Court Opinion

ID: 3147757
Source: CourtListenerOpinion
Date Created: 2015-10-22 18:36:49.000842+00
Date Added: 2024-06-11T12:10:38.606604
License: Public Domain

ILLINOIS OFFICIAL REPORTS
                                          Appellate Court

            Citibank, N.A. v. McGladrey & Pullen, LLP, 2011 IL App (1st) 102427

Appellate Court              CITIBANK, N.A., Successor by Merger to CITIBANK, F.S.B.,
Caption                      Plaintiff-Appellant, v. McGLADREY AND PULLEN, LLP, an Iowa
                             Limited Liability Partnership, Defendant-Appellee.

District & No.               First District, Second Division
                             Docket No. 1–10–2427

Filed                        June 14, 2011

Held                         In a bank's action alleging that defendant accounting firm was negligent
(Note: This syllabus         in conducting the audit the bank relied on in making a loan to a
constitutes no part of the   physician with a surgical practice who absconded with the proceeds of
opinion of the court but     the $1.4 million loan, the trial court did not err in granting defendant's
has been prepared by the     motion in limine to bar the testimony of a senior marketing director
Reporter of Decisions for    from a consulting firm the bank engaged to offer a professional opinion
the convenience of the       regarding defendant's audit as to the opinions of the consulting firm's
reader.)                     health care specialists who examined the files of the surgical practice
                             and in denying the bank's motion in limine to exclude any evidence of
                             the bank's contributory negligence unrelated to the loan at issue, since
                             the consulting firm's director admitted he was not qualified to read a
                             patient's medical chart, his testimony would be "parroting" the opinions
                             and conclusions of the firm's health care specialists that were beyond his
                             ken, and the evidence relating to the bank's lending decisions with the
                             physician and his practice other than the loan at issue was relevant to
                             the issue of causation and reliance and was therefore admissible.
 Decision Under              Appeal from the Circuit Court of Cook County, No. 05–L–13222; the
 Review                      Hon. Daniel J. Lynch, Judge, presiding.

 Judgment                    Affirmed.

 Counsel on                  Quarles & Brady LLP, of Chicago (Leonard Shifflett, Thomas J. Magill,
 Appeal                      and Anthony P. Steinike, of counsel), for appellant.

                             Williams & Connolly LLP, of Chicago (Edward J. Bennett, Charles
                             Davant IV, and Thomas P. Windom, of counsel), for appellee.

 Panel                       JUSTICE KARNEZIS delivered the judgment of the court, with
                             opinion.
                             Presiding Justice Cunningham and Justice Harris concurred in the
                             judgment and opinion.

                                               OPINION

¶1           Plaintiff Citibank, N.A., successor by merger to Citibank, F.S.B., appeals the circuit
         court’s judgment in favor of defendant McGladrey & Pullen, LLP, an Iowa limited liability
         partnership. Citibank contends on appeal that the circuit court’s pretrial rulings on two
         motions in limine were in error and a new trial is required as a result of the error. We affirm
         the judgment of the circuit court.

¶2                                             Background
¶3           In this case, Citibank seeks to recover money it loaned to Dr. Mark S. Weinberger, an ear,
         nose and throat (ENT) surgeon, who absconded to Europe with the proceeds of a $1.4 million
         term loan from Citibank.1 Citibank seeks to recover its money by suing McGladrey for its
         negligent audit of Dr. Weinberger’s surgical practice, Subspecialty Centers of America, LLC
         (SCA). Citibank claims that it relied on McGladrey’s audit in making the $1.4 million term
         loan to SCA.

         1
         Dr. Weinberger was subsequently located residing in a tent in the Italian Alps and was brought back
to the United States in 2010. Hundreds of malpractice suits were filed against him and federal prosecutors
charged him with multiple counts of health care fraud.

                                                    -2-
¶4       McGladrey conducted a financial audit of SCA for the year ending December 31, 2003,
     and issued its audit report in March 2004. The audit report indicated that SCA’s “balance
     sheet presents fairly in all material respects to the financial position of SCA in conformity
     with generally accepted auditing standards.” Citibank received the audit report and in June
     2004, made a $1.4 million term loan to SCA. The term loan was a modification of a prior
     term loan Citibank had made to SCA. Prior to 2004, Citibank had four outstanding loans to
     SCA; (1) a mortgage loan for its diagnostic surgery center; (2) a mortgage loan for its office
     condominium; (3) a revolving line of credit; and (4) a term loan. The 2004 term loan was an
     increase and an extension of the prior term loan.
¶5       During discovery, Citibank disclosed three expert witnesses: Edward A. Bartko, an
     accountant; Dr. Robert Kern, an ENT doctor; and, Dr. Robert Naclerio, an ENT doctor.
¶6       Bartko is a senior managing director in the corporate finance department of FTI
     Consulting, Inc. (FTI), and has an extensive auditing background. His expert credentials are
     not at issue. Bartko was engaged by Citibank to offer a professional opinion regarding
     McGladrey’s audit of SCA. According to Bartko’s “Expert Report and Disclosure,” he
     opined that McGladrey’s audit was deficient and “did not comply with the general standards,
     standards of field work and standards of reporting within the body of generally accepted
     auditing standards.” Specifically, according to Bartko, McGladrey’s audit was deficient
     because McGladrey did not use health care specialists who possessed the expertise to analyze
     the medical files of SCA’s patients, and who would have ultimately uncovered any medical
     fraud. Bartko’s report indicated that FTI’s team of health care specialists uncovered
     numerous red flags in SCA’s patient files, which should have been discovered by
     McGladrey’s audit. Bartko’s report only refers to FTI’s health care specialists as “two
     registered nurses” (one of which is a “Certified Coding Specialist” and “Certified
     Professional Coder”) and “an individual who leads FTI’s Healthcare Compliance Consulting
     Services practice.”
¶7       McGladrey filed a motion in limine to “Strike Certain Expert Testimony,” which is one
     of the two motions in limine at issue in this appeal. The motion sought to preclude Bartko
     from testifying as to the opinions and conclusions of FTI’s health care specialists, because
     the specialists were never disclosed during discovery and because Bartko was not qualified
     to testify to their findings. McGladrey noted in the motion that Bartko admitted during his
     deposition that the opinions of the health care specialists were the specialists’ opinion and
     not his opinions and that he was not qualified to read or interpret a patient’s medical records.
     The circuit court granted the motion to the extent that Bartko could testify that he would have
     engaged the use of health care specialists, but he could not testify as to the specific opinions
     and conclusions of FTI’s health care specialists.
¶8       Prior to trial, the circuit court limited Citibank’s claims of damages to the 2004 term loan
     because Citibank had made the other outstanding loans to SCA prior to receiving the
     McGladrey audit report.
¶9       Citibank subsequently filed a motion in limine to exclude any evidence of Citibank’s
     alleged contributory negligence unrelated to its term loan to SCA, which the circuit court
     denied. This motion is the second of the two motions in limine at issue in this appeal.

                                               -3-
¶ 10       The case proceeded to trial, with the jury finding in favor of McGladrey. Citibank appeals
       the circuit court’s pretrial rulings concerning the above two motions in limine.

¶ 11                                            Analysis
¶ 12       On appeal, Citibank first contends the circuit court’s order granting McGladrey’s motion
       in limine to preclude Bartko from testifying as to the opinions and conclusions of FTI’s
       health care specialists was in error.
¶ 13       Evidentiary motions, such as motions in limine, are within the trial court’s discretion and
       are reviewed under an abuse of discretion standard. Petraski v. Thedos, 382 Ill. App. 3d 22,
       26 (2008). The trial court abuses its discretion when the ruling is arbitrary or unreasonable
       or no reasonable person would agree with the position taken by the court. Petraski, 382 Ill.
       App. 3d at 26-27. The decision of whether to admit expert testimony is also subject to an
       abuse of discretion standard. Petraski, 382 Ill. App. 3d at 27.
¶ 14       Specifically, Citibank argues that Bartko should have been permitted to testify as to the
       specific opinions and conclusions of FTI’s health care specialists, citing to Walker v. Soo
       Line R.R. Co., 208 F.3d 581 (7th Cir. 2000), which held that the leader of a clinical medical
       team need not be qualified as an expert in every individual discipline encompassed by the
       team in order to testify as to the team’s conclusions. Walker, 208 F.3d at 589. Citibank
       argues that although Bartko was not qualified to interpret a patient’s medical records, he
       should have nevertheless been permitted to testify as to the health care specialists’ opinions
       and conclusions that medical fraud was prevalent and obvious in many of SCA’s patient
       files.
¶ 15       McGladrey responds that although Federal Rule of Evidence 703 permits an expert
       witness to rely on and explain to the jury certain inadmissible evidence, an expert witness
       “is not permitted to be the mouthpiece of [an expert] in a different specialty” (quoting Dura
       Automotive Systems of Indiana, Inc. v. CTS Corp., 285 F.3d 609, 614 (7th Cir. 2002)).
¶ 16       Federal Rule of Evidence 703, which was adopted by Illinois courts (see Wilson v. Clark,
       84 Ill. 2d 186, 196 (1981)), provides:
                    “The facts or data in the particular case upon which an expert bases an opinion
                or inference may be those perceived by or made known to the expert at or before the
                hearing. If of a type reasonably relied upon by experts in the particular field in
                forming opinions or inferences upon the subject, the facts or data need not be
                admissible in evidence in order for the opinion or inference to be admitted. Facts or
                data that are otherwise inadmissible shall not be disclosed to the jury by the
                proponent of the opinion or inference unless the court determines that their probative
                value in assisting the jury to evaluate the expert’s opinion substantially outweighs
                their prejudicial effect.” Fed. R. Evid. 703 (amended 2000).
¶ 17       In Walker, upon which Citibank relies, the district court barred a doctor who was an
       expert in the area of electrical trauma from testifying as to the opinions of other doctors on
       the “team” of medical professionals who evaluated the plaintiff’s claim that an electrical
       injury was the cause of his post-traumatic stress disorder. The Seventh Circuit Court of
       Appeals reversed, finding that medical professionals “have long been expected to rely on the

                                                -4-
       opinions of other medical professionals in forming their opinions.” Walker, 208 F.3d at 588.
       The court reasoned that the purpose of the team approach to medical diagnosis was to ensure
       that all relevant disciplines worked together for the good of the patient; therefore, the doctor,
       as the “team” leader, could rely on the expert opinions of other doctors on the team in
       reaching her expert opinion. Walker, 208 F.3d at 589.
¶ 18       In Dura Automotive Systems, upon which McGladrey relies, the Seventh Circuit Court
       of Appeals considered whether and to what degree an expert is permitted to use assistants
       or other experts in formulating his expert opinion, without those assistants or other experts
       testifying to their own opinions or conclusions. The plaintiff’s expert, a hydrologist, was
       disqualified by the district court because the expert relied on the conclusions of several
       professional groundwater-flow modelers who opined that the defendant’s manufacturing
       plant released harmful chemicals into the groundwater, which contaminated a nearby well
       field. Dura Automotive Systems, 285 F.3d at 611. The hydrologist expert had admitted during
       his deposition that he was not an expert in mathematical models of groundwater flow. The
       Seventh Circuit affirmed the district court, finding that an expert may not rely on or testify
       to another expert’s opinions or conclusions when it concerns matters beyond the expert’s
       ken. Dura Automotive Systems, 285 F.3d at 614. The court noted that “[a] scientist, however
       well credentialed he may be, is not permitted to be the mouthpiece of a scientist in a different
       specialty. That would not be responsible science.” Dura Automotive Systems, 285 F.3d at
       614. The court also cautioned against one expert merely “parroting the opinion” of another
       expert in another discipline. Dura Automotive Systems, 285 F.3d at 613.
¶ 19       Here, we find that this case is more similar to Dura Automotive Systems than Walker and
       compels a similar result. As in Dura Automotive Systems, Bartko was attempting to testify
       to the opinions and conclusions of FTI’s health care specialists who read and interpreted
       many of CSA’s patients’ medical charts, even though Bartko admitted he was not qualified
       to read a patient’s medical chart. In other words, Bartko would be testifying to or “parroting”
       those opinions and conclusions that were beyond his ken, which the Seventh Circuit held was
       improper.
¶ 20       We find Walker distinguishable because it involved a team of doctors, all working
       together to diagnose the cause of the plaintiff’s post-traumatic stress disorder. Here, all that
       Bartko’s “Expert Report and Disclosure” noted about the health care specialists was that two
       were registered nurses and the third was “an individual who leads FTI’s Healthcare
       Compliance Consulting Services practice.” This is certainly not a team of medical
       professionals that can be expected to rely on the opinions of one another, as in Walker.
¶ 21       We take this opportunity to acknowledge that Illinois state courts are not bound to follow
       the decisions of the federal district courts and are also not bound by the Federal Rules of
       Evidence. Reichert v. Board of Fire & Police Commissioners, 388 Ill. App. 3d 834, 845
       (2009). Nevertheless, although the Seventh Circuit’s opinion in Dura Automotive Systems
       is only persuasive authority, we find it sound and well reasoned and choose to follow it.

                                                 -5-
¶ 22         Additionally, we note that Federal Rule of Evidence 703 was amended in 2000.2 The first
        two sentences of the amended rule are the same as the prior version of the rule. The amended
        version further provides that “[f]acts or data that are otherwise inadmissible shall not be
        disclosed to the jury by the proponent of the opinion or inference unless the court determines
        that their probative value in assisting the jury to evaluate the expert’s opinion substantially
        outweighs their prejudicial effect.” Fed. R. Evid. 703 (amended 2000).3 The advisory
        committee notes state that the amendment “provides a presumption against disclosure to the
        jury of information used as the basis of an expert’s opinion and not admissible for any
        substantive purpose, when that information is offered by the proponent of the expert.” Fed.
        R. Evid. 703, Advisory Committee Notes. This presumption serves as an additional reason
        why Bartko was properly precluded from testifying to the opinions and conclusions of FTI’s
        health care specialists. Therefore, we find the circuit court’s order precluding Bartko from
        testifying to the opinions and conclusions of FTI’s health care specialists was not an abuse
        of discretion.
¶ 23         Next, Citibank contends the circuit court’s order denying Citibank’s motion in limine to
        exclude any evidence of Citibank’s alleged contributory negligence unrelated to the 2004
        term loan to SCA was in error. Citibank argues that it was improper for the court to allow
        testimony regarding its lending decisions to SCA on all of its loans other than the 2004 term
        loan.
¶ 24         In denying Citibank’s motion in limine, the circuit court determined that any evidence
        relating to Citibank’s lending decisions with SCA was relevant to the issue of causation and
        reliance and was therefore admissible.
¶ 25         Citibank relies on Congregation of the Passion, Holy Cross Province v. Touche Ross &
        Co., 224 Ill. App. 3d 559 (1991), for support. In Congregation of the Passion, the plaintiff
        sued the defendant accounting firm for its negligent audit of one of its investment advisers,
        Cranford Newell. Prior to trial, the plaintiff filed a motion in limine to exclude any reference
        to any of its investment accounts other than the accounts managed by Newell. The circuit
        court granted the motion and this court affirmed on appeal. This court determined that the
        evidence was properly excluded because it did not bear on the specific issues under
        consideration, which concerned only the Newell accounts. Congregation of the Passion, 224
        Ill. App. 3d at 578. This court further stated that the fact that the plaintiff may have had
        problems with other investment advisors had no relevance and was not material to the
        plaintiff’s claims that the defendant negligently failed to properly value the Newell
        investments. Congregation of the Passion, 224 Ill. App. 3d at 579.
¶ 26         Citibank argues that, similar to Congregation of the Passion, the loans it made to SCA
        other than the term loan were not relevant in light of the court’s order limiting Citibank’s

        2
         The parties fail to note in their briefs that the rule has been amended and Citibank quotes the prior
version of the rule in its brief to this court.
        3
         No Illinois court has specifically adopted the amended version. See People v. Johnson, 406 Ill. App.
3d 805, 817 n.2 (2010).

                                                     -6-
       damages to the 2004 term loan.
¶ 27       Here, however, all of the loans Citibank made to SCA were relevant to the issue of
       whether Citibank relied on McGladrey’s audit in making the 2004 term loan. Citibank’s
       conduct regarding its prior loans to SCA was relevant to shed light on whether the
       McGladrey audit caused Citibank to make the 2004 term loan. Unlike in Congregation of the
       Passion, Citibank’s motion in limine did not go beyond the specific issues under
       consideration, namely, Citibank’s lending relationship with SCA. Although the circuit court
       limited Citibank’s damages to the 2004 term loan, the issue of whether Citibank relied on
       McGladrey’s audit in making the 2004 term loan involved Citibank’s entire lending
       relationship with SCA. We find no abuse of discretion in the circuit court’s denial of
       Citibank’s motion in limine to exclude any evidence of Citibank’s alleged contributory
       negligence unrelated to the 2004 term loan to SCA.
¶ 28       Lastly, Citibank argues that the accumulation of the circuit court’s erroneous rulings
       prejudiced Citibank and requires a new trial. However, we find no error in the court’s
       rulings. Without error, there can be no accumulation of error, and no new trial is required.
¶ 29       Accordingly, we affirm the judgment of the circuit court.
¶ 30       Affirmed.

                                               -7-