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Caruana v. Marcum

United States District Court, M.D. Tennessee, Nashville Division

November 14, 2016

PAUL F. CARUANA, Plaintiff,
DAN J. MARCUM, et. al., Defendants.



         This matter comes before the Court on in Limine motions 6-15 brought by Defendant Donald J. Ray (“Ray”), on October 10, 2016, to exclude aspects of Plaintiff's evidence on damages. Defendants C. Dennis Hyde, Joe E. Lester, and Dan J. Marcum adopted these motions. On October 14, 2016, Plaintiff and Defendant Ray gave notice to this Court that they have settled the dispute between them. Because remaining Defendants have adopted these motions, the Court addresses them below. However, a handful of the motions were specific to the nature of Plaintiff's dispute with Defendant Ray resulting in Plaintiff's responses to claims of hearsay inadmissibility, in some of these motions, to be unavailing.

         Defendant Ray's in Limine Motion 6-8 to 6) Exclude Statements Made by Buick Representatives to Paul Caruana; 7) Exclude Alleged Proposal to Sell Dealership to Michael C. Petty; and 8) Exclude Alleged Proposal to Buy Dealership from Larry Vickers

         Defendant Ray asserts that Plaintiff should be unable to insert into trial 6) the Buick Rep's reported dealership valuation as an assessment of TMI's value; 7) An offer of sale made by Plaintiff at $750, 000 to Michael C. Petty; and 8) Larry Vicker's offer to buy TMI for $750, 000. Defendant ultimately asserts that these “proposals” are inadmissible hearsay pursuant to Fed.R.Evid. 802. Hearsay is a “statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted.” Fed.R.Evid. 801(c). Hearsay is inadmissible unless it qualifies as an exception. Fed.R.Evid. 802.

         Plaintiff essentially combines his responses[1] to these assertions by pointing out that his inclusion of these valuations in a supplemental brief responding to Defendant Ray's complaint was intended to show Defendant Ray that he was on notice of Plaintiff's damages because Plaintiff disclosed these valuations in his deposition. This argument specifically hinges on Plaintiff's introduction of these valuations as unintended to assert the value of the dealership (here, the truth of the matter asserted), but rather to make Defendant Ray aware of the particular damages Plaintiff is requesting. First, Defendant Ray is no longer a party to this suit rendering Plaintiff's explanation for introducing these valuations moot and irrelevant. Relevant evidence is that which has “any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence.” Fed.R.Evid. 401. “Evidence which is not relevant is not admissible.” Fed.R.Evid. 402.

         Second, Plaintiff ultimately concedes to using these statements (i.e. the Buick's rep's valuation), in response to Defendant Ray's earlier motion to dismiss, as incorporated into his assessment of his dealership's worth. This poses a quandary for Plaintiff who otherwise claims that these assessments are not being used to put forth the value of his dealership.[2] Defendant Ray's 6-8 in Limine motions are GRANTED.

         Defendant Ray's in Limine Motion 9 to Exclude Evidence of Purported Deal with Gene Caldwell

         Defendant Ray moves to exclude evidence of Plaintiff's attempts at a deal with Gene Caldwell (“Caldwell”) for TMI. Even Defendant Ray's statement of facts (Docket No. 326), make it clear that Caldwell's deal with Plaintiff involved the following: 1) he would assume liabilities of TMI and make an initial $275, 000 capital infusion into TMI in exchange for operating control and 50% interest in TMI; 2) by the end of 2001 pay Plaintiff $750, 000 for the remaining stock in TMI and $560, 000 for the real estate, essentially buying out Plaintiff. The parties acknowledge that the agreement with Caldwell was breached by Mr. Caldwell's failure to perform. Both parties have alluded to that fact and it provides the reason Defendants entered into the agreements at issue in this case. Therefore, evidence related to the Caldwell agreement it relevant and admissible. To the extent that the agreement with Caldwell was actually reached, there is no prejudice to Defendants. This in Limine motion is DENIED.

         Defendant Ray's in Limine Motion 10 to Exclude Outline of Events Drafted by P. Caruana

         It's not immediately clear why Defendants do not want Plaintiff to be able to use his Outline of Events. Defendants assert that "Plaintiff's inclusion of this document on his Exhibit List suggests that he intends to introduce the entire document as “substantive evidence” (Docket No. 620 at 5) but this appears unsubstantiated. Defendants also assert, without offering more, that this is hearsay. This document was created by Plaintiff who will be a witness at this trial. Plaintiff intends to use it to rebut statements made by Defendants that he made contrary assertions to the statements made in the Outline of Events. However, Plaintiff concedes that the document might include hearsay, while also asserting that "hearsay within hearsay is not excluded by the rule against hearsay if each part of the combined statements conforms with an exception to the rule." Fed.R.Evid 805. This Court, without more from either party, is unable to decide at this time which components of Plaintiff's Outline of Events includes hearsay and does not. In order to avoid blanket exclusion, judgement on how Plaintiff can use his Outline of Events is hereby RESERVED.

         Defendant Ray's in Limine Motion 11 to Exclude the Transaction Summary as Evidence of Valuation or Damages

         Plaintiff and Defendants disagree whether this Transaction summary qualifies as a contract or a mere “agreement to agree.” Either way, it is admissible and can be used by Plaintiff as evidence of valuation. Even if this “Transaction Summary” were a mere informal agreement, which the Court does not necessarily concede to, it still includes statements made by Defendant Marcum, in his representative capacity, which qualify it as admissible. “Generally, statements such as those in the affidavits and letter would be inadmissible as hearsay. See Fed.R.Evid. 801(c). Certain statements made by parties, however, fall outside of the hearsay definition if the statements are offered against a party and the statements are made in the party's individual or representative capacity. Fed.R.Evid. 801(a) & 801(d)(2)(A).” Estate of Shafer v. C.I.R., 749 F.2d 1216, 1219 (6th Cir. 1984) (alterations in original). Since Defendant Marcum is a party to this action and was acting in his representative capacity at the time he engaged in this agreement with Plaintiff, this Transaction Summary is admissible under 801(d)(2)(A). This motion is DENIED.

         Defendant Ray's in Limine Motion 12 to Exclude Evidence of Attorney's Fees

         Parties dispute whether they contractually agreed to compensate the other for attorney's fees and Defendant Ray notes that if fees are recoverable, they will be decided by this Court at the end of trial and on submission of fee applications. Whether either party is entitled to recover attorney fees is not an issue for the jury therefore, Plaintiff may introduce evidence that he has incurred attorney ...

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