Preview
26-CV-20-175
Filed in District Court
State of Minnesota
9/27/2023 4:34 PM
STATE OF MINNESOTA DISTRICT COURT
COUNTY OF GRANT EIGHTH JUDICIAL DISTRICT
Erik A. Ahlgren, in his capacity as assignee in Court File No. 26-CV-20-174
the assignment for the benefit of creditors of
Ashby Farmers Co-Operative Elevator
Company,
Plaintiff,
v.
Matt Skjeret and Skjeret Concrete,
Defendants.
Erik A. Ahlgren, in his capacity as assignee in Court File No. 26-CV-20-175
the assignment for the benefit of creditors of
Ashby Farmers Co-Operative Elevator
Company,
Plaintiff,
v.
Plumbers, Inc.,
Defendant.
Erik A. Ahlgren, in his capacity as assignee in Court File No. 26-CV-19-201
the assignment for the benefit of creditors of
Ashby Farmers Co-Operative Elevator
Company,
Plaintiff,
v.
Marvin Gaston, Betty Gaston, and
Taxidermy Unlimited, Inc.,
Defendants.
DEFENDANTS’ MOTION TO EXCLUDE PROPOSED EXPERT TESTIMONY OF
ERIK AHLGREN
26-CV-20-175
Filed in District Court
State of Minnesota
9/27/2023 4:34 PM
INTRODUCTION
Defendants in the above-referenced actions hereby move to exclude the proposed expert
testimony of Erik Ahlgren (see Schroeder Decl., Ex. C).
As the Court knows, Plaintiff Erik Ahlgren (“Plaintiff” or “Ahlgren”) commenced a
number of lawsuits against various defendants, including those captioned above, asserting claims
under the Minnesota Uniform Voidable Transactions Act (“MUVTA”). Ultimately, a number a
federal cases were consolidated for pretrial purposes, and the above-captioned actions were stayed
pending the District of Minnesota’s resolution of motions for summary judgment.1
In the federal cases, Plaintiff disclosed Mark Stiegel as an expert witness and produced an
expert report dated November 23, 2020 (the “Federal Report”). Schroeder Decl., Ex. A. In 2021,
the federal defendants filed a motion for partial summary judgment, which requested, among other
things, that Judge Tunheim dismiss Plaintiff’s constructive-fraud claims and exclude Mr. Stiegel’s
Federal Report. See generally Ahlgren v. Muller, 555 F. Supp. 3d 688 (D. Minn. 2021). While
Judge Tunheim deferred ruling on the admissibility of the Federal Report, he acknowledged that
“the Stiegel Report is nearly identical to the analysis contained in Ahlgren’s Affidavit;2 the Stiegel
Report is merely revised to eliminate use of the first-person perspective, and Stiegel has added
concluding statements regarding whether he believes the Co-Op was insolvent based on the
analysis.” Id. at 709 (internal citation omitted). Critically, however, Judge Tunheim recognized
that:
Whether the Stiegel Report source material—the Ahlgren Affidavit—is itself
admissible is another question. Under Federal Rule of Evidence 701(c), if a witness
is not testifying as an expert, testimony in the form of an opinion cannot be “based
on scientific, technical, or other specialized knowledge within the scope of Rule
1
As noted in the parties’ May 5, 2021 Stipulation, “the parties in both the federal cases and the
related state court cases have coordinated discovery, including fact depositions and expert
discovery. This coordination has promoted efficiency, with significant savings of time and
expenses for all parties.”
2
The Ahlgren Affidavit is attached to the Schroeder Declaration as Exhibit D.
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702,” and a witness who is testifying as an expert must be qualified by knowledge,
skill, experience, training or education, Fed. R. Evid. 702. Federal Rule of Civil
Procedure 26(a)(2) also requires disclosure of expert testimony and that such
disclosure be accompanied by a written report. Ahlgren’s analysis is likely based
on technical or specialized knowledge and therefore cannot be offered as a lay
opinion, and thus is likely inadmissible unless Ahlgren can be qualified as an
expert witness.3
Ahlgren v. Muller, 555 F. Supp. 3d 688, 709–10 (D. Minn. 2021) (emphasis added).
In a too little, too late attempt to resolve the inadmissibility issues raised by Judge Tunheim,
on September 1, 2023, Plaintiff served his Expert Disclosure, which, in relevant part, provides:
Rule 26.02(b)(3) Witness Not Retained or Specially Employed to Provide Expert
Testimony Who Do not Provide A Written Report:
Erik A. Ahlgren, in his capacity as assignee in the assignment for the benefit of creditors
of Ashby Farmers Co-Operative Elevator Company. Mr. Ahlgren will testify regarding (i)
the definition of insolvency as set forth in Section 2 of the Stiegel Report, (ii) the factual
background and analysis as set forth Section 4 of the Stiegel Report, (iii) the insolvency of
the Ashby Farmers Co-Operative Elevator Company (the "Co-Op"), (iv) the fraudulent
scheme perpetrated by Jerry Hennessey through his control of the Co-Op, and (v)
Plaintiff’s damages in this case.
The factual background for Mr. Ahlgren's testimony is set forth in the complaint, the
Stiegel Report, the responses to Defendant's discovery requests and in the deposition of
Mr. Ahlgren taken in the federal court cases.
The opinions to which Mr. Ahlgren is expected to testify are as follows:
i. Section 2 of the Stiegel Report accurately defines insolvency for purposes
of Minn. Stat. 513.42.
ii. The analysis set forth in Section 4 of the Stiegel Report provides an accurate
basis for restating the Co-Op's balance sheets.
iii. The Co-Op was insolvent not only at the year-end time periods shown on
the Co-Op's balance sheet but at all times relevant to the Plaintiff's claims
against the Defendants.
iv. Jerry Hennessey was in control of the Co-Op.
v. Jerry Hennessey, through the Co-Op, perpetrated a scheme to defraud the
patron farmers identified on Exhibit 29 to the Stiegel Report, and other
3
Judge Tunheim further recognized that “[t]he need for Ahlgren to be qualified as an expert to
make his affidavit admissible highlights the many roles Ahlgren is attempting to serve in this
litigation—plaintiff, witness, counsel—and the problems these layers pose. As these consolidated
cases progress toward trial, Ahlgren will need to narrow the scope of his involvement to be able
to present the case to the jury.” Ahlgren v. Muller, 555 F. Supp. 3d 688, 710 n.13 (D. Minn. 2021).
Unfortunately for Plaintiff, as detailed herein, he is not qualified to provide the expert testimony
he now seeks to introduce.
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creditors of the Co-Op, which scheme involved (a) obtaining loans through
the use of fraudulently prepared financial statements and other fraudulent
communications, and (b) the use of funds obtained through this fraud for
personal expenditures including the purchase of taxidermy as well as a large
addition to his home to display his taxidermy collection.
Schroeder Decl., Ex. C at 1-2. For the reasons set forth below, the Court should bar Ahlgren from
providing any expert testimony.
ARGUMENT
I. STANDARD FOR ADMISSIBILITY OF EXPERT TESTIMONY
Expert testimony must satisfy the basic requirements of the Rules of Evidence. Doe v.
Archdiocese of St. Paul & Minneapolis, 817 N.W.2d 150, 164 (Minn. 2012). As a threshold issue,
expert testimony is inadmissible if it is speculative. Holdahl v. Bioergonomics, Inc., No. A12-
1495, 2013 WL 401885, at *5 (Minn. App. Feb. 4, 2013); MCC Invs. v. Crystal Props., 451
N.W.2d 243, 247 (Minn. Ct. App. 1990).
To be admissible, expert testimony must satisfy the requirements of Minnesota Rule of
Evidence 702, which provides:
If scientific, technical, or other specialized knowledge will assist the trier of
fact to understand the evidence or to determine a fact in issue, a witness
qualified as an expert by knowledge, skill, experience, training or education,
may testify thereto in the form of an opinion or otherwise. The opinion must
have foundational reliability. In addition, if the opinion or evidence involves
novel scientific theory, the proponent must establish that the underlying
scientific evidence is generally accepted in the relevant scientific
community.
Under Rule 702, a proponent of expert testimony must show: (1) the witness is qualified
as an expert; (2) the opinion has foundational reliability; (3) the testimony is helpful to the trier of
fact; and (4) if the testimony involves a novel scientific theory, it must satisfy the Frye-Mack
standard. State v. Oberta, 796 N.W.2d 282, 289 (Minn. 2011). All expert testimony must satisfy
the first three parts of this test. Doe, 817 N.W.2d at 164. Novel scientific evidence must also satisfy
the fourth part. Id. at 165. Under the Frye-Mack standard, the proponent must show: (1) the
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involved science is generally accepted in the relevant scientific community; and (2) the particular
scientific evidence in each case has foundational reliability. Id. (citing Goeb v. Thoraldson, 615
N.W.2d 800, 814 (Minn. 2000)).
A 2006 amendment to Rule 702 added the last two sentences to the Rule. Doe, 817 N.W.2d
at 166. The pre-2006 rule did not require courts to look at the foundational reliability of an expert
opinion, and courts under that version of the rule often discussed the standard in terms of
“helpfulness.” Id. at 165, 167. Under the current rule, courts are required to consider foundational
reliability both as to all expert opinions and those subject to the Frye-Mack standard. Id. at 165.
The analysis under both is “nearly identical.” Id. at 168. Under Doe, Minnesota has moved closer
to a Daubert-type analysis that makes Minnesota trial judges much like federal gate-keeping
judges. P. Thompson, Minn. Pract. Series: Evidence § 703.04 (4th ed.).
To determine foundational reliability under Rule 702, the trial court must: (1) consider the
proffered evidence in light of the purpose for which it is being offered; (2) consider the underlying
reliability, consistency and accuracy of the subject about which the expert is testifying; and (3) the
proponent must show the evidence is reliable in the particular case. Doe, 817 N.W.2d at 167-68
(citing Jacobson v. $55,900 in U.S. Currency, 728 N.W.2d 510, 518, 529 (Minn. 2007)). The
“personal opinion” of an expert, no matter how impressive his or her credentials, is inadmissible
under Rule 702. See Group Health Plan, Inc. v. Phillip Morris, 188 F. Supp. 2d 1122, 1131 (D.
Minn. 2002).
II. AHLGREN IS BARRED FROM TESTIFYING THAT SECTION 2 OF THE
STIEGEL REPORT ACCURATELY DEFINES INSOLVENCY FOR PURPOSES
OF MINN. STAT § 513.42
The first purported “expert” opinion Plaintiff proffers is that “Section 2 of the Stiegel
Report accurately defines insolvency for purposes of Minn. Stat. 513.42.” Schroeder Decl., Ex. C
at 2. For the reasons set forth below, the Court should bar Ahlgren from providing any opinion on
the definition of insolvency under MUVTA.
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As an initial matter, expert opinions are admissible only if they will “assist the trier of fact.”
Minn. R. Evid. 702. Under this standard, the Minnesota Supreme Court ‘“has not allowed ultimate
conclusion testimony which embraces legal conclusions or terms of art.”‘ State v. Moore, 699
N.W.2d 733, 740 (Minn. 2005) (quoting State v. DeWald, 463 N.W.2d 741, 744 (Minn.1990)). As
the Committee Comment to Rule 704 notes, there is a distinction between opinions on factual
matters, which are generally admissible, and those involving “a legal analysis or mixed questions
of law and fact,” which are generally not thought to be useful to the trier of fact. Thus, when a
district court allows an expert to provide an opinion on a legal definition, the Minnesota Supreme
Court has consistently found reversible error. See Moore, 699 N.W.2d at 740.
Here, Minn. Stat. § 513.42 expressly provides a definition of “insolvency” under MUVTA.
As such, any opinion Ahlgren purports to provide relating to the “accuracy” of insolvency set forth
in Section 2 of the Stiegel Report would not be helpful to the trier of fact. Moreover, Plaintiff lacks
the qualifications to provide the Court with an opinion on a statutorily-defined term. Thus, for the
reasons set forth above, the Court should bar Ahlgren from offering any opinion on this issue.
III. AHLGREN IS BARRED FROM TESTIFYING THAT SECTION 4 OF THE
STIEGEL REPORT PROVIDES AN ACCURATE BASIS FOR RESTATING
ASHBY ELEVATOR’S BALANCE SHEETS
The second purported “expert” opinion Plaintiff wishes to offer is that the “analysis set
forth in Section 4 of the Stiegel Report provides an accurate basis for restating the Co-Op’s balance
sheets.” Schroeder Decl., Ex. C at 2. Ahlgren must be barred from providing any testimony on this
issue for the reasons set forth below.
First, while Ahlgren was the ghost writer of the Stiegel Report, as detailed in Defendants’
Motion to Exclude Proposed Expert Testimony of Mark Stiegel, that does not make Ahlgren
qualified to provide an expert opinion that his own analysis/theory of the case “provides an
accurate basis for restating the Co-Op’s balance sheets.” Ahlgren is a lawyer—not a certified
public accountant or certified valuation analyst. As a lawyer, Ahlgren lacks the “knowledge, skill,
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experience, training, and education” to opine as an expert that Section 4 of the Stiegel Report is an
accurate method of restating Ashby Elevator’s balance sheets. See Minn. R. Evid. 702. See also
Noske v. Friedberg, 713 N.W.2d 866, 871–72 (Minn. Ct. App. 2006); Steiner v. Beaudry Oil &
Service, Inc., 545 N.W.2d 39, 44 (Minn. Ct. App. 1996) (witnesses not qualified to render expert
opinion due to lack of specialized or technical knowledge and could not testify as lay witnesses
based upon lack of firsthand knowledge or observations).
Indeed, as set forth in the Finch Report (attached as Exhibit E to the Schroeder
Declaration), Section 4 of the Stiegel Report is flawed, incomplete, unreliable, and not verifiable.
Schroeder Decl., Ex. E at 7-14. Moreover, even Judge Tunheim acknowledged that the federal
“Defendants have raised doubts about the credibility of the Stiegel Report and Ahlgren analysis.”
Muller, 555 F. Supp. at 710. In short, Ahlgren is not qualified to provide expert testimony on this
issue, and such opinion lacks foundational reliability. Thus, the Court should preclude Ahlgren
from testifying on this issue.
Even if the Court were to allow Mr. Stiegel to testify, which it should not, Ahlgren’s
proposed testimony would not be helpful to the trier of fact. To the extent Stiegel is allowed to
testify, Ahlgren’s unqualified and repetitive testimony would cause undue delay, waste time, and
amount to a needless presentation of cumulative evidence. As such, Ahlgren’s proposed testimony
on this issue also should be excluded by Minn. R. Evid. 403.
IV. AHLGREN IS BARRED FROM TESTIFYING ASHBY ELEVATOR WAS
INSOLVENT AT ALL TIMES RELEVANT TO PLAINTIFF’S CLAIMS AGAINST
DEFENDANTS
The third “expert” opinion Plaintiff purports to offer is that the “[t]he Co-Op was insolvent
not only at the year-end time periods shown on the Co-Op’s balance sheet but at all times relevant
to the Plaintiff’s claims against Defendants.” Schroeder Decl., Ex. C at 2. The Court must preclude
Ahlgren from offering testimony on this issue for the same reasons, arguments, and authorities set
forth in supra Section III. Nor does Ahlgren’s purported opinion have “foundational reliability”
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as required by Rule 702. See also Doe, 817 N.W.2d at 165 (courts must consider foundational
reliability of proffered expert opinion). In addition, the Court should preclude Ahlgren from
testifying on this issue as because it is “not helpful to the [trier of fact] because it ‘merely [tell the
trier of fact] what result to reach.”‘ Moore, 699 N.W.2d at 740. For all these reasons, the Court
should preclude Ahlgren from providing any testimony on this issue.
V. AHLGREN IS BARRED FROM TESTIFYING THAT JERRY HENNESSEY WAS
IN CONTROL OF ASHBY ELEVATOR
The fourth opinion Plaintiff wishes to offer is that Jerry Hennessey was in control of Ashby
Elevator. Schroeder Decl., Ex. C at 2. Again, Ahlgren must be barred from providing testimony
on this issue. For similar reasons as those described above, Ahlgren must be precluded from
testifying on this issue as: (1) he lacks the necessary qualifications to do so; (2) his proposed
testimony is on a legal issue where such testimony will not be helpful to the trier of fact; and (3)
his proposed testimony lacks foundational reliability. Defendants hereby incorporate the
arguments and authorities set forth above in support of this point.
VI. AHLGREN IS BARRED FROM TESTIFYING THAT JERRY HENNESSEY
PERPETRATED A SCHEME TO DEFRAUD ASHBY ELEVATOR MEMBERS
The fifth “expert” opinion Plaintiff wishes to offer is that:
Jerry Hennessey, through the Co-Op, perpetrated a scheme to defraud the patron
farmers identified on Exhibit 29 to the Stiegel Report, and other creditors of the
Co-Op, which scheme involved (a) obtaining loans through the use of fraudulently
prepared financial statements and other fraudulent communications, and (b) the use
of funds obtained through this fraud for personal expenditures including the
purchase of taxidermy as well as a large addition to his home to display his
taxidermy collection.
Schroeder Decl., Ex. C at 2. Once again, Ahlgren should be precluded from testifying on this issue
as: (1) he lacks the necessary qualifications to do so; (2) his proposed testimony concerns multiple
legal issues/conclusions where such testimony will not be helpful to the trier of fact; and (3) his
proposed testimony lacks foundational reliability. In addition, Ahlgren’s proposed testimony
would likely be repetitive of testimony of persons with first-hand knowledge of Hennessey’s
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conduct, as opposed to Ahlgren’s purported knowledge, which lacks foundation, is based on
hearsay, and thus is utterly speculative. Because Ahlgren’s proposed testimony on this issue would
cause undue delay, waste time, and amount to needless presentation of cumulative evidence, it also
should be barred under Rule 403.
VII. AHLGREN’S TESTIMONY SHOULD BE EXCLUDED BECAUSE HE WAS
RETAINED OR SPECIALLY EMPLOYED TO PROVIDE EXPERT TESTIMONY
AND FAILED TO COMPLY WITH THE REQUIREMENTS OF RULE 26.01(b)(2)
As noted above, Plaintiff’s September 1, 2023 Expert Disclosure identifies Ahlgren as a
“witness not retained or specially employed to provide expert testimony who do not provide an
expert report” pursuant to Minn. R. Civ. P. 26.01(b)(3). Schroeder Decl., Ex. C at 1. As detailed
below, however, because Ahlgren is attempting to provide expert testimony in his capacity as a
hourly-paid assignee for the benefit of creditors of Ashby Elevator, he is in fact a “retained or
specially employed” witness “who must provide a written report” meeting all requirements set
forth in Minn. R. Civ. P. 26.01(b)(2). Because Plaintiff failed to comply with Rule 26.01(b)(2),
Minn. R. Civ. P. 37.03 requires that Ahlgren be precluded from testifying at trial as an expert.
Without explanation or authority, Ahlgren asserts that he is witness not required to provide
a written expert report satisfying Rule 26.01(b)(2)’s requirement. To evaluate this contention, it is
necessary to look at the text of Rule 26.01(b)(2), which makes plain that the rule covers two types
of experts: (i) “retained or specially employed” experts and (ii) employees of a party who meet
certain criteria. As federal courts have acknowledged,
to give the phrase “retained or specially employed” any real meaning, a court must
acknowledge the difference between a percipient witness who happens to be an
expert and an expert who without prior knowledge of the facts giving rise to
litigation is recruited to provide expert opinion testimony. It is this difference, we
think, that best informs the language of the rule.
Downey v. Bob’s Disc. Furniture Holdings, Inc., 633 F.3d 1, 6 (1st Cir. 2011). Given this common-
sense reading, the prototypical expert witnesses that are not required to produce an expert report
are treating physicians that witness and/or participate in an occurrence that leads to litigation in
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which they have personal knowledge of events giving rise to the litigation. Id. at 6-7. If a witness
lacks personal knowledge of the events giving rise to the litigation or is compensated for their
testimony, such witness falls under Rule 26.01(b)(2) and must produce a written report satisfying
all the Rule’s requirements. Id.
Here, it is undisputed that Ahlgren did not participate or have personal knowledge relating
to the events giving rise to this litigation. Instead, after Ashby Elevator discovered Hennessey’s
conduct, on December 31, 2018, Ashby Elevator executed an assignment for the benefit of
creditors, and Plaintiff was appointed to serve as assignee, which entitled Ahlgren to “be paid
compensation based on $300 per hour for his time.” See Court File No. 26-CV-19-3, Index #9 at
¶ 3(A). Based on Ahlgren’s appointment as assignee, the Court has approved substantial fee
requests submitted by him for time spent in his capacity as assignee. Put differently, because
Ahlgren lacks personal knowledge of the facts giving rise to this litigation (other than after the fact
information he obtained largely through discovery in his role as counsel for Plaintiff) and is
compensated on an hourly basis for serving as assignee, Ahlgren is a “retained or specially
employed” witness required to provide a written report satisfying Rule 26.01(b)(2)’s requirements.
Because it is undisputed that Ahlgren failed to comply with Rule 26.01(b)(2)’s requirements, Rule
37.03(a) requires that the Court preclude Ahlgren from testifying as an expert at trial.
CONCLUSION
Based on the foregoing, the Court should grant Defendants’ motion to exclude the proposed
expert testimony of Erik Ahlgren.
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Respectfully submitted,
Dated: September 27, 2023 TAFT STETTINIUS & HOLLISTER LLP
By: s/ Mark G. Schroeder
Mark G. Schroeder (#171530)
Adam G. Chandler (#397408)
2200 IDS Center
80 South Eighth Street
Minneapolis, Minnesota 55402-2157
(612) 977-8400
mschroeder@taftlaw.com
achandler@taftlaw.com
ATTORNEYS FOR DEFENDANTS
129043563
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Preview
26-CV-20-175 Filed in District Court State of Minnesota 9/27/2023 4:34 PM STATE OF MINNESOTA DISTRICT COURT COUNTY OF GRANT EIGHTH JUDICIAL DISTRICT Erik A. Ahlgren, in his capacity as assignee in Court File No. 26-CV-20-174 the assignment for the benefit of creditors of Ashby Farmers Co-Operative Elevator Company, Plaintiff, v. Matt Skjeret and Skjeret Concrete, Defendants. Erik A. Ahlgren, in his capacity as assignee in Court File No. 26-CV-20-175 the assignment for the benefit of creditors of Ashby Farmers Co-Operative Elevator Company, Plaintiff, v. Plumbers, Inc., Defendant. Erik A. Ahlgren, in his capacity as assignee in Court File No. 26-CV-19-201 the assignment for the benefit of creditors of Ashby Farmers Co-Operative Elevator Company, Plaintiff, v. Marvin Gaston, Betty Gaston, and Taxidermy Unlimited, Inc., Defendants. DEFENDANTS’ MOTION TO EXCLUDE PROPOSED EXPERT TESTIMONY OF ERIK AHLGREN 26-CV-20-175 Filed in District Court State of Minnesota 9/27/2023 4:34 PM INTRODUCTION Defendants in the above-referenced actions hereby move to exclude the proposed expert testimony of Erik Ahlgren (see Schroeder Decl., Ex. C). As the Court knows, Plaintiff Erik Ahlgren (“Plaintiff” or “Ahlgren”) commenced a number of lawsuits against various defendants, including those captioned above, asserting claims under the Minnesota Uniform Voidable Transactions Act (“MUVTA”). Ultimately, a number a federal cases were consolidated for pretrial purposes, and the above-captioned actions were stayed pending the District of Minnesota’s resolution of motions for summary judgment.1 In the federal cases, Plaintiff disclosed Mark Stiegel as an expert witness and produced an expert report dated November 23, 2020 (the “Federal Report”). Schroeder Decl., Ex. A. In 2021, the federal defendants filed a motion for partial summary judgment, which requested, among other things, that Judge Tunheim dismiss Plaintiff’s constructive-fraud claims and exclude Mr. Stiegel’s Federal Report. See generally Ahlgren v. Muller, 555 F. Supp. 3d 688 (D. Minn. 2021). While Judge Tunheim deferred ruling on the admissibility of the Federal Report, he acknowledged that “the Stiegel Report is nearly identical to the analysis contained in Ahlgren’s Affidavit;2 the Stiegel Report is merely revised to eliminate use of the first-person perspective, and Stiegel has added concluding statements regarding whether he believes the Co-Op was insolvent based on the analysis.” Id. at 709 (internal citation omitted). Critically, however, Judge Tunheim recognized that: Whether the Stiegel Report source material—the Ahlgren Affidavit—is itself admissible is another question. Under Federal Rule of Evidence 701(c), if a witness is not testifying as an expert, testimony in the form of an opinion cannot be “based on scientific, technical, or other specialized knowledge within the scope of Rule 1 As noted in the parties’ May 5, 2021 Stipulation, “the parties in both the federal cases and the related state court cases have coordinated discovery, including fact depositions and expert discovery. This coordination has promoted efficiency, with significant savings of time and expenses for all parties.” 2 The Ahlgren Affidavit is attached to the Schroeder Declaration as Exhibit D. 2 26-CV-20-175 Filed in District Court State of Minnesota 9/27/2023 4:34 PM 702,” and a witness who is testifying as an expert must be qualified by knowledge, skill, experience, training or education, Fed. R. Evid. 702. Federal Rule of Civil Procedure 26(a)(2) also requires disclosure of expert testimony and that such disclosure be accompanied by a written report. Ahlgren’s analysis is likely based on technical or specialized knowledge and therefore cannot be offered as a lay opinion, and thus is likely inadmissible unless Ahlgren can be qualified as an expert witness.3 Ahlgren v. Muller, 555 F. Supp. 3d 688, 709–10 (D. Minn. 2021) (emphasis added). In a too little, too late attempt to resolve the inadmissibility issues raised by Judge Tunheim, on September 1, 2023, Plaintiff served his Expert Disclosure, which, in relevant part, provides: Rule 26.02(b)(3) Witness Not Retained or Specially Employed to Provide Expert Testimony Who Do not Provide A Written Report: Erik A. Ahlgren, in his capacity as assignee in the assignment for the benefit of creditors of Ashby Farmers Co-Operative Elevator Company. Mr. Ahlgren will testify regarding (i) the definition of insolvency as set forth in Section 2 of the Stiegel Report, (ii) the factual background and analysis as set forth Section 4 of the Stiegel Report, (iii) the insolvency of the Ashby Farmers Co-Operative Elevator Company (the "Co-Op"), (iv) the fraudulent scheme perpetrated by Jerry Hennessey through his control of the Co-Op, and (v) Plaintiff’s damages in this case. The factual background for Mr. Ahlgren's testimony is set forth in the complaint, the Stiegel Report, the responses to Defendant's discovery requests and in the deposition of Mr. Ahlgren taken in the federal court cases. The opinions to which Mr. Ahlgren is expected to testify are as follows: i. Section 2 of the Stiegel Report accurately defines insolvency for purposes of Minn. Stat. 513.42. ii. The analysis set forth in Section 4 of the Stiegel Report provides an accurate basis for restating the Co-Op's balance sheets. iii. The Co-Op was insolvent not only at the year-end time periods shown on the Co-Op's balance sheet but at all times relevant to the Plaintiff's claims against the Defendants. iv. Jerry Hennessey was in control of the Co-Op. v. Jerry Hennessey, through the Co-Op, perpetrated a scheme to defraud the patron farmers identified on Exhibit 29 to the Stiegel Report, and other 3 Judge Tunheim further recognized that “[t]he need for Ahlgren to be qualified as an expert to make his affidavit admissible highlights the many roles Ahlgren is attempting to serve in this litigation—plaintiff, witness, counsel—and the problems these layers pose. As these consolidated cases progress toward trial, Ahlgren will need to narrow the scope of his involvement to be able to present the case to the jury.” Ahlgren v. Muller, 555 F. Supp. 3d 688, 710 n.13 (D. Minn. 2021). Unfortunately for Plaintiff, as detailed herein, he is not qualified to provide the expert testimony he now seeks to introduce. 3 26-CV-20-175 Filed in District Court State of Minnesota 9/27/2023 4:34 PM creditors of the Co-Op, which scheme involved (a) obtaining loans through the use of fraudulently prepared financial statements and other fraudulent communications, and (b) the use of funds obtained through this fraud for personal expenditures including the purchase of taxidermy as well as a large addition to his home to display his taxidermy collection. Schroeder Decl., Ex. C at 1-2. For the reasons set forth below, the Court should bar Ahlgren from providing any expert testimony. ARGUMENT I. STANDARD FOR ADMISSIBILITY OF EXPERT TESTIMONY Expert testimony must satisfy the basic requirements of the Rules of Evidence. Doe v. Archdiocese of St. Paul & Minneapolis, 817 N.W.2d 150, 164 (Minn. 2012). As a threshold issue, expert testimony is inadmissible if it is speculative. Holdahl v. Bioergonomics, Inc., No. A12- 1495, 2013 WL 401885, at *5 (Minn. App. Feb. 4, 2013); MCC Invs. v. Crystal Props., 451 N.W.2d 243, 247 (Minn. Ct. App. 1990). To be admissible, expert testimony must satisfy the requirements of Minnesota Rule of Evidence 702, which provides: If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training or education, may testify thereto in the form of an opinion or otherwise. The opinion must have foundational reliability. In addition, if the opinion or evidence involves novel scientific theory, the proponent must establish that the underlying scientific evidence is generally accepted in the relevant scientific community. Under Rule 702, a proponent of expert testimony must show: (1) the witness is qualified as an expert; (2) the opinion has foundational reliability; (3) the testimony is helpful to the trier of fact; and (4) if the testimony involves a novel scientific theory, it must satisfy the Frye-Mack standard. State v. Oberta, 796 N.W.2d 282, 289 (Minn. 2011). All expert testimony must satisfy the first three parts of this test. Doe, 817 N.W.2d at 164. Novel scientific evidence must also satisfy the fourth part. Id. at 165. Under the Frye-Mack standard, the proponent must show: (1) the 4 26-CV-20-175 Filed in District Court State of Minnesota 9/27/2023 4:34 PM involved science is generally accepted in the relevant scientific community; and (2) the particular scientific evidence in each case has foundational reliability. Id. (citing Goeb v. Thoraldson, 615 N.W.2d 800, 814 (Minn. 2000)). A 2006 amendment to Rule 702 added the last two sentences to the Rule. Doe, 817 N.W.2d at 166. The pre-2006 rule did not require courts to look at the foundational reliability of an expert opinion, and courts under that version of the rule often discussed the standard in terms of “helpfulness.” Id. at 165, 167. Under the current rule, courts are required to consider foundational reliability both as to all expert opinions and those subject to the Frye-Mack standard. Id. at 165. The analysis under both is “nearly identical.” Id. at 168. Under Doe, Minnesota has moved closer to a Daubert-type analysis that makes Minnesota trial judges much like federal gate-keeping judges. P. Thompson, Minn. Pract. Series: Evidence § 703.04 (4th ed.). To determine foundational reliability under Rule 702, the trial court must: (1) consider the proffered evidence in light of the purpose for which it is being offered; (2) consider the underlying reliability, consistency and accuracy of the subject about which the expert is testifying; and (3) the proponent must show the evidence is reliable in the particular case. Doe, 817 N.W.2d at 167-68 (citing Jacobson v. $55,900 in U.S. Currency, 728 N.W.2d 510, 518, 529 (Minn. 2007)). The “personal opinion” of an expert, no matter how impressive his or her credentials, is inadmissible under Rule 702. See Group Health Plan, Inc. v. Phillip Morris, 188 F. Supp. 2d 1122, 1131 (D. Minn. 2002). II. AHLGREN IS BARRED FROM TESTIFYING THAT SECTION 2 OF THE STIEGEL REPORT ACCURATELY DEFINES INSOLVENCY FOR PURPOSES OF MINN. STAT § 513.42 The first purported “expert” opinion Plaintiff proffers is that “Section 2 of the Stiegel Report accurately defines insolvency for purposes of Minn. Stat. 513.42.” Schroeder Decl., Ex. C at 2. For the reasons set forth below, the Court should bar Ahlgren from providing any opinion on the definition of insolvency under MUVTA. 5 26-CV-20-175 Filed in District Court State of Minnesota 9/27/2023 4:34 PM As an initial matter, expert opinions are admissible only if they will “assist the trier of fact.” Minn. R. Evid. 702. Under this standard, the Minnesota Supreme Court ‘“has not allowed ultimate conclusion testimony which embraces legal conclusions or terms of art.”‘ State v. Moore, 699 N.W.2d 733, 740 (Minn. 2005) (quoting State v. DeWald, 463 N.W.2d 741, 744 (Minn.1990)). As the Committee Comment to Rule 704 notes, there is a distinction between opinions on factual matters, which are generally admissible, and those involving “a legal analysis or mixed questions of law and fact,” which are generally not thought to be useful to the trier of fact. Thus, when a district court allows an expert to provide an opinion on a legal definition, the Minnesota Supreme Court has consistently found reversible error. See Moore, 699 N.W.2d at 740. Here, Minn. Stat. § 513.42 expressly provides a definition of “insolvency” under MUVTA. As such, any opinion Ahlgren purports to provide relating to the “accuracy” of insolvency set forth in Section 2 of the Stiegel Report would not be helpful to the trier of fact. Moreover, Plaintiff lacks the qualifications to provide the Court with an opinion on a statutorily-defined term. Thus, for the reasons set forth above, the Court should bar Ahlgren from offering any opinion on this issue. III. AHLGREN IS BARRED FROM TESTIFYING THAT SECTION 4 OF THE STIEGEL REPORT PROVIDES AN ACCURATE BASIS FOR RESTATING ASHBY ELEVATOR’S BALANCE SHEETS The second purported “expert” opinion Plaintiff wishes to offer is that the “analysis set forth in Section 4 of the Stiegel Report provides an accurate basis for restating the Co-Op’s balance sheets.” Schroeder Decl., Ex. C at 2. Ahlgren must be barred from providing any testimony on this issue for the reasons set forth below. First, while Ahlgren was the ghost writer of the Stiegel Report, as detailed in Defendants’ Motion to Exclude Proposed Expert Testimony of Mark Stiegel, that does not make Ahlgren qualified to provide an expert opinion that his own analysis/theory of the case “provides an accurate basis for restating the Co-Op’s balance sheets.” Ahlgren is a lawyer—not a certified public accountant or certified valuation analyst. As a lawyer, Ahlgren lacks the “knowledge, skill, 6 26-CV-20-175 Filed in District Court State of Minnesota 9/27/2023 4:34 PM experience, training, and education” to opine as an expert that Section 4 of the Stiegel Report is an accurate method of restating Ashby Elevator’s balance sheets. See Minn. R. Evid. 702. See also Noske v. Friedberg, 713 N.W.2d 866, 871–72 (Minn. Ct. App. 2006); Steiner v. Beaudry Oil & Service, Inc., 545 N.W.2d 39, 44 (Minn. Ct. App. 1996) (witnesses not qualified to render expert opinion due to lack of specialized or technical knowledge and could not testify as lay witnesses based upon lack of firsthand knowledge or observations). Indeed, as set forth in the Finch Report (attached as Exhibit E to the Schroeder Declaration), Section 4 of the Stiegel Report is flawed, incomplete, unreliable, and not verifiable. Schroeder Decl., Ex. E at 7-14. Moreover, even Judge Tunheim acknowledged that the federal “Defendants have raised doubts about the credibility of the Stiegel Report and Ahlgren analysis.” Muller, 555 F. Supp. at 710. In short, Ahlgren is not qualified to provide expert testimony on this issue, and such opinion lacks foundational reliability. Thus, the Court should preclude Ahlgren from testifying on this issue. Even if the Court were to allow Mr. Stiegel to testify, which it should not, Ahlgren’s proposed testimony would not be helpful to the trier of fact. To the extent Stiegel is allowed to testify, Ahlgren’s unqualified and repetitive testimony would cause undue delay, waste time, and amount to a needless presentation of cumulative evidence. As such, Ahlgren’s proposed testimony on this issue also should be excluded by Minn. R. Evid. 403. IV. AHLGREN IS BARRED FROM TESTIFYING ASHBY ELEVATOR WAS INSOLVENT AT ALL TIMES RELEVANT TO PLAINTIFF’S CLAIMS AGAINST DEFENDANTS The third “expert” opinion Plaintiff purports to offer is that the “[t]he Co-Op was insolvent not only at the year-end time periods shown on the Co-Op’s balance sheet but at all times relevant to the Plaintiff’s claims against Defendants.” Schroeder Decl., Ex. C at 2. The Court must preclude Ahlgren from offering testimony on this issue for the same reasons, arguments, and authorities set forth in supra Section III. Nor does Ahlgren’s purported opinion have “foundational reliability” 7 26-CV-20-175 Filed in District Court State of Minnesota 9/27/2023 4:34 PM as required by Rule 702. See also Doe, 817 N.W.2d at 165 (courts must consider foundational reliability of proffered expert opinion). In addition, the Court should preclude Ahlgren from testifying on this issue as because it is “not helpful to the [trier of fact] because it ‘merely [tell the trier of fact] what result to reach.”‘ Moore, 699 N.W.2d at 740. For all these reasons, the Court should preclude Ahlgren from providing any testimony on this issue. V. AHLGREN IS BARRED FROM TESTIFYING THAT JERRY HENNESSEY WAS IN CONTROL OF ASHBY ELEVATOR The fourth opinion Plaintiff wishes to offer is that Jerry Hennessey was in control of Ashby Elevator. Schroeder Decl., Ex. C at 2. Again, Ahlgren must be barred from providing testimony on this issue. For similar reasons as those described above, Ahlgren must be precluded from testifying on this issue as: (1) he lacks the necessary qualifications to do so; (2) his proposed testimony is on a legal issue where such testimony will not be helpful to the trier of fact; and (3) his proposed testimony lacks foundational reliability. Defendants hereby incorporate the arguments and authorities set forth above in support of this point. VI. AHLGREN IS BARRED FROM TESTIFYING THAT JERRY HENNESSEY PERPETRATED A SCHEME TO DEFRAUD ASHBY ELEVATOR MEMBERS The fifth “expert” opinion Plaintiff wishes to offer is that: Jerry Hennessey, through the Co-Op, perpetrated a scheme to defraud the patron farmers identified on Exhibit 29 to the Stiegel Report, and other creditors of the Co-Op, which scheme involved (a) obtaining loans through the use of fraudulently prepared financial statements and other fraudulent communications, and (b) the use of funds obtained through this fraud for personal expenditures including the purchase of taxidermy as well as a large addition to his home to display his taxidermy collection. Schroeder Decl., Ex. C at 2. Once again, Ahlgren should be precluded from testifying on this issue as: (1) he lacks the necessary qualifications to do so; (2) his proposed testimony concerns multiple legal issues/conclusions where such testimony will not be helpful to the trier of fact; and (3) his proposed testimony lacks foundational reliability. In addition, Ahlgren’s proposed testimony would likely be repetitive of testimony of persons with first-hand knowledge of Hennessey’s 8 26-CV-20-175 Filed in District Court State of Minnesota 9/27/2023 4:34 PM conduct, as opposed to Ahlgren’s purported knowledge, which lacks foundation, is based on hearsay, and thus is utterly speculative. Because Ahlgren’s proposed testimony on this issue would cause undue delay, waste time, and amount to needless presentation of cumulative evidence, it also should be barred under Rule 403. VII. AHLGREN’S TESTIMONY SHOULD BE EXCLUDED BECAUSE HE WAS RETAINED OR SPECIALLY EMPLOYED TO PROVIDE EXPERT TESTIMONY AND FAILED TO COMPLY WITH THE REQUIREMENTS OF RULE 26.01(b)(2) As noted above, Plaintiff’s September 1, 2023 Expert Disclosure identifies Ahlgren as a “witness not retained or specially employed to provide expert testimony who do not provide an expert report” pursuant to Minn. R. Civ. P. 26.01(b)(3). Schroeder Decl., Ex. C at 1. As detailed below, however, because Ahlgren is attempting to provide expert testimony in his capacity as a hourly-paid assignee for the benefit of creditors of Ashby Elevator, he is in fact a “retained or specially employed” witness “who must provide a written report” meeting all requirements set forth in Minn. R. Civ. P. 26.01(b)(2). Because Plaintiff failed to comply with Rule 26.01(b)(2), Minn. R. Civ. P. 37.03 requires that Ahlgren be precluded from testifying at trial as an expert. Without explanation or authority, Ahlgren asserts that he is witness not required to provide a written expert report satisfying Rule 26.01(b)(2)’s requirement. To evaluate this contention, it is necessary to look at the text of Rule 26.01(b)(2), which makes plain that the rule covers two types of experts: (i) “retained or specially employed” experts and (ii) employees of a party who meet certain criteria. As federal courts have acknowledged, to give the phrase “retained or specially employed” any real meaning, a court must acknowledge the difference between a percipient witness who happens to be an expert and an expert who without prior knowledge of the facts giving rise to litigation is recruited to provide expert opinion testimony. It is this difference, we think, that best informs the language of the rule. Downey v. Bob’s Disc. Furniture Holdings, Inc., 633 F.3d 1, 6 (1st Cir. 2011). Given this common- sense reading, the prototypical expert witnesses that are not required to produce an expert report are treating physicians that witness and/or participate in an occurrence that leads to litigation in 9 26-CV-20-175 Filed in District Court State of Minnesota 9/27/2023 4:34 PM which they have personal knowledge of events giving rise to the litigation. Id. at 6-7. If a witness lacks personal knowledge of the events giving rise to the litigation or is compensated for their testimony, such witness falls under Rule 26.01(b)(2) and must produce a written report satisfying all the Rule’s requirements. Id. Here, it is undisputed that Ahlgren did not participate or have personal knowledge relating to the events giving rise to this litigation. Instead, after Ashby Elevator discovered Hennessey’s conduct, on December 31, 2018, Ashby Elevator executed an assignment for the benefit of creditors, and Plaintiff was appointed to serve as assignee, which entitled Ahlgren to “be paid compensation based on $300 per hour for his time.” See Court File No. 26-CV-19-3, Index #9 at ¶ 3(A). Based on Ahlgren’s appointment as assignee, the Court has approved substantial fee requests submitted by him for time spent in his capacity as assignee. Put differently, because Ahlgren lacks personal knowledge of the facts giving rise to this litigation (other than after the fact information he obtained largely through discovery in his role as counsel for Plaintiff) and is compensated on an hourly basis for serving as assignee, Ahlgren is a “retained or specially employed” witness required to provide a written report satisfying Rule 26.01(b)(2)’s requirements. Because it is undisputed that Ahlgren failed to comply with Rule 26.01(b)(2)’s requirements, Rule 37.03(a) requires that the Court preclude Ahlgren from testifying as an expert at trial. CONCLUSION Based on the foregoing, the Court should grant Defendants’ motion to exclude the proposed expert testimony of Erik Ahlgren. 10 26-CV-20-175 Filed in District Court State of Minnesota 9/27/2023 4:34 PM Respectfully submitted, Dated: September 27, 2023 TAFT STETTINIUS & HOLLISTER LLP By: s/ Mark G. Schroeder Mark G. Schroeder (#171530) Adam G. Chandler (#397408) 2200 IDS Center 80 South Eighth Street Minneapolis, Minnesota 55402-2157 (612) 977-8400 mschroeder@taftlaw.com achandler@taftlaw.com ATTORNEYS FOR DEFENDANTS 129043563 11