Free Response to Motion - District Court of Arizona - Arizona

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LAW OFFICES

RONAN & FIRESTONE, PLC
9300 E. RAINTREE DRIVE, SUITE 120 SCOTTSDALE, ARIZONA 85260 (480) 222-9100

Merrick B. Firestone, SB #012138 Veronica L. Manolio, SB #020230 Attorneys for the Nelcela Defendants

UNITED STATES DISTRICT COURT IN AND FOR THE DISTRICT OF ARIZONA Merchant Transaction Systems, Inc., Plaintiff, vs. Nelcela, Inc., an Arizona corporation; Ebocom, Inc., a Delaware Corporation; POST Integrations, Inc., an Illinois Corp., et. al. Defendants. And Related Counterclaims, Cross-Claims and Third-Party Complaint. I. INTRODUCTION Nelcela, Inc., Len Campagna and Alec Dollarhide (collectively "Nelcela") respond to the joint parties' motion to exclude testimony by expert Kevin Faulkner. The motion in limine ignores that Kevin Faulkner was always timely disclosed, that his written opinion was offered (and used) in depositions, that Nelcela had promptly disclosed to counsel when Robert DeCicco left employment with P.G. Lewis & Associates (the expert firm Nelcela hired), and that Kevin Faulkner addressed all of the after-the-fact Addenda and "Supplements" the joint parties' experts offered. Moreover, the motionin limine misstates that Kevin Faulkner was not offered for deposition. Promptly learning that Robert DeCicco had left employment with PGLA, Nelcela's counsel notified the other parties and made Kevin Faulkner available for deposition. The joint parties chose not to depose Mr. Faulkner simply so they could gripe as they are doing now. They have misled this Court and failed to give the whole story about Mr. Faulkner. The motion to exclude must be denied. No. 02-CV-1954 - PHX-MHM NELCELA, INC., LEN CAMPAGNA AND ALEC DOLLARHIDE'S RESPONSE TO JOINT PARTIES' MOTION IN LIMINE NO. 1 TO EXCLUDE TESTIMONY OF EXPERT KEVIN FAULKNER (Oral Argument Requested) (The Honorable Mary H. Murguia)

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II.

REBUTTAL FACTUAL BACKGROUND Kevin Faulkner was disclosed from the very first expert disclosure required by this Court.

On September 26 2005, Nelcela served its Expert Report, which was unmistakably authored by both experts "Kevin Faulkner and Robert DeCicco" of P.G. Lewis and Associates (hereafter "PGLA"). See, email from Veronica Manolio transmitting expert report and the relevant pages of that report, collectively attached here as Exhibit A and incorporated by this reference. Kevin Faulkner's credentials, his analysis/involvement in this case, and the substance of his anticipated testimony in this matter were all disclosed in that original (and timely) expert report. Id. The joint parties then asked to depose, "who will be the testifying witness" from PGLA. See, Exhibit 2 to the joint parties' motion to exclude. Nelcela provided Robert DeCicco as they reasonably believed he would be the testifying expert at trial. However, as a precaution, Nelcela also flew Kevin Faulkner into Arizona from New Jersey on the date of Robert DeCicco's deposition, and Nelcela made it clear to the joint parties' counsel that Kevin Faulkner was here, and available, should his deposition be necessary. See, deposition transcript of Robert DeCicco at pp. 7-12, attached as Exhibit 4 to the joint parties' motion. In relevant part, the testimony reads: BY MR. HALLORAN TO ROBERT DECICCO: Q. ...have you been designated by P.G. Lewis & Associates, LLC, to be the representative of that company who will be the testifying expert witness in all trials and hearings in the present lawsuit? I've been designated to the be case manager for this particular case, but it doesn't necessarily mean that I would be the testifying witness. *** Is Mr. Faulkner going to be testifying as an expert witness at any point in this case? *** ... I understood, from discussions with Mr. Firestone yesterday, that both yourself and Mr. Faulkner will be here today. Is Mr. Faulkner in Phoenix today? He's in Scottsdale. *** And you're the sole witness who's going to be testifying as an expert about the opinions set forth in 319, to the best of your knowledge. Is that right?

A.

Q. Q.

A. Q.

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A. Q.

Not to the best ­ I'm not in control of who will be brought forth or who would testify in regards to the contents. Merrick? Obviously, it's coauthored by Kevin [Faulkner] and I, so I don't know if he would be called.

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Id. Emphasis added. Objections omitted. The joint parties are correct that Nelcela provided Robert DeCicco for deposition and that counsel indicated he would testify that day. However, Nelcela hadno idea that Mr. DeCicco would later leave employment with PGLA; Nelcela never stated that Mr. Faulkner would not be called; and, Nelcela never withheld Mr. Faulkner from being deposed. Contrary to the joint parties' assertions, Nelcela outright offered Mr. Faulkner for deposition. On May 1, 2006, undersigned learned for the first time (and disclosed within moments of learning) that: 1) PGLA had been acquired and/or "merged" with Protiviti; and 2) that Robert DeCicco left employment with PGLA/Protiviti. See, Email from Veronica Manolio to all counsel dated 5/1/06 attached here as Exhibit B and incorporated by this reference. In that disclosure, undersigned stated: 1. 2. 3. 4. 5. Nelcela just learned of the acquisition; Nelcela just learned Mr. DeCicco was no longer working with PGLA/Proviti; Nelcela intended to use Mr. Faulkner from "this point forward"; Nelcela was notifying all parties as soon as the information was received; and Nelcela was sorry for the "informal disclosure," but because the close of discovery had already passed, Nelcela did not, "...have any other way to properly disclose this information...." Id. Emphasis added. Even though Nelcela acted promptly, above-board, and with good intentions, Post's counsel objected. See, Email from Richard Halloran dated 5/2/06 attached here as Exhibit C and

incorporated by this reference. Nelcela's counsel promptly acted to clear up the objection and offered, "We would certainly allow [Mr. Faulkner's] deposition should that become a necessity."

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See, Response Email from Veronica Manolio dated 5/4/06 attached here as Exhibit D and incorporated by this reference.1 Upon receipt of undersigned's email, offering to allow deposition, the joint parties did nothing. They did not further object; they did not set a deposition; they did not bring the issue to the Court's attention; they simply ignored the issue until after summary judgment. In November 2006, two (2) months after this Court ruled on summary judgment, Post's counsel wrote to undersigned and asked to take Mr. Faulkner's deposition (and waste everyone's time and money) while stating they would still, "challenge the admissibility of Mr. Faulkner's testimony" at trial. See, Exhibit 8 to the joint parties' motion to exclude.
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Nelcela agreed to the

deposition but made it clear that it had two problems. See, Letter by Veronica Manolio dated 11/29/06 attached here as Exhibit E and incorporated by this reference. First, Nelcela did not want to waste, "any party's time, money or energy for this deposition if Post is going to later challenge the use of Mr. Faulkner and/or his deposition testimony at trial." Id. Emphasis added. Next, Nelcela did not want to defy the Court's clear ruling that discovery was closed. Id. Nelcela

suggested getting the issue resolved by the Court before setting the deposition. Id. Emphasis in original. Nelcela was clear that it would be, "happy to work with [Post's counsel] to resolve these issues and get depositions underway," but it wanted the Court kept abreast of the parties' intentions:

In clearing up the "objection" to using Mr. Faulkner, Nelcela offered that Mr. Faulkner could be deposed after summary judgment on Phase I was determined. The motion in limine attempts to mislead the Court that Nelcela did something wrong by offering Mr. Faulkner, "only after summary judgment on Phase I...." See, motion at p. 3. The reasonable explanation is that this Court had the pending motions for summary judgment but had not yet set oral argument(s) on the pending motions. (The Order setting oral arguments was not sent to counsel until May 8th, nearly a week later. See, Docket #364.) Nelcela was not withholding Mr. Faulkner's deposition, but there was no need to schedule a deposition in the middle of the Court's pending review of the parties' various motions for summary judgment. In the motion to exclude, the joint parties now reference a "repeated exchange of communication" but fail to tell this Court what that exchange involved. They also mislead the Court that Nelcela "requested" they draft a stipulation. This is not at all what happened. The joint parties excluded the "exchange of communication" so the Court would not see the full picture of what happened.
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Rather than wasting the Court's time, my suggestion is that we agree to the specific parameters of Post deposing Mr. Faulkner ­ including the anticipated time limitation(s) and that one person will depose him for the Joint Parties collectively, and we agree to the scope of continued deposition of Mr. Zeidman. We can then jointly submit a Stipulation to the Court and ask approval to conduct this discovery even though Judge Murguia already clearly ruled that discovery is closed. We are not about to disobey the Court's present order(s) and believe we need approval/authority to agree to any further depositions. We also believe it is in every party's best interest to address the items of disagreement before setting the depositions. Exhibit E, supra. Emphasis added. The joint parties did not include Nelcela's position in its motion to exclude because they know that Nelcela reasonably wanted this Court to determine the appropriateness of depositions prior to motions in limine being filed. Id. The joint parties also misstate that Nelcela, "curtly rejected" a stipulation. See, motion at p. 3. Instead, Mr. Halloran drafted a stipulation that did NOT address the most important question: Would this Court allow these two supplemental depositions? See, Exhibit 9 to the joint parties' motion to exclude. Post's counsel drafted a stipulation that did not ask the Court for permission, that included time limits to which Nelcela never agreed, and failed to address why Nelcela would spend thousands of dollars to fly an expert from New Jersey to be deposed simply so the joint parties could later object to his testimony being used at trial. Id. Nelcela again suggested that the parties, "discuss this issue with Judge Murguia" rather than wasting time and money. Id. The joint parties ignored the request to address the Court and filed this motion to exclude falsely claiming that Mr. Faulkner was withheld from deposition. That is just untrue.

REBUTTAL LAW AND ARGUMENT Mr. Faulkner has never been withheld from deposition and has always been timely and

properly disclosed. See, Exhibits A-E, supra. More importantly, Nelcela had never suggested that Mr. Faulkner should be used to eviscerate Mr. DeCicco's prior testimony. It was simply disclosed that Mr. Faulkner would be used, "from this point forward" when Mr. DeCicco left employment with PGLA/Protiviti. See, Exhibit B, supra. Nelcela did not intentionally "switch" experts or "dump" Mr. DeCicco as the joint parties falsely allege. Mr. DeCicco left PGLA/Protiviti, is working with

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a competitor, and can no longer be used as a testifying expert with access to Protiviti's files and/or the source code at issue in this case. See, e.g., Exhibit D (Nelcela had no idea Mr. DeCicco was leaving P.G. Lewis; Mr. Faulkner was always involved and disclosed; Nelcela offered Mr. Faulkner for deposition.); see also, Exhibit 1 to the joint parties' motion to exclude (Robert DeCicco is now employed by FTI Consulting, a competitor of Protiviti). Pursuant to Rule 26(b)(4)(A) FED.R.C IV.P., this Court should determine whether Nelcela offered the deposition of Mr. Faulkner, not whether the joint parties followed through in conducting the deposition. This Court should also consider its own ruling that discovery was closed at the time that Nelcela learned of Mr. DeCicco's departure and that Nelcela agreed to allow a supplemental deposition, so long as this Court granted the authority to do so. See, Exhibit E, supra. Perhaps most importantly, this Court should evaluate Rule 26(b)(4)(A) FED.R.CIV.P. as it applies to both Nelcela's expert (Kevin Faulkner) and Post's expert (Robert Zeidman). Just as Post requested a supplemental deposition of Mr. Faulkner, Nelcela also requested to depose Mr. Zeidman regarding those "new" portions of his reporting ­ including his Addendum Report and his Supplemental "Redline" Report ­ that were not made available prior to his first deposition. See,

Exhibit E. ("We have a similar need to re-depose Post's expert, Robert Zeidman, on the limited issues of: 1) His Addenda/Amended Expert Report; 2) His recent "Redline Comparison" report; and 3) Any and all documents, preparation, and/or analysis regarding anything done after his first deposition.") Nelcela had the right to re-depose Mr. Zediman on these new issues, but still agreed that the Court should determine whether supplemental depositions were appropriate. See, Rule 26(b)(4)(A)(Nelcela had the right to depose Mr. Zeidman, and his deposition was to be conducted after his report was provided. The supplemental report(s) gave Nelcela the right to re-depose him.); Exhibit E (Nelcela suggested that the parties' agree to the scope of new depositions and then seek court intervention from Judge Murguia to allow taking these supplemental depositions.) The joint parties chose not to cooperate, not Nelcela. See, Exhibit E. They ignored

Nelcela's suggestion to get the Court involved and now complain without merit. Id.

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IV.

CONCLUSION For all the reasons asserted herein, Nelcela respectfully asks this Court to deny the joint

parties' motion to exclude testimony by expert Kevin Faulkner. Alternatively, if Mr. Faulkner is precluded from appearing at trial, then pursuant to Rule 26(b)(4)(A) FED.R.C IV.P., Post's expert (Robert Zeidman) must also be precluded from testifying about any matter that was not particularly reported prior to his first deposition. RESPECTFULLY SUBMITTED this 2nd day of February, 2007. RONAN & FIRESTONE, PLC

/s/ Veronica L. Manolio Merrick B. Firestone Veronica L. Manolio 9300 E. Raintree Drive, Suite 120 Scottsdale, Arizona 85260 Attorneys for Nelcela, Inc., Leonard Campagna and Alec Dollarhide

ORIGINAL filed electronically with the Clerk's Office and COPIES electronically transmitted to the following CM/ECF registrants this same date to: Nicholas J. DiCarlo [email protected] Local Counsel for Merchant Transaction Systems William McKinnon [email protected] Attorney for Merchant Transaction Systems George C. Chen [email protected] or [email protected] Attorneys for Lexcel, Inc. and Lexcel Solutions, Inc. /// ///

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Peter D. Baird [email protected] Robert H. McKirgan [email protected] Richard A. Halloran [email protected] Kimberly Demarchi [email protected] Attorneys for POST, Ebocom, Mary Gerdts, and Douglas McKinney By: /s/ Diana Renteria

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