Preview
Filed 13 Ma’ 17 P4:10
Chris Daniel - District Clerk
Harris Coun!
ED101) 017493838
By: Carla E. Carrillo
CAUSE NO. 2010-63264
CADENCE BANK
fik/a ENCORE BANK
IN THE DISTRICT COURT
Plaintiff,
Vv.
OF HARRIS COUNTY, TEXAS
ALLEN L. BERRY;
JOSEPH D. MCCORD;
and ROBERT G. TAYLOR, II,
Defendants. 152™ JUDICIAL DISTRICT
MOTION TO STRIKE DEFENDANTS’ EXPERTS RICHARD STANFORD
AND DAVID BLANCETT
Plaintiff Cadence Bank f/k/a Encore Bank (‘Plaintiff’) files this Motion to Strike
Defendants’ Experts Richard Stanford and David Blancett (the “Motion”), and respectfully
shows the Court as follows:
1 INTRODUCTION
1 Defendants have created endless roadblocks to avoid paying Plaintiff the more
than $4 million they personally guaranteed. Instead of paying Plaintiff the debt they owe,
Defendants have enlisted (and are undoubtedly paying) numerous “experts” that will presumably
opine that Defendants are not liable to Plaintiff.
2. In an effort to hamper Plaintiffs ability to present its case to the Court,
Defendants refuse to present their witnesses for deposition. Defendants quashed their own
depositions and have repeatedly informed Plaintiff they will not present any of their witnesses,
experts included, until all of Plaintiff's witnesses have been deposed. By using this strategy,
Defendants apparently intend to prevent Plaintiff from deposing their “experts” in advance of
trial or the discovery deadlines.
3 As a result of Defendants’ dilatory tactics, Plaintiff is forced to file this Motion
without the benefit of deposing Defendants’ “experts” -- despite the fact that neither expert
provided a report. Thus, Plaintiff reserves the right to supplement this Motion after fully
deposing Defendants’ designated experts.
4 However, despite Defendants’ absolute refusal to make their witnesses available
for deposition, it is patently obvious from their expert designations that Richard Stanford
(“Stanford”) and David Blancett (“Blancett”) will not offer admissible testimony in this case and
should be stricken. Each of these gentlemen intends to offer opinions related to maritime law
and maritime financing. Simply put, this case involves Texas contract law — not maritime law.
Defendants’ experts should be stricken.
il. FACTUAL BACKGROUND
5 Defendants are members of BLyn II Holding, LLC ("BLyn"). In March 2007,
BLyn and Encore entered into a Letter Agreement regarding a $6 million loan to BLyn from
Encore for the refurbishment of the Betty Lyn II, a motor yacht. The loan was evidenced by a
Promissory Note in favor of Encore.
6 As additional security for the loan, Defendants personally guaranteed the loan
from Encore to BLyn. Defendants "absolutely and unconditionally guarantee[d] full and
punctual payment and satisfaction of the Indebtedness of Borrower to Lender, and the
performance and discharge of all Borrower's obligations under the Note and the Related
Documents." Defendants expressly acknowledged that Encore would not have loaned BLyn
funds without the personal guarantees of the Defendants. Pursuant to the Guaranty Agreements,
each Defendant is jointly and severally liable for payment of the Promissory Note.
7. The Promissory Note was amended on several occasions at the request, and with
the consent, of Defendants. Each time, Encore extended the maturity date on the loan for the
benefit of Defendants. The Note finally matured on March 15, 2012, when the entire amount of
unpaid principal and interest became due and payable. The Promissory Note was not repaid by
BLyn! on March 15, 2012.
8 When Defendants were asked to honor their obligations under the Guaranty
Agreements, Defendants stalled. Despite repeated admissions from Defendants to Encore that
they owe the outstanding balance on the Promissory Note ~ and despite repeated promises to pay
~ Defendants have refused to repay the outstanding balance due and owing on the Promissory
Note and have refused, and continue to refuse, to comply with their obligations as set forth in the
Guaranty Agreements.
iil. ARGUMENT AND AUTHORITIES
9 This case is simple. Defendants each signed a personal Guaranty of a Promissory
Note. By their signatures, they unambiguously agreed to repay the loan if the debtor could not,
did not, or would not. When the debtor shirked its legal obligation and refused to repay the loan,
so did the Defendants.
10. Instead of repaying Encore the money they received the benefit of for six years,
Defendants instead seek to re-litigate BLyn’s bankruptcy action. Defendants’ expert
designations make it clear that they intend to offer testimony that is only relevant to their
bankruptcy case. While Defendants’ proffered experts undoubtedly have opinions, none of their
opinions bear on the simple facts of this case.
! By way of background only, BLyn filed bankruptcy in 2010. Contentious litigation ensued between BLyn and
Horizon Shipbuilding (“Horizon”) over refurbishments and alleged damage to the Betty Lyn I. The Betty Lyn ID
was auctioned by the bankruptcy court in April 2013 to satisfy Horizon’s lien against the Betty Lyn IJ. The
bankruptcy litigation remains on file.
A An Expert’s Opinion Must be Relevant
11. Texas Rule of Evidence 702 requires the proponent of an expert to show that the
expert's testimony is relevant to the issues in the case and is based upon a reliable foundation.
See EI. du Pont de Nemours & Co., Inc. v. Robinson, 923 S.W.2d 549, 556 (Tex. 1995). The
trial court is responsible for making the preliminary determination of whether the proffered
testimony meets the standards enunciated by the Texas Supreme Court. See Tex. R. Evid. 104(a)
(stating that the trial court is to decide preliminary questions concerning the admissibility of
evidence).
12. Rule 702 contains three requirements for the admission of expert testimony: (1)
the witness must be qualified; (2) the proposed testimony must be “scientific ... knowledge”; and
(3) the testimony must “assist the trier of fact to understand the evidence or to determine a fact in
issue.” Tex. R. Evid. 702. In order to constitute scientific knowledge which will assist the trier
of fact, the proposed testimony must be relevant and reliable. Robinson, 923 S.W.2d at 556.
13. The requirement that the proposed testimony be relevant incorporates traditional
relevancy analysis under Rules 401 and 402 of the Texas Rules of Civil Evidence. Id. To be
relevant, the proposed testimony must be “sufficiently tied to the facts of the case that it will aid
the jury in resolving a factual dispute.” Jd.; see also United States vy. Downing, 753 F.2d 1224,
1242 (3d Cir.1985); Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 589-93
(1993). Evidence that has no relationship to any of the issues in the case is irrelevant and does
not satisfy Rule 702's requirement that the testimony be of assistance to the jury. It is thus
inadmissible under Rule 702 as well as under Rules 401 and 402. Robinson, 923 8.W.2d at 556.
B Defendants’ Experts’ Opinions Are Not Relevant
14. The opinions Defendants’ experts intend to proffer are not relevant to this case
and, instead of assisting the jury, will only cause confusion.
15. Both of Defendants’ experts intend to offer opinions related to maritime law or
maritime financing:
. Richard A. Stanford is an attorney and Defendants’ retained expert on maritime
law. Stanford is designated to testify regarding Encore Bank’s first preferred ship
mortgage, Crimson Yacht/Horizon Shipbuilding’s lien, the standard for perfecting
maritime liens in this case, the priority of liens, and maritime financing.
David R. Blancett is a “yacht lending consultant” and Defendants’ retained
expert on maritime financing. Blancett is designated to testify regarding Encore
Bank’s first preferred ship mortgage, Crimson Yacht/Horizon Shipbuilding’s lien,
the standard for perfecting maritime liens in this case, the priority of liens,
maritime financing, and maritime law.
16. Stanford and Blancett’s designations are virtually identical. None of these
designations is relevant to the resolution of this dispute.
17. The general categories of maritime law, maritime financing, the standards for
perfecting maritime liens, and the priority of liens are not relevant to the disposition of this case.
These broad categories do not make the existence of any fact that is of consequence to the
determination of the action more probable or less probable than it would be without the evidence.
Tex. R. Evid. 401. This case involves a Promissory Note and Guaranties. Defendants’ attempt
to re-litigate the bankruptcy is impermissible and the Court should not allow it. If allowed to
testify, Stanford and Blancett wiil only confuse the jury with discussions regarding topics that
are only marginally connected to this case and which do not bear on the outcome. Their
designations make clear that neither Stanford nor Blancett will testify regarding the loan or
guaranties made the basis of this suit. As a result, their testimony is not sufficiently tied to the
facts of the case that it will aid the jury in resolving the factual dispute.
18. Texas contract law controls this case. Texas law applies to the Letter Agreement.
Texas law applies to the Promissory Note. Texas law applies to the Guaranty Agreements.
Maritime law neither controls nor applies to any of those documents. Thus, testimony from
Stanford or Blancett regarding maritime law, maritime financing, the standards of perfecting
maritime liens, or the priority of liens is irrelevant, inadmissible, and would not assist the jary in
resolving the dispute between the parties.
19. The designations concerning Encore Bank’s First Preferred Ship Mortgage and
Crimson Yacht/Horizon Shipbuilding’s lien fall into the same category as the designations
discussed above. Both of these topics relate to the priority of Encore and Horizon’s liens on the
Betty Lyn IJ. However, these are bankruptcy-related topics and do not concern the Defendants’
liability to Plaintiff pursuant to the Promissory Note or Guaranty Agreements. Any testimony on.
these topics from either Stanford or Blancett will only confuse the jury and will not be of
assistance in determining the outcome of the dispute.
20. Once again, Defendants are attempting to deflect the Court’s attention from the
simple facts of this case: Defendants signed Guaranty Agreements personally guaranteeing a
loan. Defendants refuse to pay. While Defendants may now wish they had signed different
Guaranty Agreements or wish their bankruptcy litigation had progressed differently, those
wishes do not permit Defendants to designate experts on bankruptcy topics that do not bear on
the agreements they signed with Encore.
IV. PRAYER
For these reasons, Plaintiff Cadence Bank f/k/a Encore Bank asks the Court to strike
Defendants’ Experts Richard A. Stanford and David R. Blancett, exclude their testimony from
the trial of this cause, and for any other relief to which it may be entitled.
Respectfully submitted,
DOBROWSKI, LARKIN & JOHNSON L.LP.
By! s/Cody W. Stafford
Paul J. Dobrowski
SBN 05927100
pid@doblaw.com
Cody W. Stafford
SBN 24068238
stafford@doblaw.com
4601 Washington Avenue, Suite 300
Houston, Texas 77007
Telephone: (713) 659-2900
Facsimile: (713) 659-2908
ATTORNEYS FOR PLAINTIFF CADENCE
BANK f/k/a ENCORE BANK
CERTIFICATE OF SERVICE
T hereby certify that a true and correct copy of the foregoing has been served on all
counsel of record on this 17th day of May, 2013, by ECF filing, facsimile, and/or certified mail-
return receipt requested,
Jett Williams, ILI
Henke & Associates
3200 Southwest Freeway, 34" Floor
Houston, Texas 77027
Facsimile: (713) 940-4545
Robert G. Taylor, TIT
Law Office of Robert G. Taylor, III
4119 Montrose, Suite 400
Houston, Texas 77006
Facsimile: (713) 654-7814
James E. “Jeb” Brown, IL
3100 Edloe Street, Suite 220
Houston, Texas 77027
Facsimile: (832) 460-3263
Jerry S. Payne
616 Voss Road
Hunters Creek Village, Texas 77056
Facsimile: (713) 781-8547
s/Cody W. Stafford
Cody W. Stafford
Preview
Filed 13 Ma’ 17 P4:10 Chris Daniel - District Clerk Harris Coun! ED101) 017493838 By: Carla E. Carrillo CAUSE NO. 2010-63264 CADENCE BANK fik/a ENCORE BANK IN THE DISTRICT COURT Plaintiff, Vv. OF HARRIS COUNTY, TEXAS ALLEN L. BERRY; JOSEPH D. MCCORD; and ROBERT G. TAYLOR, II, Defendants. 152™ JUDICIAL DISTRICT MOTION TO STRIKE DEFENDANTS’ EXPERTS RICHARD STANFORD AND DAVID BLANCETT Plaintiff Cadence Bank f/k/a Encore Bank (‘Plaintiff’) files this Motion to Strike Defendants’ Experts Richard Stanford and David Blancett (the “Motion”), and respectfully shows the Court as follows: 1 INTRODUCTION 1 Defendants have created endless roadblocks to avoid paying Plaintiff the more than $4 million they personally guaranteed. Instead of paying Plaintiff the debt they owe, Defendants have enlisted (and are undoubtedly paying) numerous “experts” that will presumably opine that Defendants are not liable to Plaintiff. 2. In an effort to hamper Plaintiffs ability to present its case to the Court, Defendants refuse to present their witnesses for deposition. Defendants quashed their own depositions and have repeatedly informed Plaintiff they will not present any of their witnesses, experts included, until all of Plaintiff's witnesses have been deposed. By using this strategy, Defendants apparently intend to prevent Plaintiff from deposing their “experts” in advance of trial or the discovery deadlines. 3 As a result of Defendants’ dilatory tactics, Plaintiff is forced to file this Motion without the benefit of deposing Defendants’ “experts” -- despite the fact that neither expert provided a report. Thus, Plaintiff reserves the right to supplement this Motion after fully deposing Defendants’ designated experts. 4 However, despite Defendants’ absolute refusal to make their witnesses available for deposition, it is patently obvious from their expert designations that Richard Stanford (“Stanford”) and David Blancett (“Blancett”) will not offer admissible testimony in this case and should be stricken. Each of these gentlemen intends to offer opinions related to maritime law and maritime financing. Simply put, this case involves Texas contract law — not maritime law. Defendants’ experts should be stricken. il. FACTUAL BACKGROUND 5 Defendants are members of BLyn II Holding, LLC ("BLyn"). In March 2007, BLyn and Encore entered into a Letter Agreement regarding a $6 million loan to BLyn from Encore for the refurbishment of the Betty Lyn II, a motor yacht. The loan was evidenced by a Promissory Note in favor of Encore. 6 As additional security for the loan, Defendants personally guaranteed the loan from Encore to BLyn. Defendants "absolutely and unconditionally guarantee[d] full and punctual payment and satisfaction of the Indebtedness of Borrower to Lender, and the performance and discharge of all Borrower's obligations under the Note and the Related Documents." Defendants expressly acknowledged that Encore would not have loaned BLyn funds without the personal guarantees of the Defendants. Pursuant to the Guaranty Agreements, each Defendant is jointly and severally liable for payment of the Promissory Note. 7. The Promissory Note was amended on several occasions at the request, and with the consent, of Defendants. Each time, Encore extended the maturity date on the loan for the benefit of Defendants. The Note finally matured on March 15, 2012, when the entire amount of unpaid principal and interest became due and payable. The Promissory Note was not repaid by BLyn! on March 15, 2012. 8 When Defendants were asked to honor their obligations under the Guaranty Agreements, Defendants stalled. Despite repeated admissions from Defendants to Encore that they owe the outstanding balance on the Promissory Note ~ and despite repeated promises to pay ~ Defendants have refused to repay the outstanding balance due and owing on the Promissory Note and have refused, and continue to refuse, to comply with their obligations as set forth in the Guaranty Agreements. iil. ARGUMENT AND AUTHORITIES 9 This case is simple. Defendants each signed a personal Guaranty of a Promissory Note. By their signatures, they unambiguously agreed to repay the loan if the debtor could not, did not, or would not. When the debtor shirked its legal obligation and refused to repay the loan, so did the Defendants. 10. Instead of repaying Encore the money they received the benefit of for six years, Defendants instead seek to re-litigate BLyn’s bankruptcy action. Defendants’ expert designations make it clear that they intend to offer testimony that is only relevant to their bankruptcy case. While Defendants’ proffered experts undoubtedly have opinions, none of their opinions bear on the simple facts of this case. ! By way of background only, BLyn filed bankruptcy in 2010. Contentious litigation ensued between BLyn and Horizon Shipbuilding (“Horizon”) over refurbishments and alleged damage to the Betty Lyn I. The Betty Lyn ID was auctioned by the bankruptcy court in April 2013 to satisfy Horizon’s lien against the Betty Lyn IJ. The bankruptcy litigation remains on file. A An Expert’s Opinion Must be Relevant 11. Texas Rule of Evidence 702 requires the proponent of an expert to show that the expert's testimony is relevant to the issues in the case and is based upon a reliable foundation. See EI. du Pont de Nemours & Co., Inc. v. Robinson, 923 S.W.2d 549, 556 (Tex. 1995). The trial court is responsible for making the preliminary determination of whether the proffered testimony meets the standards enunciated by the Texas Supreme Court. See Tex. R. Evid. 104(a) (stating that the trial court is to decide preliminary questions concerning the admissibility of evidence). 12. Rule 702 contains three requirements for the admission of expert testimony: (1) the witness must be qualified; (2) the proposed testimony must be “scientific ... knowledge”; and (3) the testimony must “assist the trier of fact to understand the evidence or to determine a fact in issue.” Tex. R. Evid. 702. In order to constitute scientific knowledge which will assist the trier of fact, the proposed testimony must be relevant and reliable. Robinson, 923 S.W.2d at 556. 13. The requirement that the proposed testimony be relevant incorporates traditional relevancy analysis under Rules 401 and 402 of the Texas Rules of Civil Evidence. Id. To be relevant, the proposed testimony must be “sufficiently tied to the facts of the case that it will aid the jury in resolving a factual dispute.” Jd.; see also United States vy. Downing, 753 F.2d 1224, 1242 (3d Cir.1985); Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 589-93 (1993). Evidence that has no relationship to any of the issues in the case is irrelevant and does not satisfy Rule 702's requirement that the testimony be of assistance to the jury. It is thus inadmissible under Rule 702 as well as under Rules 401 and 402. Robinson, 923 8.W.2d at 556. B Defendants’ Experts’ Opinions Are Not Relevant 14. The opinions Defendants’ experts intend to proffer are not relevant to this case and, instead of assisting the jury, will only cause confusion. 15. Both of Defendants’ experts intend to offer opinions related to maritime law or maritime financing: . Richard A. Stanford is an attorney and Defendants’ retained expert on maritime law. Stanford is designated to testify regarding Encore Bank’s first preferred ship mortgage, Crimson Yacht/Horizon Shipbuilding’s lien, the standard for perfecting maritime liens in this case, the priority of liens, and maritime financing. David R. Blancett is a “yacht lending consultant” and Defendants’ retained expert on maritime financing. Blancett is designated to testify regarding Encore Bank’s first preferred ship mortgage, Crimson Yacht/Horizon Shipbuilding’s lien, the standard for perfecting maritime liens in this case, the priority of liens, maritime financing, and maritime law. 16. Stanford and Blancett’s designations are virtually identical. None of these designations is relevant to the resolution of this dispute. 17. The general categories of maritime law, maritime financing, the standards for perfecting maritime liens, and the priority of liens are not relevant to the disposition of this case. These broad categories do not make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence. Tex. R. Evid. 401. This case involves a Promissory Note and Guaranties. Defendants’ attempt to re-litigate the bankruptcy is impermissible and the Court should not allow it. If allowed to testify, Stanford and Blancett wiil only confuse the jury with discussions regarding topics that are only marginally connected to this case and which do not bear on the outcome. Their designations make clear that neither Stanford nor Blancett will testify regarding the loan or guaranties made the basis of this suit. As a result, their testimony is not sufficiently tied to the facts of the case that it will aid the jury in resolving the factual dispute. 18. Texas contract law controls this case. Texas law applies to the Letter Agreement. Texas law applies to the Promissory Note. Texas law applies to the Guaranty Agreements. Maritime law neither controls nor applies to any of those documents. Thus, testimony from Stanford or Blancett regarding maritime law, maritime financing, the standards of perfecting maritime liens, or the priority of liens is irrelevant, inadmissible, and would not assist the jary in resolving the dispute between the parties. 19. The designations concerning Encore Bank’s First Preferred Ship Mortgage and Crimson Yacht/Horizon Shipbuilding’s lien fall into the same category as the designations discussed above. Both of these topics relate to the priority of Encore and Horizon’s liens on the Betty Lyn IJ. However, these are bankruptcy-related topics and do not concern the Defendants’ liability to Plaintiff pursuant to the Promissory Note or Guaranty Agreements. Any testimony on. these topics from either Stanford or Blancett will only confuse the jury and will not be of assistance in determining the outcome of the dispute. 20. Once again, Defendants are attempting to deflect the Court’s attention from the simple facts of this case: Defendants signed Guaranty Agreements personally guaranteeing a loan. Defendants refuse to pay. While Defendants may now wish they had signed different Guaranty Agreements or wish their bankruptcy litigation had progressed differently, those wishes do not permit Defendants to designate experts on bankruptcy topics that do not bear on the agreements they signed with Encore. IV. PRAYER For these reasons, Plaintiff Cadence Bank f/k/a Encore Bank asks the Court to strike Defendants’ Experts Richard A. Stanford and David R. Blancett, exclude their testimony from the trial of this cause, and for any other relief to which it may be entitled. Respectfully submitted, DOBROWSKI, LARKIN & JOHNSON L.LP. By! s/Cody W. Stafford Paul J. Dobrowski SBN 05927100 pid@doblaw.com Cody W. Stafford SBN 24068238 stafford@doblaw.com 4601 Washington Avenue, Suite 300 Houston, Texas 77007 Telephone: (713) 659-2900 Facsimile: (713) 659-2908 ATTORNEYS FOR PLAINTIFF CADENCE BANK f/k/a ENCORE BANK CERTIFICATE OF SERVICE T hereby certify that a true and correct copy of the foregoing has been served on all counsel of record on this 17th day of May, 2013, by ECF filing, facsimile, and/or certified mail- return receipt requested, Jett Williams, ILI Henke & Associates 3200 Southwest Freeway, 34" Floor Houston, Texas 77027 Facsimile: (713) 940-4545 Robert G. Taylor, TIT Law Office of Robert G. Taylor, III 4119 Montrose, Suite 400 Houston, Texas 77006 Facsimile: (713) 654-7814 James E. “Jeb” Brown, IL 3100 Edloe Street, Suite 220 Houston, Texas 77027 Facsimile: (832) 460-3263 Jerry S. Payne 616 Voss Road Hunters Creek Village, Texas 77056 Facsimile: (713) 781-8547 s/Cody W. Stafford Cody W. Stafford