Preview
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 11:36 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1824 RECEIVED NYSCEF: 03/11/2024
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF WESTCHESTER
PAMELA GOLDSTEIN, )
ELLYN & TONY BERK as Administrators of )
the Estate of Winifred Berk, and PAUL )
BENJAMIN, on behalf of themselves and all ) MEMORANDUM OF LAW
others similarly situated, )
) Index No. 60767/2018
Plaintiffs, ) Hon. Linda S. Jamieson
)
vs. )
)
HOULIHAN LAWRENCE INC., )
)
Defendant. )
)
HOULIHAN LAWRENCE’S
MOTION TO STRIKE THOMAS CUSACK
March 11, 2024
Robert D. MacGill (pro hac vice) Alfred E. Donnellan
Scott E. Murray (pro hac vice) Nelida Lara
Matthew T. Ciulla (pro hac vice) DELBELLO DONNELLAN WEINGARTEN
MACGILL PC WISE & WIEDERKEHR LLP
156 E. Market St., Suite 1200 One North Lexington Ave, 11th Floor
Indianapolis, IN 46204 White Plains, NY 10601
(317) 721-1253 (914) 681-0200
1 of 25
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 11:36 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1824 RECEIVED NYSCEF: 03/11/2024
TABLE OF CONTENTS
TABLE OF AUTHORITIES……………………………………………………………………...ii
ARGUMENT……………………………………………………………………………...………2
Mr. Cusack is not an expert on the actual customs and practices
within the real estate brokerage industry during the class period.………………………...2
Even if Mr. Cusack had knowledge of industry customs and practices,
his proposed testimony invades the provinces of the Court and jury by
focusing primarily on conclusory, improper legal opinions……………………..………10
The Court should exclude Mr. Cusack’s statements regarding the law
and legislative history, which invade the role of the Court.………………………...……10
The Court should also prohibit Mr. Cusack from regurgitating record
evidence and providing his gloss on the facts of the case – such attempts
to narrate the evidence through an “expert” are improper.………………………………14
Separately, the Court should exclude Mr. Cusack’s email “audit” as unreliable.……..…17
CONCLUSION………………………………………………………………………………..…19
i
2 of 25
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 11:36 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1824 RECEIVED NYSCEF: 03/11/2024
TABLE OF AUTHORITIES
Case(s): Page(s):
De Long v. Erie Cty.,
60 N.Y.2d 296, 307 (1983).…………………………………………………………2
Episcopal Diocese of Long Island v. St. Matthias Nondenominational Ministries, Inc.,
157 A.D.3d 769, 771 (2d Dept. 2018)………………………………………………10
G.F. Co. v. Pan Ocean Shipping Co.,
23 F.3d 1498, 1507 n.6 (9th Cir. 1994)…………………………………………………11
Geddes v. Crown Equip. Corp.,
273 A.D.2d 904, 905 (4th Dept. 2000)………………………………………………3
Kraft Foods Glob., Inc. v. United Egg Producers, Inc.,
2023 U.S. Dist. LEXIS 170965 (N.D. Ill. Sept. 19, 2023)………………………14, 15, 16
Leicht v. City of N.Y. Dep’t of Sanitation,
131 A.D.3d 515, 516 (2d Dept. 2015)…………………………………………………3
Lucky Brand Dungarees, Inc. v. Ally Apparel Res. LLC,
2009 U.S. Dist. LEXIS 35707, at *4-5 (S.D.N.Y. Apr. 6, 2009)………………………18
Marquart v. Yeshiva Machezikel Torah D’Chasidel Belz,
53 A.D.2d 688 (2d Dept. 1976)…………………………………………………………10
Martinez v. Roberts Consol. Indus.,
299 A.D.2d 399, 399-400 (2d Dept. 2002)…………………………………………3
Matter of Newark Val. Cent. School Dist. v. Public Empl. Relations Bd.,
83 N.Y.2d 315, 320 (1994)……………………………………………………………11
Miriam Osborn Mem. Home Assn.,
7 Misc. 3d 1004(A) (Westchester County 2005)………………………………………11
Rivkin v. Century 21 Teran Realty LLC, 4
94 F.3d 99, 103 (2nd Cir. 2007)………………………………………………………3
SEC v. Tourre,
950 F. Supp. 2d 666, 675 (S.D.N.Y. 2013)……………………………………………16
ii
3 of 25
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 11:36 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1824 RECEIVED NYSCEF: 03/11/2024
Snyder v. Wells Fargo Bank, N.A.,
2012 U.S. Dist. LEXIS 148873 (S.D.N.Y. Oct. 12, 2012).…………………………14, 18
Statutes and Other Authorities:
2010 N.Y. ALS 443, 2010 N.Y. LAWS 443, 2009 N.Y. A.N. 10443 (LexisNexis)……..………3
Real Property Law § 443………………………………………………………………11, 12, 13
iii
4 of 25
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 11:36 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1824 RECEIVED NYSCEF: 03/11/2024
Plaintiffs have disclosed their intent to offer opinion testimony from Thomas Cusack as a
purported “industry expert” who can explain to the jury “the candor, skill, care, and practices
expected of a New York real estate professional in the disclosure and conduct of dual agency.” 1
At class certification, the Court accepted Plaintiffs’ representation that Mr. Cusack’s “decades-
long experience in representing clients as a licensed real estate agent and in supervising real
estate agents for brokerage firms” made him “intimately familiar with the relevant industry
standards and practices that relate to the dual agency issue that is central to this putative class
action lawsuit . . . .” 2
But subsequent discovery has revealed that these representations were false. At his 2023
deposition, Mr. Cusack admitted that:
he has not practiced as an agent since the 1970s, and he has not practiced as a broker
since the 1980s, both of which pre-date New York’s adoption of the dual agency
system at issue in this case; 3
he has never personally acted as a dual or designated agent; 4
he has never provided a dual agency disclosure to a consumer; 5
1
HLEx.054 at 6-7
2
NYSCEF 1072 at 4.
3
HLEx.008 at 33:5-19 (“Well, my real estate transactions in New York were—were—as a
practitioner were prior to 1983 and 1979 when I became a manager of a real estate office here.
But I stopped practicing as a broker or as a licensee probably I would say somewhere in the
1970s.”).
4
Id. at 36:5-8 (Q: “At the time you were a practicing agent in New York, did you ever act as a
dual agent in a transaction?” A: “I would say professedly no.”), 37:5-8 (Q: “Sir, is it also true that
when you were a practicing real estate agent, you never acted as a designated dual agent in a dual
agency transaction?” A: “No, it wasn’t—no.”).
5
Id. at 37:23-38:2 (Q: “Have you ever in connection with a real estate transaction in New York
explained the real estate disclosure form to a consumer?” A: “No.”).
1
5 of 25
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 11:36 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1824 RECEIVED NYSCEF: 03/11/2024
he has never been present when a real estate agent in New York explained dual agency to
a client or obtained that client’s consent to dual agency; 6
he has never reviewed the dual agency-related training materials or disclosure materials
for any other broker in New York; 7
he is not familiar with the dual agency disclosure practices of any other New York
broker; 8 and
he does not even teach his own students how to have a dual agency disclosure
conversation or what such a conversation should include. 9
Based on these admissions and the additional information offered below, it is clear that
Mr. Cusack is not an expert on industry standards and practices related to dual agency and dual
agency disclosure as they actually exist in the State of New York. Moreover, any personal
opinions that Mr. Cusack has developed based on his reading of New York’s agency law and
review of the evidence are irrelevant and would invade the roles of the Court and the jury.
For all of these reasons, his testimony should be excluded both for purposes of the
summary judgement record and for trial.
ARGUMENT
Mr. Cusack is not an expert on the actual customs and practices within the
real estate brokerage industry during the class period.
“As a general rule the admissibility of expert testimony on a particular point is addressed
to the discretion of the trial court. . . . The guiding principle is that expert opinion is proper when
it would help to clarify an issue calling for professional or technical knowledge, possessed by the
expert and beyond the ken of the typical juror.” De Long v. Erie Cty., 60 N.Y.2d 296, 307 (1983).
6
Id. at 38:21-24 (Q: “Have you ever been present when a real estate agent in New York was
explaining the agency disclosure form to their client?” A: “No, I have not been.”).
7
Id. at 43:19-44:18, 202:7-203:9, 208:25-209:11, 210:23-211:11, 211:21-212:6.
8
Id.
9
Id. at 51:10-13 (Q: “In the salesperson course, you don’t teach your students how to actually
present the form to their clients; is that correct?” A: “No.”).
2
6 of 25
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 11:36 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1824 RECEIVED NYSCEF: 03/11/2024
It goes without saying that a witness who seeks to testify as an “expert” regarding the
customs and practices in an industry must establish that he or she has actual knowledge of those
customs and practices. Geddes v. Crown Equip. Corp., 273 A.D.2d 904, 905 (4th Dept. 2000)
(“Without even the semblance of a foundation based upon facts in the record or personal
knowledge, the opinion of plaintiff[s'] expert was purely speculative and, thus, lacked sufficient
probative force . . . .”); Leicht v. City of N.Y. Dep’t of Sanitation, 131 A.D.3d 515, 516 (2d Dept.
2015) (excluding expert where he “failed to present evidence that he had any practical
experience with, or personal knowledge of” the topic at issue); Martinez v. Roberts Consol.
Indus., 299 A.D.2d 399, 399-400 (2d Dept. 2002) (excluding expert where he “failed to present
evidence of any practical experience or personal knowledge in” the topic at issue).
Here, Mr. Cusack cannot satisfy this first, most basic prerequisite because he admits that
he does not have any knowledge regarding the actual customs and practices employed by New
York real estate agents in the field when obtaining dual agency consent from their clients. 10
As a preliminary matter, this case focuses on a real estate agent’s obligations when
obtaining consent to dual agency transactions under New York law. The concept of “dual
agency” for real estate agents was first memorialized in New York statutory law in 1992. Rivkin
v. Century 21 Teran Realty LLC, 494 F.3d 99, 103 (2nd Cir. 2007) (“New York's agency
disclosure law, which includes provisions for buyer's agents, was passed in 1991 and took effect
in 1992.”). And the concept of “dual agency with designated salespersons” was first
memorialized in New York law in 2011. 2010 N.Y. ALS 443, 2010 N.Y. LAWS 443, 2009 N.Y.
A.N. 10443 (LexisNexis).
10
HLEx.008 at 97:17-98:7 (Q: “Do you have any sense of—of what the actual practice in New
York is with respect to that?” A: “I—I don’t know what the—to comment about the actual
practice, I don’t have—I would be very surprised if it was a common practice.”).
3
7 of 25
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 11:36 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1824 RECEIVED NYSCEF: 03/11/2024
Mr. Cusack has not practiced as a real estate agent since the 1970s. 11 And he has not
acted as a real estate broker since 1990. 12 Given these timeframes, it is not surprising that Mr.
Cusack has never personally acted as a dual agent or a designated agent in any real estate
transaction. 13 Nor has he ever supervised or managed agents who participated in dual agency
transactions, given that he stopped acting as a manager in 1990. 14 He has also never provided a
dual agency disclosure to a client. 15 In fact, he has never even been present when an agent has
given such a disclosure to a client. 16 Thus, it is undisputed that Mr. Cusack does not have direct,
first-hand experience with the actual customs and practices employed by real estate agents and
brokers in New York generally—or in Westchester, Putnam and Dutchess counties specifically—
during the class period in this case.
Without such direct experience, Plaintiffs point to Mr. Cusack’s role as an “educator” to
justify his purported expertise. 17 But Mr. Cusack’s expert report and affidavit do not explain—or
11
HLEx.008 at 33:5-19 (“Well, my real estate transactions in New York were—were—as a
practitioner were prior to 1983 and 1979 when I became a manager of a real estate office here.
But I stopped practicing as a broker or as a licensee probably I would say somewhere in the
1970s.”).
12
Id. at 32:10-33:4 (Q: “When was the last time you actually acted as a real estate broker or sales
person in New York?” A: “When my license was renewed.” Q: “So in 1990?” A: “I think maybe
it was there.”).
13
Id. at 36:5-8 (Q: “At the time you were a practicing agent in New York, did you ever act as a
dual agent in a transaction?” A: “I would say professedly no.”), 37:5-8 (Q: “Sir, is it also true that
when you were a practicing real estate agent, you never acted as a designated dual agent in a dual
agency transaction?” A: “No, it wasn’t—no.”).
14
Id. at 38:21-24 (Q: “Have you ever been present when a real estate agent in New York was
explaining the agency disclosure form to their client?” A: “No, I have not been.”).
15
Id. at 37:23-38:2 (Q: “Have you ever in connection with a real estate transaction in New York
explained the real estate disclosure form to a consumer?” A: “No.”).
16
Id.
17
NYSCEF 1058 at 7 (“Mr. Cusack is fully familiar with the relevant accepted real estate
industry understandings and practices, having represented clients as a licensed agent, supervised
4
8 of 25
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 11:36 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1824 RECEIVED NYSCEF: 03/11/2024
even mention—how he would have become familiar with the actual customs and practices of
practicing real estate agents with respect to dual agency disclosures from teaching his courses.
And his 2023 deposition testimony demonstrates that the classes he teaches have nothing to do
with the actual customs and practices employed in the industry.
For example, Mr. Cusack testified that he teaches approximately 25 students each month
(or approximately 300 per year) who take his salesperson’s course for new licensees. 18 He also
teaches another 45 students each year who take his course for brokers. 19 Thus, between these two
courses, Mr. Cusack teaches approximately 345 students per year. 20 Most of these students are
not yet practicing real estate agents—indeed, they are taking Mr. Cusack’s course in order to
satisfy the education component of the licensing statute so that they can become real estate
agents. 21
Mr. Cusack’s experience teaching these mostly aspiring real estate agents has thus not
exposed him to the actual customs and practices within the real estate industry with respect to
agents for leading brokerage firms, and taught licensing and continuing education courses for
DOS for 30 years.”).
18
HLEx.008 at 114:10-115:5 (Cusack claims about 300 individuals take his pre-license
salesperson course, but he testified that this number could go as high as 40 per month, depending
on the strength of the real estate market.).
19
Id. at 115:25-116:5 (Q: “And how many students do you teach in your broker’s course each
year?” A: “We would have probably maybe 15. And we did it three times. So 45 people would
take the broker’s course.”).
20
During the class certification briefing, Plaintiffs vastly overstated the number of students
taught by Mr. Cusack, representing to this Court that Mr. Cusack had taught “tens, if not
hundreds, of thousands of aspiring and practicing real estate professionals.” NYSCEF 1058 at 1.
In reality, even if one were to assume that Mr. Cusack taught 500 students per year since 1990,
that would only be 17,000 students – well below the “tens—if not hundreds—of thousands”
stated by Plaintiffs.
21
HLEx.008 at 114:10-115:5 (Q: “Okay. So about 300—” A: “Newbies.” Q: “—newbies per
year take the pre-licensing salesperson’s course.” A: “In this market.”), 116:11-14 (Cusack
admits he has very few people take his continuing education course.).
5
9 of 25
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 11:36 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1824 RECEIVED NYSCEF: 03/11/2024
dual agency disclosure. When asked whether Houlihan Lawrence competitors in Westchester,
Putnam and Dutchess Counties such as Julia B. Fee Sotheby’s or Howard Hanna Rand Realty
have standardized their dual agency disclosures, Mr. Cusack admitted that he has “no idea”:
Q: So, sir, are you familiar with the dual agency disclosure practices at Julia B.
Fee Sotheby’s?
A: No, I am not.
Q: Are you familiar with the dual agency disclosure practices at Howard Hanna
Rand Realty?
A: . . . . So I can’t talk about what they’re doing down there [in Westchester,
Putnam and Duchess Counties]. 22
Q: -- so does Julia B. Fee Sotheby’s have a standard disclosure that all of their
agents give?
A: I – I have no idea. 23
Q: Does Howard Hanna Rand Real Estate have a standard disclosure that all of
their agents give to their clients?
A: I would want to look at that and find out what their standard disclosure was. 24
Indeed, Mr. Cusack was even unable to provide support for his general assertion that
there even is an industry practice in New York for brokers to standardize their agency disclosures
(although he tried mightily to avoid giving a straight answer):
Q: But I’m asking as a factual matter, are you testifying that you know personally
that there is an industry standard within New York where brokers have
standardized their agency disclosure so that all of their agents have a habit of
giving the same information –
A: No.
Q: -- to the consumer? Do you know that as a fact?
22
Id. at 43:19-44:18.
23
Id. at 202:7-13.
24
Id. at 202:22-203:2.
6
10 of 25
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 11:36 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1824 RECEIVED NYSCEF: 03/11/2024
A: Industry practice is for brokers to standardize their agency disclosure. I’m not
saying that there’s a standardized disclosure for all the brokers doing it the same
way. But I am telling you this: That yes, my experience and my expertise is they
all have a policy that standardizes how they – Ding a Ling Real Estate, Sold
Down the River Realty, Houlihan Lawrence, or wherever it is – has a policy about
how they want their licensees to promote or finish or explain this. Whatever it is.
I’m not saying it’s a good one. I’m not saying it’s standardized among all the
brokers. I’m saying here that they standardize it because they know how
important the – at least they perceive how important this is. That this thing must
be signed and in the file.
Q: Does Julia B. Fee Sotheby’s have a standardized disclosure policy?
A: I’m – I’m saying – I said yes, it is.
Q: What is it?
A: It could be – I don’t know what it is, but it could be don’t give it a second
thought.
Q: Okay.
A: It’s standardized. But there’s going to be – with every one of them, they are
going to address this and have a standard way so that all of their agents do it the
way they want them to do it.
Q: Does Coldwell Banker Realty – do they have a standardized disclosure policy?
A: I answered that. Yes.
Q: What is it?
A: Whatever it is. I don’t know what their form – their standardized procedure it,
but I know they got one.
Q: And how do you know they have one?
A: Because of the importance that the industry looks at this.
Q: You’re assuming they have one.
A: No, no. I said – I told you what I thought. And this is what I’m saying here.
They have a standardized way that they explain it.
Q: How do you know that they have a standardized way of –
A: Because –
Q: How do you explain it? How? How do you know, sir?
7
11 of 25
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 11:36 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1824 RECEIVED NYSCEF: 03/11/2024
A: Whatever – I know that they know the form – it has to be fulfilled. So what
their form – what their standardization is is theirs, but I know they got it.
Q: How do you know they don’t have a standardized policy on disclosure? How
do you know that?
A: Because they are responsible for at least the minimum.
Q: Does Compass Real Estate have a standardized disclosure policy so that all of
their agents give the same information to the consumer?
A: What the broker wants them to give to them.
Q: Yes.
A: Yeah.
Q: They do?
A: Yup.
Q: What is it?
A: I don’t know what it is, but –
Q: Have you ever seen it?
A: No.
Q: Has anyone ever told you that they have such a policy?
A: I’m telling you what I –
Q: And, sir, I understand –
A: No one’s ever told me that.
Q: What about Corcoran? Has anybody ever told [you] Corcoran has a
standardized agency disclosure policy?
A: No.
Q: What about Douglas [Elliman]? Anybody ever told you that Douglas [Elliman]
has a standardized disclosure policy?
A: It’s a – it’s – no, no.
Q: Keller Williams?
8
12 of 25
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 11:36 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1824 RECEIVED NYSCEF: 03/11/2024
A: No. 25
Based on this and similar deposition testimony and the absence of any explanation in his
expert report and affidavit, it is clear that Mr. Cusack does not have direct, personal knowledge
regarding any customs or practices employed by real estate agents or brokers with respect to dual
agency disclosures in New York.
The fact that Mr. Cusack teaches some agency-related material in his classes does not fill
this evidentiary void. First, regardless of what Mr. Cusack teaches to his students, Mr. Cusack
has no idea whether that material is representative of any actual custom, practice or standard
within the industry. Although his general syllabus is approved by the Department of State, Mr.
Cusack admitted at his deposition that nobody from the Department of State has ever audited or
sat in on his courses that he teaches. 26 Similarly, Mr. Cusack acknowledged that he has never sat
in on any other instructors’ courses that deal with agency or agency disclosure to determine
whether they teach the material in a similar way. 27 Thus, there is no basis for finding that Mr.
Cusack’s agency-related lessons are indicative of anything other than his own personal opinions
on what dual agency disclosures should entail. Such evidence is not probative of any industry-
wide customs, practices or standards.
Without evidence that he has actual knowledge of the actual agency disclosure practices
employed by real estate brokers and agents in New York, Mr. Cusack is simply unqualified to
provide expert testimony on what any such practices were during the class period. For this reason
alone, the Court should exclude his testimony.
25
Id. at 207:6-212:6.
26
Id. at 48:20-23.
27
Id. at 49:12-15.
9
13 of 25
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 11:36 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1824 RECEIVED NYSCEF: 03/11/2024
Even if Mr. Cusack had knowledge of industry customs and practices, his
proposed testimony invades the provinces of the Court and jury by
focusing primarily on conclusory, improper legal opinions.
Even if Mr. Cusack had the requisite knowledge of actual industry custom and practices
with respect to dual agency disclosure, the proposed opinions disclosed in his Report and
affidavit would be inadmissible because they consist of conclusory, legal opinions that invade the
provinces of both the Court and the jury.
For example, Mr. Cusack’s affidavit is riddled with statements regarding his
understanding of New York legislative history, the Department of State’s position on various
matters at various times, and obligations that he believes are imposed by New York law. 28 He
also seeks to tell the jury whether certain statements by agents were misleading, whether certain
Houlihan Lawrence employees “misframed” the duty of loyalty, whether certain agents made
statements that were “untrue” or “downplayed” the so-called “risks” of dual agency, and other
similarly conclusory statements. 29 To the extent any of these are relevant questions in the context
of this class action, they are disputed issues of fact that are for the jury – not a purported expert
witness – to decide. We discuss these categories below.
The Court should exclude Mr. Cusack’s statements regarding the law
and legislative history, which invade the role of the Court.
Instructing the jury on the governing legal standards in this case is indisputably a
question of law for the Court; it is not the proper subject of expert testimony. See, e.g., Episcopal
Diocese of Long Island v. St. Matthias Nondenominational Ministries, Inc., 157 A.D.3d 769, 771
(2d Dept. 2018) (“Expert opinion as to a legal conclusion is impermissible.”); Marquart v.
Yeshiva Machezikel Torah D’Chasidel Belz, 53 A.D.2d 688 (2d Dept. 1976) (“[T]he trial court
28
HLEx.009 at ¶¶ 3-5; see also, HLEx.054 at 1-2, 5-10.
29
HLEx.009 at ¶¶ 21, 22, 34, 38.
10
14 of 25
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 11:36 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1824 RECEIVED NYSCEF: 03/11/2024
erred in allowing the expert witness to usurp its function as the sole determiner of the law.”);
Miriam Osborn Mem. Home Assn., 7 Misc. 3d 1004(A) (Westchester County 2005) (collecting
cases) (“Expert opinions which embody legal conclusions interfere with the Court's duty to
interpret statutes and reach legal conclusions….[I]t is axiomatic that an expert is not permitted to
provide legal opinions, legal conclusions, or interpret legal terms; those roles fall solely within
the province of the court.”).
The same principle applies to legislative history—such topics are for the Court to
consider when interpreting a statute; they are not the proper subject of expert testimony. Matter
of Newark Val. Cent. School Dist. v. Public Empl. Relations Bd., 83 N.Y.2d 315, 320 (1994) (“if
the [issue] is one of statutory interpretation, dependent on discerning legislative intent, as
statutory construction. . . [this] is the function of the courts.”); see, e.g., G.F. Co. v. Pan Ocean
Shipping Co., 23 F.3d 1498, 1507 n.6 (9th Cir. 1994) (striking expert affidavits that explained
legislative history; “the interpretation of legislative history and the application of a statute to a
particular case are uniquely questions for the court”).
The following are examples of improper statements made by Mr. Cusack regarding his
understanding of the legal principles that he thinks govern this case, including both his
interpretation of Real Property Law § 443, its legislative history, and the supposed views of the
New York legislature and Department of State:
“Because a broker who acts on behalf of the buyer and seller in the same transaction
‘must necessarily be unfaithful to one or the other,’ eight states prohibit dual
agency. New York strongly discourages by requiring brokers to make ‘nothing less
than full and complete disclosure’ and obtain both clients’ ‘informed consent in
writing’ before acting as a dual agent.” 30
30
HLEx.009 at ¶ 7 (footnotes omitted; emphasis added). Mr. Cusack admitted at his deposition
that he has not actually reviewed the laws in any of the eight (8) states he references, and his
assertion that these states prohibit dual agency is based only on a Google search. HLEx.008 at
121:9-122:6, 138:5-21. In fact, Mr. Cusack is wrong – several of these states expressly permit a
11
15 of 25
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 11:36 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1824 RECEIVED NYSCEF: 03/11/2024
“New York enacted § 443 to address widespread undisclosed, non-consensual dual
agency, a ‘paramount concern’ for DOS, who opposed ‘legitimization of [even
disclosed] dual agency as a regular business practice.’ Consistent with its
‘longstanding disdain’ for dual agency, DOS used to urge consumers to make
brokers take ‘The Pledge’ never to practice dual agency, and still today warns them to
‘Be Wary of Dual Agency.’” 31
“Brokers who routinely practice dual agency have a heavy burden, because those
who fail to give their agents rigorous training and close supervision engage in
widespread undisclosed, non-consensual dual agency by default.” 32
“In 2007, New York amended § 443 to recognize Dual Agency with Designated Sales
Agents, which had been an industry practice. In a major victory for consumer
advocates, § 443 declared that Designated Sales Agents cannot provide ‘undivided
loyalty,’ overruling then-Secretary of State, Alexander Treadwell (R), who had
opined that Designated Sales Agents were ‘single agents.’” 33
“As late as 2011, however, HL’s ‘guru on agency,’ Lewis Arlt, the Scarsdale manager,
continued to teach contrary to § 443 that Designated Sales Agents provide ‘full
fiduciary loyalty’ and ‘completely unbiased representation.’” 34
“In reality, § 443 provides that Designated Sales Agents can never provide undivided
loyalty . . . .” 35
“The Form provides only a brief legalistic introduction to complex concepts, many
unique to real estate. It is merely the beginning of full disclosure.” 36
“By 1990, DOS, who oversees the New York State real estate industry, including the
licensure and discipline of real estate salespersons and brokers, was concerned that
brokers were frequently acting as undisclosed, non-consensual dual agents. By failing
to inform their clients about dual agency.” 37
“DOS pushed to outlaw dual agency. However, DOS, NYSAR, consumer lobbying
groups, and legislators ultimately agreed on § 443 as compromise legislation. RPS §
single broker to represent both clients in a transaction. See, e.g., HLEx.055; HLEx.056;
HLEx.057; HLEx.058.
31
HLEx.009 at ¶ 8 (footnotes omitted; emphasis added).
32
Id. at ¶ 10 (footnotes omitted; emphasis added).
33
Id. at ¶ 13 (footnotes omitted; emphasis added).
34
Id. at ¶ 14 (footnotes omitted; emphasis added).
35
Id. at ¶ 17 (emphasis added).
36
Id. at ¶ 23 (emphasis added).
37
HLEx.054 at 2 (emphasis added).
12
16 of 25
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 11:36 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1824 RECEIVED NYSCEF: 03/11/2024
443 allowed real estate brokers to continue to engage in dual agency. However, in a
major victory for DOS, § 443(6) preserved the New York common law prohibition
on dual agency unless and until the broker made full disclosure and obtained both
parties’ written informed consent. RPL § 443 added a requirement that brokers give
consumers, at ‘first substantive contact,’ a newly created disclosure form. That form
introduced consumers to the various agency relationships and codified the New York
common law requirement that brokers ‘explain’ the conflicts, risks, and
consequences of dual agency before representing both parties in the same
transaction.” 38
In short, § 443 meant to preserve and add to the disclosure of dual agency, and not
substitute or dilute it. By preserving New York common law’s longstanding and
strict limits on dual agency, DOS sought to prevent dual agency from becoming
a routine business practice. As DOS said at the time, ‘If dual agency is disclosed
properly, there isn’t anyone in their right mind who would agree to it.’ As for the
Form, DOS viewed it as a tool to help brokers better comply with New York
common law. And by requiring brokers to get the Form signed (with informed
consent), DOS created a simple enforcement mechanism – DOS could audit a
broker’s transaction files to discover whether even a threshold disclosure obligation
had been fulfilled.” 39
This list is not exhaustive. Mr. Cusack’s Report and affidavit – which were drafted with
the heavy assistance of counsel 40 – are replete with references to New York common law, the
Real Property Law, the intent of the Department of State, and other issues that are well beyond
the scope of any proper expert testimony. If the Court permits Mr. Cusack to testify at all – which
it should not given his lack of knowledge of actual industry standards and practices – it should
expressly prohibit him from testifying as to his understanding of New York law or its legislative
history and his opinion on the views of the Department of State, which would include but not be
limited to the above examples.
38
Id. (footnotes omitted; emphasis added).
39
Id. (footnotes omitted; emphasis added).
40
HLEx.008 at 13:9-17:22 (Cusack admits he did not write the report himself.), 19:18-20:24
(“So based upon the discussions [with counsel], then I would then say, okay, now—now, how
does it go together in the—in the—in the written form. So then after it goes together in the
written form, then it would be –it would be then emailed to me; and I would review it.”).
13
17 of 25
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 11:36 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1824 RECEIVED NYSCEF: 03/11/2024
The Court should also prohibit Mr. Cusack from regurgitating record
evidence and providing his gloss on the facts of the case – such
attempts to narrate the evidence through an “expert” are
improper.
It should go without saying that fact evidence should be presented through witnesses with
first-hand, personal knowledge; arguments should be made by lawyers; and disputed issues of
fact should be resolved by the jury. A party’s hired expert should not play a role in any of these
activities. Yet the balance of Mr. Cusack’s proffered testimony violates each one of these
fundamental principles.
Judge Scheindlin of the Southern District of New York persuasively addressed similar
deficiencies with proffered expert testimony in Snyder v. Wells Fargo Bank, N.A., 2012 U.S. Dist.
LEXIS 148873 (S.D.N.Y. Oct. 12, 2012). In that case, the plaintiff hired an expert to opine on
whether Wachovia had followed certain customs and practices in the securities industry. Id. at
*14. But the expert’s report was “replete with inappropriate statements” and “conclusions” that
largely rehashed record evidence. Id. For example, the court criticized the expert for “rehashing
and characterizing testimony,” summarizing what was said in meetings, and generally providing
a “summation from the witness stand, and address[ing] lay matters which the trier of fact is
capable of understanding and deciding without the expert’s help.” Id. at *15-16 (internal
quotation marks and citations omitted; alternations accepted). The court also criticized the
expert’s opining on witnesses’ credibility, such as by describing statements as “spurious,”
“disingenuous,” and “false.” Id. at *17. Judge Scheindlin concluded her opinion by stating that
the expert’s report was “so ridden with improper statements and opinions” that she “decline[d] to
identify the limited portions that might qualify as expert testimony.” Id. at *22.
A recent opinion from the Northern District of Illinois is also instructive. Kraft Foods
Glob., Inc. v. United Egg Producers, Inc., 2023 U.S. Dist. LEXIS 170965 (N.D. Ill. Sept. 19,
14
18 of 25
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 11:36 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1824 RECEIVED NYSCEF: 03/11/2024
2023). In that case, the court excluded those sections of a proffered expert’s testimony where the
expert “basically read the evidence and offered a conclusion” that “added an interpretive gloss
that aligned with the Plaintiffs’ theory of the case.” Id. at *8. As the court explained:
[A]n expert witness cannot merely read the evidence, and offer his own gloss on
the facts of the case. An expert is not a color commentator on the evidence. An
expert cannot merely argue the facts, or say what he would do if he sat on the
jury. It is the lawyer’s job, not an expert’s job, to make arguments about the
meaning of the exhibits. And it is the jury’s job, not an expert’s job, to weigh the
evidence and draw reasonable inferences.
Id. at *4-5.
Mr. Cusack’s report runs afoul of these restrictions. He spends page after page after page
rehashing emails and documents that were produced in discovery, and then adds his view on
whether they are misleading or false or consistent with some improper motivation. Here are just
a few examples:
“Arlt continued to mislead by teaching that Designated Sales Agents have ‘divided
loyalty’ only if they possess confidential information about the other client.” 41
“Arlt’s ‘work-around’ misframed the loss of undivided loyalty as essentially rare . . . and
risk -free . . . .” 42
“It was also untrue for HL to say that Designated Sales Agents are ‘totally unbiased’
and have ‘no connection’ to the other client, and that they should ‘think of the
company as the dual agent.’ It is also misleading to suggest that Dual Agency with
Designated Sales Agents is not ‘True Dual Agency,’ a term and relationship not
recognized in New York.” 43
“HL’s training, script and other ‘model disclosures’ glossed over HL’s conflict of
interest; hid the ‘shady’ nature of Dual Agency; obscured the ‘crippling’ fact and
reasons why Designated Sales Agent cannot provide undivided loyalty; and otherwise
portrayed Designated Sales Agents as a ‘solution’ to dual agency and equal to
‘independent representation.’ HL consistently downplayed or ignored the risks and
downsides of dual agency while exaggerating its purported benefits. In so doing,
HL’s standard disclosure gave consumers a self-serving sales pitch on dual agency
41
HLEx.009 at ¶ 22 (footnotes omitted; emphasis added).
42
Id. (emphasis added).
43
Id. at ¶ 34 (footnotes omitted; emphasis added).
15
19 of 25
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 11:36 AM INDEX NO. 60767/2018
NYSCEF DOC. NO. 1824 RECEIVED NYSCEF: 03/11/2024
rather tha
Preview
FILED: WESTCHESTER COUNTY CLERK 03/11/2024 11:36 AM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1824 RECEIVED NYSCEF: 03/11/2024 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF WESTCHESTER PAMELA GOLDSTEIN, ) ELLYN & TONY BERK as Administrators of ) the Estate of Winifred Berk, and PAUL ) BENJAMIN, on behalf of themselves and all ) MEMORANDUM OF LAW others similarly situated, ) ) Index No. 60767/2018 Plaintiffs, ) Hon. Linda S. Jamieson ) vs. ) ) HOULIHAN LAWRENCE INC., ) ) Defendant. ) ) HOULIHAN LAWRENCE’S MOTION TO STRIKE THOMAS CUSACK March 11, 2024 Robert D. MacGill (pro hac vice) Alfred E. Donnellan Scott E. Murray (pro hac vice) Nelida Lara Matthew T. Ciulla (pro hac vice) DELBELLO DONNELLAN WEINGARTEN MACGILL PC WISE & WIEDERKEHR LLP 156 E. Market St., Suite 1200 One North Lexington Ave, 11th Floor Indianapolis, IN 46204 White Plains, NY 10601 (317) 721-1253 (914) 681-0200 1 of 25 FILED: WESTCHESTER COUNTY CLERK 03/11/2024 11:36 AM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1824 RECEIVED NYSCEF: 03/11/2024 TABLE OF CONTENTS TABLE OF AUTHORITIES……………………………………………………………………...ii ARGUMENT……………………………………………………………………………...………2 Mr. Cusack is not an expert on the actual customs and practices within the real estate brokerage industry during the class period.………………………...2 Even if Mr. Cusack had knowledge of industry customs and practices, his proposed testimony invades the provinces of the Court and jury by focusing primarily on conclusory, improper legal opinions……………………..………10 The Court should exclude Mr. Cusack’s statements regarding the law and legislative history, which invade the role of the Court.………………………...……10 The Court should also prohibit Mr. Cusack from regurgitating record evidence and providing his gloss on the facts of the case – such attempts to narrate the evidence through an “expert” are improper.………………………………14 Separately, the Court should exclude Mr. Cusack’s email “audit” as unreliable.……..…17 CONCLUSION………………………………………………………………………………..…19 i 2 of 25 FILED: WESTCHESTER COUNTY CLERK 03/11/2024 11:36 AM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1824 RECEIVED NYSCEF: 03/11/2024 TABLE OF AUTHORITIES Case(s): Page(s): De Long v. Erie Cty., 60 N.Y.2d 296, 307 (1983).…………………………………………………………2 Episcopal Diocese of Long Island v. St. Matthias Nondenominational Ministries, Inc., 157 A.D.3d 769, 771 (2d Dept. 2018)………………………………………………10 G.F. Co. v. Pan Ocean Shipping Co., 23 F.3d 1498, 1507 n.6 (9th Cir. 1994)…………………………………………………11 Geddes v. Crown Equip. Corp., 273 A.D.2d 904, 905 (4th Dept. 2000)………………………………………………3 Kraft Foods Glob., Inc. v. United Egg Producers, Inc., 2023 U.S. Dist. LEXIS 170965 (N.D. Ill. Sept. 19, 2023)………………………14, 15, 16 Leicht v. City of N.Y. Dep’t of Sanitation, 131 A.D.3d 515, 516 (2d Dept. 2015)…………………………………………………3 Lucky Brand Dungarees, Inc. v. Ally Apparel Res. LLC, 2009 U.S. Dist. LEXIS 35707, at *4-5 (S.D.N.Y. Apr. 6, 2009)………………………18 Marquart v. Yeshiva Machezikel Torah D’Chasidel Belz, 53 A.D.2d 688 (2d Dept. 1976)…………………………………………………………10 Martinez v. Roberts Consol. Indus., 299 A.D.2d 399, 399-400 (2d Dept. 2002)…………………………………………3 Matter of Newark Val. Cent. School Dist. v. Public Empl. Relations Bd., 83 N.Y.2d 315, 320 (1994)……………………………………………………………11 Miriam Osborn Mem. Home Assn., 7 Misc. 3d 1004(A) (Westchester County 2005)………………………………………11 Rivkin v. Century 21 Teran Realty LLC, 4 94 F.3d 99, 103 (2nd Cir. 2007)………………………………………………………3 SEC v. Tourre, 950 F. Supp. 2d 666, 675 (S.D.N.Y. 2013)……………………………………………16 ii 3 of 25 FILED: WESTCHESTER COUNTY CLERK 03/11/2024 11:36 AM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1824 RECEIVED NYSCEF: 03/11/2024 Snyder v. Wells Fargo Bank, N.A., 2012 U.S. Dist. LEXIS 148873 (S.D.N.Y. Oct. 12, 2012).…………………………14, 18 Statutes and Other Authorities: 2010 N.Y. ALS 443, 2010 N.Y. LAWS 443, 2009 N.Y. A.N. 10443 (LexisNexis)……..………3 Real Property Law § 443………………………………………………………………11, 12, 13 iii 4 of 25 FILED: WESTCHESTER COUNTY CLERK 03/11/2024 11:36 AM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1824 RECEIVED NYSCEF: 03/11/2024 Plaintiffs have disclosed their intent to offer opinion testimony from Thomas Cusack as a purported “industry expert” who can explain to the jury “the candor, skill, care, and practices expected of a New York real estate professional in the disclosure and conduct of dual agency.” 1 At class certification, the Court accepted Plaintiffs’ representation that Mr. Cusack’s “decades- long experience in representing clients as a licensed real estate agent and in supervising real estate agents for brokerage firms” made him “intimately familiar with the relevant industry standards and practices that relate to the dual agency issue that is central to this putative class action lawsuit . . . .” 2 But subsequent discovery has revealed that these representations were false. At his 2023 deposition, Mr. Cusack admitted that: he has not practiced as an agent since the 1970s, and he has not practiced as a broker since the 1980s, both of which pre-date New York’s adoption of the dual agency system at issue in this case; 3 he has never personally acted as a dual or designated agent; 4 he has never provided a dual agency disclosure to a consumer; 5 1 HLEx.054 at 6-7 2 NYSCEF 1072 at 4. 3 HLEx.008 at 33:5-19 (“Well, my real estate transactions in New York were—were—as a practitioner were prior to 1983 and 1979 when I became a manager of a real estate office here. But I stopped practicing as a broker or as a licensee probably I would say somewhere in the 1970s.”). 4 Id. at 36:5-8 (Q: “At the time you were a practicing agent in New York, did you ever act as a dual agent in a transaction?” A: “I would say professedly no.”), 37:5-8 (Q: “Sir, is it also true that when you were a practicing real estate agent, you never acted as a designated dual agent in a dual agency transaction?” A: “No, it wasn’t—no.”). 5 Id. at 37:23-38:2 (Q: “Have you ever in connection with a real estate transaction in New York explained the real estate disclosure form to a consumer?” A: “No.”). 1 5 of 25 FILED: WESTCHESTER COUNTY CLERK 03/11/2024 11:36 AM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1824 RECEIVED NYSCEF: 03/11/2024 he has never been present when a real estate agent in New York explained dual agency to a client or obtained that client’s consent to dual agency; 6 he has never reviewed the dual agency-related training materials or disclosure materials for any other broker in New York; 7 he is not familiar with the dual agency disclosure practices of any other New York broker; 8 and he does not even teach his own students how to have a dual agency disclosure conversation or what such a conversation should include. 9 Based on these admissions and the additional information offered below, it is clear that Mr. Cusack is not an expert on industry standards and practices related to dual agency and dual agency disclosure as they actually exist in the State of New York. Moreover, any personal opinions that Mr. Cusack has developed based on his reading of New York’s agency law and review of the evidence are irrelevant and would invade the roles of the Court and the jury. For all of these reasons, his testimony should be excluded both for purposes of the summary judgement record and for trial. ARGUMENT Mr. Cusack is not an expert on the actual customs and practices within the real estate brokerage industry during the class period. “As a general rule the admissibility of expert testimony on a particular point is addressed to the discretion of the trial court. . . . The guiding principle is that expert opinion is proper when it would help to clarify an issue calling for professional or technical knowledge, possessed by the expert and beyond the ken of the typical juror.” De Long v. Erie Cty., 60 N.Y.2d 296, 307 (1983). 6 Id. at 38:21-24 (Q: “Have you ever been present when a real estate agent in New York was explaining the agency disclosure form to their client?” A: “No, I have not been.”). 7 Id. at 43:19-44:18, 202:7-203:9, 208:25-209:11, 210:23-211:11, 211:21-212:6. 8 Id. 9 Id. at 51:10-13 (Q: “In the salesperson course, you don’t teach your students how to actually present the form to their clients; is that correct?” A: “No.”). 2 6 of 25 FILED: WESTCHESTER COUNTY CLERK 03/11/2024 11:36 AM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1824 RECEIVED NYSCEF: 03/11/2024 It goes without saying that a witness who seeks to testify as an “expert” regarding the customs and practices in an industry must establish that he or she has actual knowledge of those customs and practices. Geddes v. Crown Equip. Corp., 273 A.D.2d 904, 905 (4th Dept. 2000) (“Without even the semblance of a foundation based upon facts in the record or personal knowledge, the opinion of plaintiff[s'] expert was purely speculative and, thus, lacked sufficient probative force . . . .”); Leicht v. City of N.Y. Dep’t of Sanitation, 131 A.D.3d 515, 516 (2d Dept. 2015) (excluding expert where he “failed to present evidence that he had any practical experience with, or personal knowledge of” the topic at issue); Martinez v. Roberts Consol. Indus., 299 A.D.2d 399, 399-400 (2d Dept. 2002) (excluding expert where he “failed to present evidence of any practical experience or personal knowledge in” the topic at issue). Here, Mr. Cusack cannot satisfy this first, most basic prerequisite because he admits that he does not have any knowledge regarding the actual customs and practices employed by New York real estate agents in the field when obtaining dual agency consent from their clients. 10 As a preliminary matter, this case focuses on a real estate agent’s obligations when obtaining consent to dual agency transactions under New York law. The concept of “dual agency” for real estate agents was first memorialized in New York statutory law in 1992. Rivkin v. Century 21 Teran Realty LLC, 494 F.3d 99, 103 (2nd Cir. 2007) (“New York's agency disclosure law, which includes provisions for buyer's agents, was passed in 1991 and took effect in 1992.”). And the concept of “dual agency with designated salespersons” was first memorialized in New York law in 2011. 2010 N.Y. ALS 443, 2010 N.Y. LAWS 443, 2009 N.Y. A.N. 10443 (LexisNexis). 10 HLEx.008 at 97:17-98:7 (Q: “Do you have any sense of—of what the actual practice in New York is with respect to that?” A: “I—I don’t know what the—to comment about the actual practice, I don’t have—I would be very surprised if it was a common practice.”). 3 7 of 25 FILED: WESTCHESTER COUNTY CLERK 03/11/2024 11:36 AM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1824 RECEIVED NYSCEF: 03/11/2024 Mr. Cusack has not practiced as a real estate agent since the 1970s. 11 And he has not acted as a real estate broker since 1990. 12 Given these timeframes, it is not surprising that Mr. Cusack has never personally acted as a dual agent or a designated agent in any real estate transaction. 13 Nor has he ever supervised or managed agents who participated in dual agency transactions, given that he stopped acting as a manager in 1990. 14 He has also never provided a dual agency disclosure to a client. 15 In fact, he has never even been present when an agent has given such a disclosure to a client. 16 Thus, it is undisputed that Mr. Cusack does not have direct, first-hand experience with the actual customs and practices employed by real estate agents and brokers in New York generally—or in Westchester, Putnam and Dutchess counties specifically— during the class period in this case. Without such direct experience, Plaintiffs point to Mr. Cusack’s role as an “educator” to justify his purported expertise. 17 But Mr. Cusack’s expert report and affidavit do not explain—or 11 HLEx.008 at 33:5-19 (“Well, my real estate transactions in New York were—were—as a practitioner were prior to 1983 and 1979 when I became a manager of a real estate office here. But I stopped practicing as a broker or as a licensee probably I would say somewhere in the 1970s.”). 12 Id. at 32:10-33:4 (Q: “When was the last time you actually acted as a real estate broker or sales person in New York?” A: “When my license was renewed.” Q: “So in 1990?” A: “I think maybe it was there.”). 13 Id. at 36:5-8 (Q: “At the time you were a practicing agent in New York, did you ever act as a dual agent in a transaction?” A: “I would say professedly no.”), 37:5-8 (Q: “Sir, is it also true that when you were a practicing real estate agent, you never acted as a designated dual agent in a dual agency transaction?” A: “No, it wasn’t—no.”). 14 Id. at 38:21-24 (Q: “Have you ever been present when a real estate agent in New York was explaining the agency disclosure form to their client?” A: “No, I have not been.”). 15 Id. at 37:23-38:2 (Q: “Have you ever in connection with a real estate transaction in New York explained the real estate disclosure form to a consumer?” A: “No.”). 16 Id. 17 NYSCEF 1058 at 7 (“Mr. Cusack is fully familiar with the relevant accepted real estate industry understandings and practices, having represented clients as a licensed agent, supervised 4 8 of 25 FILED: WESTCHESTER COUNTY CLERK 03/11/2024 11:36 AM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1824 RECEIVED NYSCEF: 03/11/2024 even mention—how he would have become familiar with the actual customs and practices of practicing real estate agents with respect to dual agency disclosures from teaching his courses. And his 2023 deposition testimony demonstrates that the classes he teaches have nothing to do with the actual customs and practices employed in the industry. For example, Mr. Cusack testified that he teaches approximately 25 students each month (or approximately 300 per year) who take his salesperson’s course for new licensees. 18 He also teaches another 45 students each year who take his course for brokers. 19 Thus, between these two courses, Mr. Cusack teaches approximately 345 students per year. 20 Most of these students are not yet practicing real estate agents—indeed, they are taking Mr. Cusack’s course in order to satisfy the education component of the licensing statute so that they can become real estate agents. 21 Mr. Cusack’s experience teaching these mostly aspiring real estate agents has thus not exposed him to the actual customs and practices within the real estate industry with respect to agents for leading brokerage firms, and taught licensing and continuing education courses for DOS for 30 years.”). 18 HLEx.008 at 114:10-115:5 (Cusack claims about 300 individuals take his pre-license salesperson course, but he testified that this number could go as high as 40 per month, depending on the strength of the real estate market.). 19 Id. at 115:25-116:5 (Q: “And how many students do you teach in your broker’s course each year?” A: “We would have probably maybe 15. And we did it three times. So 45 people would take the broker’s course.”). 20 During the class certification briefing, Plaintiffs vastly overstated the number of students taught by Mr. Cusack, representing to this Court that Mr. Cusack had taught “tens, if not hundreds, of thousands of aspiring and practicing real estate professionals.” NYSCEF 1058 at 1. In reality, even if one were to assume that Mr. Cusack taught 500 students per year since 1990, that would only be 17,000 students – well below the “tens—if not hundreds—of thousands” stated by Plaintiffs. 21 HLEx.008 at 114:10-115:5 (Q: “Okay. So about 300—” A: “Newbies.” Q: “—newbies per year take the pre-licensing salesperson’s course.” A: “In this market.”), 116:11-14 (Cusack admits he has very few people take his continuing education course.). 5 9 of 25 FILED: WESTCHESTER COUNTY CLERK 03/11/2024 11:36 AM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1824 RECEIVED NYSCEF: 03/11/2024 dual agency disclosure. When asked whether Houlihan Lawrence competitors in Westchester, Putnam and Dutchess Counties such as Julia B. Fee Sotheby’s or Howard Hanna Rand Realty have standardized their dual agency disclosures, Mr. Cusack admitted that he has “no idea”: Q: So, sir, are you familiar with the dual agency disclosure practices at Julia B. Fee Sotheby’s? A: No, I am not. Q: Are you familiar with the dual agency disclosure practices at Howard Hanna Rand Realty? A: . . . . So I can’t talk about what they’re doing down there [in Westchester, Putnam and Duchess Counties]. 22 Q: -- so does Julia B. Fee Sotheby’s have a standard disclosure that all of their agents give? A: I – I have no idea. 23 Q: Does Howard Hanna Rand Real Estate have a standard disclosure that all of their agents give to their clients? A: I would want to look at that and find out what their standard disclosure was. 24 Indeed, Mr. Cusack was even unable to provide support for his general assertion that there even is an industry practice in New York for brokers to standardize their agency disclosures (although he tried mightily to avoid giving a straight answer): Q: But I’m asking as a factual matter, are you testifying that you know personally that there is an industry standard within New York where brokers have standardized their agency disclosure so that all of their agents have a habit of giving the same information – A: No. Q: -- to the consumer? Do you know that as a fact? 22 Id. at 43:19-44:18. 23 Id. at 202:7-13. 24 Id. at 202:22-203:2. 6 10 of 25 FILED: WESTCHESTER COUNTY CLERK 03/11/2024 11:36 AM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1824 RECEIVED NYSCEF: 03/11/2024 A: Industry practice is for brokers to standardize their agency disclosure. I’m not saying that there’s a standardized disclosure for all the brokers doing it the same way. But I am telling you this: That yes, my experience and my expertise is they all have a policy that standardizes how they – Ding a Ling Real Estate, Sold Down the River Realty, Houlihan Lawrence, or wherever it is – has a policy about how they want their licensees to promote or finish or explain this. Whatever it is. I’m not saying it’s a good one. I’m not saying it’s standardized among all the brokers. I’m saying here that they standardize it because they know how important the – at least they perceive how important this is. That this thing must be signed and in the file. Q: Does Julia B. Fee Sotheby’s have a standardized disclosure policy? A: I’m – I’m saying – I said yes, it is. Q: What is it? A: It could be – I don’t know what it is, but it could be don’t give it a second thought. Q: Okay. A: It’s standardized. But there’s going to be – with every one of them, they are going to address this and have a standard way so that all of their agents do it the way they want them to do it. Q: Does Coldwell Banker Realty – do they have a standardized disclosure policy? A: I answered that. Yes. Q: What is it? A: Whatever it is. I don’t know what their form – their standardized procedure it, but I know they got one. Q: And how do you know they have one? A: Because of the importance that the industry looks at this. Q: You’re assuming they have one. A: No, no. I said – I told you what I thought. And this is what I’m saying here. They have a standardized way that they explain it. Q: How do you know that they have a standardized way of – A: Because – Q: How do you explain it? How? How do you know, sir? 7 11 of 25 FILED: WESTCHESTER COUNTY CLERK 03/11/2024 11:36 AM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1824 RECEIVED NYSCEF: 03/11/2024 A: Whatever – I know that they know the form – it has to be fulfilled. So what their form – what their standardization is is theirs, but I know they got it. Q: How do you know they don’t have a standardized policy on disclosure? How do you know that? A: Because they are responsible for at least the minimum. Q: Does Compass Real Estate have a standardized disclosure policy so that all of their agents give the same information to the consumer? A: What the broker wants them to give to them. Q: Yes. A: Yeah. Q: They do? A: Yup. Q: What is it? A: I don’t know what it is, but – Q: Have you ever seen it? A: No. Q: Has anyone ever told you that they have such a policy? A: I’m telling you what I – Q: And, sir, I understand – A: No one’s ever told me that. Q: What about Corcoran? Has anybody ever told [you] Corcoran has a standardized agency disclosure policy? A: No. Q: What about Douglas [Elliman]? Anybody ever told you that Douglas [Elliman] has a standardized disclosure policy? A: It’s a – it’s – no, no. Q: Keller Williams? 8 12 of 25 FILED: WESTCHESTER COUNTY CLERK 03/11/2024 11:36 AM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1824 RECEIVED NYSCEF: 03/11/2024 A: No. 25 Based on this and similar deposition testimony and the absence of any explanation in his expert report and affidavit, it is clear that Mr. Cusack does not have direct, personal knowledge regarding any customs or practices employed by real estate agents or brokers with respect to dual agency disclosures in New York. The fact that Mr. Cusack teaches some agency-related material in his classes does not fill this evidentiary void. First, regardless of what Mr. Cusack teaches to his students, Mr. Cusack has no idea whether that material is representative of any actual custom, practice or standard within the industry. Although his general syllabus is approved by the Department of State, Mr. Cusack admitted at his deposition that nobody from the Department of State has ever audited or sat in on his courses that he teaches. 26 Similarly, Mr. Cusack acknowledged that he has never sat in on any other instructors’ courses that deal with agency or agency disclosure to determine whether they teach the material in a similar way. 27 Thus, there is no basis for finding that Mr. Cusack’s agency-related lessons are indicative of anything other than his own personal opinions on what dual agency disclosures should entail. Such evidence is not probative of any industry- wide customs, practices or standards. Without evidence that he has actual knowledge of the actual agency disclosure practices employed by real estate brokers and agents in New York, Mr. Cusack is simply unqualified to provide expert testimony on what any such practices were during the class period. For this reason alone, the Court should exclude his testimony. 25 Id. at 207:6-212:6. 26 Id. at 48:20-23. 27 Id. at 49:12-15. 9 13 of 25 FILED: WESTCHESTER COUNTY CLERK 03/11/2024 11:36 AM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1824 RECEIVED NYSCEF: 03/11/2024 Even if Mr. Cusack had knowledge of industry customs and practices, his proposed testimony invades the provinces of the Court and jury by focusing primarily on conclusory, improper legal opinions. Even if Mr. Cusack had the requisite knowledge of actual industry custom and practices with respect to dual agency disclosure, the proposed opinions disclosed in his Report and affidavit would be inadmissible because they consist of conclusory, legal opinions that invade the provinces of both the Court and the jury. For example, Mr. Cusack’s affidavit is riddled with statements regarding his understanding of New York legislative history, the Department of State’s position on various matters at various times, and obligations that he believes are imposed by New York law. 28 He also seeks to tell the jury whether certain statements by agents were misleading, whether certain Houlihan Lawrence employees “misframed” the duty of loyalty, whether certain agents made statements that were “untrue” or “downplayed” the so-called “risks” of dual agency, and other similarly conclusory statements. 29 To the extent any of these are relevant questions in the context of this class action, they are disputed issues of fact that are for the jury – not a purported expert witness – to decide. We discuss these categories below. The Court should exclude Mr. Cusack’s statements regarding the law and legislative history, which invade the role of the Court. Instructing the jury on the governing legal standards in this case is indisputably a question of law for the Court; it is not the proper subject of expert testimony. See, e.g., Episcopal Diocese of Long Island v. St. Matthias Nondenominational Ministries, Inc., 157 A.D.3d 769, 771 (2d Dept. 2018) (“Expert opinion as to a legal conclusion is impermissible.”); Marquart v. Yeshiva Machezikel Torah D’Chasidel Belz, 53 A.D.2d 688 (2d Dept. 1976) (“[T]he trial court 28 HLEx.009 at ¶¶ 3-5; see also, HLEx.054 at 1-2, 5-10. 29 HLEx.009 at ¶¶ 21, 22, 34, 38. 10 14 of 25 FILED: WESTCHESTER COUNTY CLERK 03/11/2024 11:36 AM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1824 RECEIVED NYSCEF: 03/11/2024 erred in allowing the expert witness to usurp its function as the sole determiner of the law.”); Miriam Osborn Mem. Home Assn., 7 Misc. 3d 1004(A) (Westchester County 2005) (collecting cases) (“Expert opinions which embody legal conclusions interfere with the Court's duty to interpret statutes and reach legal conclusions….[I]t is axiomatic that an expert is not permitted to provide legal opinions, legal conclusions, or interpret legal terms; those roles fall solely within the province of the court.”). The same principle applies to legislative history—such topics are for the Court to consider when interpreting a statute; they are not the proper subject of expert testimony. Matter of Newark Val. Cent. School Dist. v. Public Empl. Relations Bd., 83 N.Y.2d 315, 320 (1994) (“if the [issue] is one of statutory interpretation, dependent on discerning legislative intent, as statutory construction. . . [this] is the function of the courts.”); see, e.g., G.F. Co. v. Pan Ocean Shipping Co., 23 F.3d 1498, 1507 n.6 (9th Cir. 1994) (striking expert affidavits that explained legislative history; “the interpretation of legislative history and the application of a statute to a particular case are uniquely questions for the court”). The following are examples of improper statements made by Mr. Cusack regarding his understanding of the legal principles that he thinks govern this case, including both his interpretation of Real Property Law § 443, its legislative history, and the supposed views of the New York legislature and Department of State: “Because a broker who acts on behalf of the buyer and seller in the same transaction ‘must necessarily be unfaithful to one or the other,’ eight states prohibit dual agency. New York strongly discourages by requiring brokers to make ‘nothing less than full and complete disclosure’ and obtain both clients’ ‘informed consent in writing’ before acting as a dual agent.” 30 30 HLEx.009 at ¶ 7 (footnotes omitted; emphasis added). Mr. Cusack admitted at his deposition that he has not actually reviewed the laws in any of the eight (8) states he references, and his assertion that these states prohibit dual agency is based only on a Google search. HLEx.008 at 121:9-122:6, 138:5-21. In fact, Mr. Cusack is wrong – several of these states expressly permit a 11 15 of 25 FILED: WESTCHESTER COUNTY CLERK 03/11/2024 11:36 AM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1824 RECEIVED NYSCEF: 03/11/2024 “New York enacted § 443 to address widespread undisclosed, non-consensual dual agency, a ‘paramount concern’ for DOS, who opposed ‘legitimization of [even disclosed] dual agency as a regular business practice.’ Consistent with its ‘longstanding disdain’ for dual agency, DOS used to urge consumers to make brokers take ‘The Pledge’ never to practice dual agency, and still today warns them to ‘Be Wary of Dual Agency.’” 31 “Brokers who routinely practice dual agency have a heavy burden, because those who fail to give their agents rigorous training and close supervision engage in widespread undisclosed, non-consensual dual agency by default.” 32 “In 2007, New York amended § 443 to recognize Dual Agency with Designated Sales Agents, which had been an industry practice. In a major victory for consumer advocates, § 443 declared that Designated Sales Agents cannot provide ‘undivided loyalty,’ overruling then-Secretary of State, Alexander Treadwell (R), who had opined that Designated Sales Agents were ‘single agents.’” 33 “As late as 2011, however, HL’s ‘guru on agency,’ Lewis Arlt, the Scarsdale manager, continued to teach contrary to § 443 that Designated Sales Agents provide ‘full fiduciary loyalty’ and ‘completely unbiased representation.’” 34 “In reality, § 443 provides that Designated Sales Agents can never provide undivided loyalty . . . .” 35 “The Form provides only a brief legalistic introduction to complex concepts, many unique to real estate. It is merely the beginning of full disclosure.” 36 “By 1990, DOS, who oversees the New York State real estate industry, including the licensure and discipline of real estate salespersons and brokers, was concerned that brokers were frequently acting as undisclosed, non-consensual dual agents. By failing to inform their clients about dual agency.” 37 “DOS pushed to outlaw dual agency. However, DOS, NYSAR, consumer lobbying groups, and legislators ultimately agreed on § 443 as compromise legislation. RPS § single broker to represent both clients in a transaction. See, e.g., HLEx.055; HLEx.056; HLEx.057; HLEx.058. 31 HLEx.009 at ¶ 8 (footnotes omitted; emphasis added). 32 Id. at ¶ 10 (footnotes omitted; emphasis added). 33 Id. at ¶ 13 (footnotes omitted; emphasis added). 34 Id. at ¶ 14 (footnotes omitted; emphasis added). 35 Id. at ¶ 17 (emphasis added). 36 Id. at ¶ 23 (emphasis added). 37 HLEx.054 at 2 (emphasis added). 12 16 of 25 FILED: WESTCHESTER COUNTY CLERK 03/11/2024 11:36 AM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1824 RECEIVED NYSCEF: 03/11/2024 443 allowed real estate brokers to continue to engage in dual agency. However, in a major victory for DOS, § 443(6) preserved the New York common law prohibition on dual agency unless and until the broker made full disclosure and obtained both parties’ written informed consent. RPL § 443 added a requirement that brokers give consumers, at ‘first substantive contact,’ a newly created disclosure form. That form introduced consumers to the various agency relationships and codified the New York common law requirement that brokers ‘explain’ the conflicts, risks, and consequences of dual agency before representing both parties in the same transaction.” 38 In short, § 443 meant to preserve and add to the disclosure of dual agency, and not substitute or dilute it. By preserving New York common law’s longstanding and strict limits on dual agency, DOS sought to prevent dual agency from becoming a routine business practice. As DOS said at the time, ‘If dual agency is disclosed properly, there isn’t anyone in their right mind who would agree to it.’ As for the Form, DOS viewed it as a tool to help brokers better comply with New York common law. And by requiring brokers to get the Form signed (with informed consent), DOS created a simple enforcement mechanism – DOS could audit a broker’s transaction files to discover whether even a threshold disclosure obligation had been fulfilled.” 39 This list is not exhaustive. Mr. Cusack’s Report and affidavit – which were drafted with the heavy assistance of counsel 40 – are replete with references to New York common law, the Real Property Law, the intent of the Department of State, and other issues that are well beyond the scope of any proper expert testimony. If the Court permits Mr. Cusack to testify at all – which it should not given his lack of knowledge of actual industry standards and practices – it should expressly prohibit him from testifying as to his understanding of New York law or its legislative history and his opinion on the views of the Department of State, which would include but not be limited to the above examples. 38 Id. (footnotes omitted; emphasis added). 39 Id. (footnotes omitted; emphasis added). 40 HLEx.008 at 13:9-17:22 (Cusack admits he did not write the report himself.), 19:18-20:24 (“So based upon the discussions [with counsel], then I would then say, okay, now—now, how does it go together in the—in the—in the written form. So then after it goes together in the written form, then it would be –it would be then emailed to me; and I would review it.”). 13 17 of 25 FILED: WESTCHESTER COUNTY CLERK 03/11/2024 11:36 AM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1824 RECEIVED NYSCEF: 03/11/2024 The Court should also prohibit Mr. Cusack from regurgitating record evidence and providing his gloss on the facts of the case – such attempts to narrate the evidence through an “expert” are improper. It should go without saying that fact evidence should be presented through witnesses with first-hand, personal knowledge; arguments should be made by lawyers; and disputed issues of fact should be resolved by the jury. A party’s hired expert should not play a role in any of these activities. Yet the balance of Mr. Cusack’s proffered testimony violates each one of these fundamental principles. Judge Scheindlin of the Southern District of New York persuasively addressed similar deficiencies with proffered expert testimony in Snyder v. Wells Fargo Bank, N.A., 2012 U.S. Dist. LEXIS 148873 (S.D.N.Y. Oct. 12, 2012). In that case, the plaintiff hired an expert to opine on whether Wachovia had followed certain customs and practices in the securities industry. Id. at *14. But the expert’s report was “replete with inappropriate statements” and “conclusions” that largely rehashed record evidence. Id. For example, the court criticized the expert for “rehashing and characterizing testimony,” summarizing what was said in meetings, and generally providing a “summation from the witness stand, and address[ing] lay matters which the trier of fact is capable of understanding and deciding without the expert’s help.” Id. at *15-16 (internal quotation marks and citations omitted; alternations accepted). The court also criticized the expert’s opining on witnesses’ credibility, such as by describing statements as “spurious,” “disingenuous,” and “false.” Id. at *17. Judge Scheindlin concluded her opinion by stating that the expert’s report was “so ridden with improper statements and opinions” that she “decline[d] to identify the limited portions that might qualify as expert testimony.” Id. at *22. A recent opinion from the Northern District of Illinois is also instructive. Kraft Foods Glob., Inc. v. United Egg Producers, Inc., 2023 U.S. Dist. LEXIS 170965 (N.D. Ill. Sept. 19, 14 18 of 25 FILED: WESTCHESTER COUNTY CLERK 03/11/2024 11:36 AM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1824 RECEIVED NYSCEF: 03/11/2024 2023). In that case, the court excluded those sections of a proffered expert’s testimony where the expert “basically read the evidence and offered a conclusion” that “added an interpretive gloss that aligned with the Plaintiffs’ theory of the case.” Id. at *8. As the court explained: [A]n expert witness cannot merely read the evidence, and offer his own gloss on the facts of the case. An expert is not a color commentator on the evidence. An expert cannot merely argue the facts, or say what he would do if he sat on the jury. It is the lawyer’s job, not an expert’s job, to make arguments about the meaning of the exhibits. And it is the jury’s job, not an expert’s job, to weigh the evidence and draw reasonable inferences. Id. at *4-5. Mr. Cusack’s report runs afoul of these restrictions. He spends page after page after page rehashing emails and documents that were produced in discovery, and then adds his view on whether they are misleading or false or consistent with some improper motivation. Here are just a few examples: “Arlt continued to mislead by teaching that Designated Sales Agents have ‘divided loyalty’ only if they possess confidential information about the other client.” 41 “Arlt’s ‘work-around’ misframed the loss of undivided loyalty as essentially rare . . . and risk -free . . . .” 42 “It was also untrue for HL to say that Designated Sales Agents are ‘totally unbiased’ and have ‘no connection’ to the other client, and that they should ‘think of the company as the dual agent.’ It is also misleading to suggest that Dual Agency with Designated Sales Agents is not ‘True Dual Agency,’ a term and relationship not recognized in New York.” 43 “HL’s training, script and other ‘model disclosures’ glossed over HL’s conflict of interest; hid the ‘shady’ nature of Dual Agency; obscured the ‘crippling’ fact and reasons why Designated Sales Agent cannot provide undivided loyalty; and otherwise portrayed Designated Sales Agents as a ‘solution’ to dual agency and equal to ‘independent representation.’ HL consistently downplayed or ignored the risks and downsides of dual agency while exaggerating its purported benefits. In so doing, HL’s standard disclosure gave consumers a self-serving sales pitch on dual agency 41 HLEx.009 at ¶ 22 (footnotes omitted; emphasis added). 42 Id. (emphasis added). 43 Id. at ¶ 34 (footnotes omitted; emphasis added). 15 19 of 25 FILED: WESTCHESTER COUNTY CLERK 03/11/2024 11:36 AM INDEX NO. 60767/2018 NYSCEF DOC. NO. 1824 RECEIVED NYSCEF: 03/11/2024 rather tha