been presented 

in the pretrial motions and memoranda. 

IT IS SO ORDERED. 

 /s/ Gregory L. Frost 

 GREGORY L. FROST 

 UNITED STATES DISTRICT JUDGE

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