1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 RICHARD A MCCALLA, Case No. 4:22-cv-00675-KAW

8 Plaintiff, ORDER FOLLOWING PRETRIAL CONFERENCE; ORDER REGARDING 9 v. MOTIONS IN LIMINE

10 JAMES NORD, Dkt. Nos. 62, 68, 80-83 11 Defendant.

12 13 I. MOTIONS IN LIMINE 14 Plaintiff has filed one motion in limine, and Defendant has filed four. (Pl.’s Mots. in 15 Limine, “Pl.’s MIL,” Dkt. No. 62; Def.’s Mots. in Limine, “Def.’s MIL,” Dkt. No. 68.) 16 A. Plaintiff’s MIL No. 1: To exclude or limit the testimony of Defendant’s liability expert Raymond Tate 17 Plaintiff seeks to exclude Defendant’s expert Raymond Tate under Federal Rule of 18 Evidence 702 on the grounds that he lacks the requisite experience and qualifications to offer 19 opinions regarding the duties and responsibilities of a professional trustee. (Pl.’s MIL at 1.) 20 Plaintiff provided Tate’s report, as well as excerpts of his deposition testimony, which indicate 21 that Tate worked in financial services as a financial advisor and manager of financial advisors for 22 almost all of his professional career, and, since his retirement, he has owned a consulting company 23 called Alternative Fools which helps people make decisions about environmental, social or 24 government issues. (Tate Report, Dkt. No. 62, Ex. 1 at 17; Tate Dep., Dkt. No. 62, Ex. 2 at 14:14- 25 15:10, 17:19-18:8, 18:21-19:3, 19:10-21:1, 27:8-25.) Tate has never served as a trustee, 26 conservator, or estate receiver. (Tate Dep. at 30:3-16.) His only personal experience as a 27 professional fiduciary is as an investment advisor. (Tate Dep. at 30:13-16.) Thus, Plaintiff argues 1 In determining whether expert testimony is admissible under Federal Rule of Evidence 2 702, the district court is charged with performing “a preliminary assessment of whether the 3 reasoning or methodology underlying the testimony is scientifically valid and whether that 4 reasoning or methodology properly can be applied to the facts in issue.” Daubert v. Merrell Dow 5 Pharms., Inc.,

(1993). This inquiry is “a flexible one,” and “[i]ts 6 overarching subject is the scientific validity – and thus the evidentiary relevance and reliability – 7 of the principles that underlie a proposed submission. The focus, of course, must be solely on 8 principles and methodology, not on the conclusions that they generate.”

. 9 In opposition, Defendant argues that Tate has more than 30 years of experiences managing 10 assets, including trusts and accounts, and more than 10 years of experience training and overseeing 11 trust officers for the Merrill Lynch Trust Company and Wells Fargo Advisors. (Def’s Opp’n, Dkt. 12 No. 80 at 1.) This work included developing training materials on trust administration and the 13 review of trust documents. Id. at 4. Defendant further contends that Tate’s rebuttal report and 14 testimony are intended to address the alleged deficiencies of Plaintiff’s expert Varee Wycoff’s 15 opinions, which, given his experience, he is well qualified to opine on the execution of duties as a 16 trustee despite never having individually served as one. Id. at 4. In light of his experience, the 17 Court finds that Tate is qualified under Rule 702 to testify regarding trust administration. 18 Nonetheless, the Court agrees with Plaintiff that Mr. Tate is not qualified to testify 19 regarding construction issues and/or the failure to maintain the property, specifically the roof. 20 (Pl.’s MIL at 5-6.) There is no evidence to support Mr. Tate’s assertion that the foundation 21 needed to be stable prior to roof replacement, so he is precluded from testifying regarding the roof, 22 foundation, or other construction issues. 23 Based on the foregoing, Plaintiff’s motion is GRANTED IN PART, and Mr. Tate’s 24 testimony is limited to the duties of the trustee. He is not permitted to testify on construction 25 issues. 26 B. Defendant’s MIL No. 1: To exclude property appraisal evidence 27 Defendant seeks to exclude the two property appraisals of the McCalla property located at 1 hearsay, since they are proffered for the truth of the content of those appraisals. (Def.’s MIL at 1 2 (citing Fed. R. Evid. 802).) Defendant contends that the 2019 Appraisal by Bruce Bradley and the 3 2021 Appraisal by Jeffrey Wright (collectively, the “Appraisals”), have not been authenticated, 4 and that appraisers Bradley and Wright have not been disclosed as experts. (Def.’s MIL at 1 5 (citing Decl. of Anthony D. Phillips, “Phillips Decl.,” Dkt. No. 71 ¶¶ 5-6, Exs. B, C.) 6 Additionally, Defendant contends that the appraisals are not trustworthy, because they were 7 prepared in connection with loan applications. (Def.’s MIL at 3.) 8 In opposition, Plaintiff argues that the appraisals are admissible under the business records 9 exception in Federal Rule of Evidence 803. (Pl.’s Opp’n, Dkt. No. 82 at 6-7.) Plaintiff cites 10 United States v. Licavoli,

(9th Cir. 1979), in which the Ninth Circuit did not 11 require the proponent of a business record, in that case an insurance appraisal, to affirmatively 12 establish the qualifications of the person forming the opinion. (Pl.’s Opp’n at 7.) Under Rule 13 803(6), the trial court has the discretion to exclude a business record if the source of information 14 indicates a lack of trustworthiness. Licavoli,

. Here, Plaintiff intends to call the 15 appraisers as witnesses to authenticate the appraisals, and “attest that the appraisals were made and 16 kept in the regular course of their services as appraisers for the respective lenders for whom they 17 were prepared, and that the lenders relied upon their appraisals in issuing the loans.” (Pl.’s Opp’n 18 at 10.) 19 Moreover, to the extent that Defendant argues that the appraisals are untrustworthy 20 because they were prepared in for the purposes of obtaining a loan, that goes to credibility rather 21 than admissibility, and can be addressed on cross-examination. 22 Finally, as to Defendant’s argument that the appraisers needed to be disclosed as experts, 23 the Court disagrees. (See Def.’s MIL at 4.) The cases1 cited by Defendant are factually inapposite, 24

25 1 At the pretrial conference, Defendant offered copies of four cases in support of his argument not previously cited in his motion. The Court declines to consider arguments and legal authority raised 26 for the first time at hearing. See Foster v. Adams & Assocs., Inc.,

, at *3 n.3 (N.D. Cal. July 6, 2020) (citing Booth v. United States,

(9th Cir. 2019)) 27 (declining to consider argument raised for the first time during oral argument); Sloan v. Gen. 1 as none of those cases involved real property appraisals for lending purposes. See United States v. 2 22.80 Acres of Land, More or Less, in San Benito Cnty., State of Cal.,

(9th 3 Cir. 1988) (Government taking of a quarry); United States v. Johnson,

(9th Cir. 4 1960) (Government taking of a 505 unit housing project); United States v. 25.406 Acres of Land, 5 etc., in Arlington Cnty., Va.,

(4th Cir. 1949) (Government taking of land to 6 build a Veterans Administration hospital). Instead, all of the cases cited are condemnation cases 7 that sought to determine the fair market value that should be paid for the Government’s taking of 8 real property. See ids. This situation is more akin to a treating physician testifying in a personal 9 injury case to explain the extent of a plaintiff’s injuries and why they treated plaintiff in a certain 10 manner. Thus, while the appraisers cannot testify as experts, they are permitted to testify as 11 percipient witnesses, and so they may testify from their personal knowledge, which includes an 12 explanation of how they determined the appraisal value. 13 Accordingly, Defendant’s first motion in limine is denied. 14 C. Defendant’s MIL No. 2: To exclude argument or testimony that Oregon Property was part of the McCalla Family Trust 15 Defendant seeks to exclude argument or testimony that the Oregon Property was part of 16 the McCalla Family Trust, because it is irrelevant as the Oregon Property was never a Trust asset. 17 (Def.’s MIL at 8.) 18 On September 25, 2012, Vera Snider conveyed the Oregon Property to Thomas Richard 19 McCalla (“Thomas R. McCalla” or “McCalla Sr.”), Bonnie K. McCalla and Shirly McCalla. (See 20 Phillips Decl. ¶ 7, Ex. D.) The same three individuals are listed on the warranty deed.

The 21 Trust is not listed or identified anywhere on the warranty deed.

22 On December 19, 2019, Thomas R. McCalla quitclaimed his individual rights, titles, 23 interests and claims in the Oregon Property to Bonnie McCalla. (See Phillips Decl. ¶ 8, Ex. E.) 24 This was done as a result of an agreement reached between McCalla Sr. and Bonnie McCalla, that 25 she would withdraw her Petition for Appointment of Probate Conservator of the Person and Estate 26 of Thomas R. McCalla. (See 2019 Agreement, Phillips Decl. ¶ 9, Ex. F.) 27 In opposition, Plaintiff contends that the Oregon Property was a Trust asset, because the 1 Trust contained language to include after-acquired property in the Trust. (Pl.’s Opp’n at 12, 14; 2 Decl. of Melinda Jane Steuer ISO of Pl.’s Opp’n, “Steur Opp’n Decl.,” Dkt. No. 82-1 ¶ 2, Ex. 1 § 3 4.2.) In denying Defendant’s motion for summary judgment, the Court found that Thomas and 4 Shirly’s interest in the Oregon Property could be considered a Trust asset. (Mot. for Summary J. 5 Order, “MSJ Order,” Dkt. No. 48 at 9.) The fact that the warranty deed and quitclaim deed did not 6 mention the Trust is not dispositive nor is the fact that Thomas’s quitclaim was not executed on 7 behalf of the Trust or in his capacity as Trustee. (See Def.’s MIL at 10.) Indeed, the settlement 8 agreement’s recitals state that Defendant was appointed as Successor Trustee on August 30, 2019, 9 which was prior to the execution of the settlement agreement. (2019 Agreement at 1.) 10 Accordingly, Defendant’s second motion in limine is DENIED. 11 D. Defendant’s MIL No. 3: To exclude opinions and testimony of Plaintiff’s expert Varee Wycoff 12 Defendant moves to exclude Plaintiff’s expert Varee Wycoff, who is being offered to opine 13 on whether Defendant breached his fiduciary duties as trustee of the McCalla Family Living Trust. 14 (Def.’s MIL at 12.) Defendant argues that her “opinions and report do not cite to or rely upon the 15 actual Trust documents” and instead “offers discussion of the California Probate Code, but in 16 doing so, ignore the governing documents and circumstances in this case.” Id. 17 Indeed, Wycoff’s report does not list which documents were reviewed. Instead, her two- 18 page report provides that she reviewed “the deposition of James Nord… as well as various other 19 documents related to this case.” (Wycoff Report, Phillips Decl. ¶ 10, Ex. G.) Wycoff found that 20 Defendant’s various actions and statement raised questions regarding fiduciary negligence. 21 (Wycoff Report at 1.) She “base[d] [her] opinions on the deposition testimony of James Nord and 22 on the California Probate Code, Sections 1600, et seq., as well as [her] training and education.” Id. 23 Wycoff listed five “actions of concern”: 24 1. Failure to marshal and/or protect Trust assets. Probate Code 25 Section 16006, Duty to take control of and preserve trust property. Rental income not marshaled: Nord’s Deposition, 97:17-24. 26 Oregon property given to Bonnie McCalla. Nord’s Deposition, 114:15-115:15; Exhibit 21 27 Failure to maintain trust property: Richard McCalla Deposition account for Trust. Nord Deposition, 162:2-9. 1 2. Failure to prepare a budget as the Trustee’s standard of care 2 under Probate Code Section 16040, where the trustee shall administer the trust with reasonable care, skill, and caution under the 3 circumstances then prevailing that a prudent person acting in a like capacity would use in the conduct of an enterprise of like character 4 and with like aims to accomplish the purposes of the trust. Nord’s deposition, 75:1-76:8, 76:25-77:25. 5 3. Failure to ensure that returns were timely filed. Nord’s 6 Deposition, 82:12-84:14.

7 4. Failure to timely resign. Nord’s Deposition, 163:2-165:18. Probate Code Section 17200(b)(6), Petitioner’s Grounds for petition 8 include instructing the trustee and 17200(10) and (11) appointing or removing a trustee. 9 5. Failure to account upon resignation, Probate Code Section 10 16062, duty to account upon change of trustee. Nord’s Deposition, 252:5-15. 11 12 (Wycoff Report at 1-2.) During her deposition, Wycoff testified that she reached her opinions by 13 applying the Probate Code to determine if Defendant met the standard of care. (See Wycoff Dep., 14 Phillips Decl. ¶ 11, Ex. H at 45:12-21.) Defendant argues that Wycoff’s opinions will not assist 15 the trier of fact, as they constitute improper legal conclusions, are not based on sufficient facts or 16 data, and are not the product of reliable principles or methods. (Def.’s MIL at 13-16.) 17 In opposition, Plaintiff argues that Wycoff should be permitted to testify, because she has 18 provided opinions based on her decades of experience rather than impermissible legal opinion. 19 (Pl.’s Opp’n at 15.) Plaintiff further argues that Wycoff’s opinions will assist the jury, because 20 they pertain to the standard of care for professional trustees, and explain how Defendant’s conduct 21 deviated from that standard, which addresses professional negligence. Id. at 16. Indeed, expert 22 testimony regarding the standard of care is required in cases alleging professional negligence. U.S. 23 Fid. & Guar. Co. v. Lee Invs. LLC,

(9th Cir. 2011) (quoting Flowers v. 24 Torrance Memorial Hosp. Med. Ctr.,

(1994) (“California requires expert testimony 25 on the standard of care ‘unless the conduct required by the particular circumstances is within the 26 common knowledge of the layman.’”). Furthermore, Wycoff testified that she reviewed all of the 27 deposition testimony and exhibits thereto, and all of the documents produced in this case. (Pl.’s 1 Court finds this testimony satisfactory. Thus, to the extent that Defendant argues that Wycoff’s 2 opinions are not the result of reliable principles or methods, or that she did not rely on the 3 documents available, that goes to credibility and may be addressed on cross-examination. See 4 Kennedy v. Collagen Corp.,

, 1230–31 (9th Cir. 1998). 5 Based on the foregoing, the Court finds that Wycoff is qualified to testify to the standard of 6 care, and what a trustee is required to do under the circumstances, and the fact that the standard of 7 care is found in the California Probate Code does not render her findings impermissible legal 8 opinions. Accordingly, Defendant’s request to exclude Wycoff’s opinion and testimony is 9 DENIED. 10 E. Defendant’s MIL No. 4: To exclude evidence not previously disclosed or timely produced 11 Defendant moves to exclude four categories of exhibits that Plaintiff produced after the 12 close of discovery on September 26 and 27, 2023. (Def.’s MIL at 17.) Some of the documents 13 existed at the time of the prior productions, while others are dated September 2023, and relate to 14 the construction performed on the Napa Property.

These documents include invoices from 15 A&R Construction, which is owned by Richard Hasty, a resident at the Napa Property. Id. at 14. 16 One invoice, dated September 22, 2023, is for $411,000, but provides no breakdown of the total 17 cost, no labor, and no cost of materials. Id. Defendant argues that Plaintiff is continuing to create 18 damages up until the eve of trial. Id. Defendant contends that the admission of these documents is 19 prejudicial, because they are unauthenticated, the contractor did not undergo deposition, no expert 20 has reviewed them, and the construction has not been performed. Id. at 19. 21 In opposition, Plaintiff argues that Defendant is seeking to exclude highly relevant 22 documents pertaining to the condition to the Napa Property and/or Plaintiff’s damages. (Pl.’s 23 Opp’n at 21.) Plaintiff contends that he has good cause for not producing the documents earlier, 24 and that the failure to produce them is not prejudicial. Id. Plaintiff puts the documents into six 25 categories, but only the four below are at issue:2 (1) photographs of the Napa Property; (2) 26

27 2 It is Defendant’s burden to identify the documents to which he objects in the body of the motion 1 Invoices from A&R Construction; (3) Documents Pertaining to the 2021 Refinancing of Napa 2 Property; and (4) Plaintiff Richard McCalla’s American Express Statement, dated November 3 2021.3 4 1. Photographs of the Napa Property 5 Plaintiff argues that these photographs are not prejudicial, because they show the condition 6 of the Napa Property, which Plaintiff testified about in detail during his deposition. (Pl.’s Opp’n at 7 22.) On February 27, 2023, Plaintiff produced 13 photographs of the property, which were taken 8 by Richard Hasty, the contractor who is renting an apartment located on the property. Id. 9 Plaintiff’s initial disclosures listed Hasty as a witness and stated that he had knowledge of the 10 property’s condition. Id. On September 19, 2023 and September 25, 2023, Hasty provided 11 Plaintiff with several additional photographs, which Plaintiff did not know existed. Id. Plaintiff 12 contends that all of them pertain to property conditions and damages which Plaintiff had testified 13 to at his deposition. Id. Plaintiff further argues that Defendant is not prejudiced, because his 14 expert, Peter Cella, conducted a visual inspection of the property in mid-April 2023, in which he 15 was given unfettered access to view and photograph the property. (Pl.’s Opp’n at 23; Steuer Opp’n 16 Decl. ¶ 10.) Plaintiff contends that the photos are necessary because Defendant has denied that the 17 Napa Property was in the condition that Plaintiff described, and Cella testified that he did not see 18 any evidence of water damage or several of the other defects which the photographs refute. (Pl.’s 19 Opp’n at 23.) 20 These photos were not timely produced, and Plaintiff has not shown good cause as to why 21 they should be admitted. While the Court will sustain Defendant’s objection, the photographs 22 may be used for impeachment purposes. 23 2. Invoices from A&R Construction 24 Defendant seeks to exclude the construction invoices contained in Plaintiff’s Exhibit 124. 25 (See Def.’s Obj. at 7.) Plaintiff contends that he produced the roof repair invoice on February 27, 26 assume that these are the categories of documents at issue, as they were produced in September 27 2023. (See Def.’s Obj., Dkt. No. 81.) 1 2023. (Pl.’s Opp’n at 25.) The other invoices did not previously exist, and the failure to produce 2 them is not prejudicial, because Defendant knew that Hasty was doing extensive construction 3 work on the property, and he has known about the nature and scope of work since at least 4 February 27, 2023. Id. Moreover, Plaintiff argues that he should not be penalized for Defendant’s 5 decision to not take Hasty’s deposition. Id. 6 While the majority of repair invoices were produced late, the probative value of all 7 invoices are substantially outweighed by the risk of unfair prejudice, confusion, and the potential 8 to mislead the jury, such that they must be excluded under Federal Rule of Evidence 403. Here, 9 any recoverable damages to the Napa Property would be attributed to the cost of delay, rather than 10 the full amount of repair or replacement. Thus, an expert witness would be required to explain to 11 a jury how the delay damages can be ascertained. To the Court’s knowledge, Plaintiff has not 12 retained such an expert, so the admission of these invoices would only serve to confuse the issues 13 and mislead the jury into believing that the amount of damages is the total cost of repair. Thus, 14 the repair invoices are excluded under Rule 403. 15 3. Documents Pertaining to the 2021 Refinancing of Napa Property 16 Defendant seeks to exclude the closing disclosure paperwork, dated October 28, 2021. 17 (Def.’s Obj. at 7.) Plaintiff claims that the failure to produce the document during discovery was 18 inadvertent, due to office staffing issues, as he believed that it had been included in the August 10, 19 2022 production or in USAA’s production, and that other related documents were produced. (Pl.’s 20 Opp’n at 28.) Plaintiff argues that the late production is not prejudicial, because Defendant has 21 known from the outset that Plaintiff caused the property to be refinanced in Fall 2021, after he 22 became Trustee, in order to fund repairs, and that Plaintiff had taken issue with Defendant’s 23 refusal to refinance to property. Id. at 28-29. Plaintiff suggests that any prejudice could be cured 24 by the lesser sanction of allowing Defendant to depose Plaintiff about this document. Id. at 29. 25 The Court agrees. The Court declines to exclude the closing disclosure paperwork, but 26 Defendant is permitted to depose Plaintiff regarding these documents. Therefore, the parties are 27 ordered to meet and confer regarding reopening Plaintiff’s deposition for this limited purpose. 1 4. American Express Statement 2 Plaintiff testified at his deposition that he paid between $10,000 and $11,000 to Optima 3 Tax Services to assist him in resolving the issues relating to the untimely tax filings. (Pl.’s 4 McCalla Dep., Steuer Opp’n Decl. ¶ 5, Ex. 4 at 82:25-83:11.) This credit card statement shows 5 that exact amount paid, which was $10,795.50. (Pl.’s Opp’n at 29; Pl.’s Ex. 126.) This document 6 was also inadvertently not produced because of Plaintiff’s counsel’s staffing issues. 7 Since Plaintiff testified regarding the amount paid, the Court agrees that this late 8 production is not prejudicial. Thus, the Court declines to exclude the credit card statement. 9 For the reasons set forth above, the Court GRANTS IN PART this motion in limine, and 10 excludes the recently produced photographs of the Napa Property, such that they cannot be used in 11 Plaintiff’s case-in-chief, and the A&R Construction invoices. The photographs may, however, be 12 used for impeachment purposes. 13 II. DEFENDANT’S OBJECTIONS TO PLAINTIFF’S EXHIBITS 14 Defendant’s objections to Plaintiff’s evidence will be addressed by way of separate order. 15 III. REMOTE TESTIMONY 16 Plaintiff’s request to have in-state witnesses testify remotely is DENIED. If a suitable 17 courtroom is available, the Court will permit the three out-of-state witnesses (Frank Cuffe, Gerard 18 McCalla, and John Nelson) to testify remotely so long as their direct examination is still estimated 19 to be less than one hour each. 20 IV. PROPOSAL TO BIFURCATE TRIAL 21 While the parties did not file a formal motion to bifurcate, the Court denies their proposal 22 to bifurcate the punitive damages phase, if any, from the liability phase. (JPS at 8.) The parties are 23 ordered to file an amended verdict form by November 27, 2023. 24 // 25 // 26 // 27 // 1 V. BENCH BINDER 2 A bench binder containing a copy of each side’s final exhibits must be provided to the 3 Court on the first day of trial. Each exhibit must be separated with a label divider. 4 IT IS SO ORDERED. 5 Dated: November 8, 2023

6 [ANDIS A. WESTMORE 7 UnitetStates Magistrate Judge 8 9 10 11 12

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