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UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
SANKET VYAS, as liquidating
agent for and on behalf of
Q3 I, L.P.,
Plaintiff,
v. Case No. 8:22-cv-71-VMC-CPT
POLSINELLI PC, a Missouri
professional corporation,
Defendant.
______________________________/
ORDER
This matter is before the Court on consideration of
Defendant Polsinelli PC’s Motion for Summary Judgment (Doc.
# 92), filed on February 16, 2023, its Daubert Motions to
exclude the testimony of Plaintiff Sanket Vyas’s experts
(Doc. ## 98, 99), and Vyas’s Daubert Motion to exclude
Defendant’s expert (Doc. # 100), all filed on March 31, 2023.
Vyas responded to Polsinelli’s Motions on March 31, 2023, and
April 21, 2023, respectively. (Doc. ## 97, 112, 113).
Polsinelli replied in support of its Motion for Summary
Judgment (Doc. # 111), and responded to Vyas’s Daubert Motion
on April 21, 2023. (Doc. # 110). For the reasons that follow,
Polsinelli’s Daubert Motion as to Mr. Alfieri is granted in
part and denied in part, its Daubert Motion as to Mr. Spencer
is denied, its Motion for Summary Judgment is granted in part
and denied in part, and Vyas’s Daubert Motion is granted in
part and denied in part.
I. Background
A. Q3 Entities
In 2017, Michael Ackerman, James Seijas, and Quan Tran
started a cryptocurrency trading club. (Doc. # 78-2 at 15:7-
20). Mr. Ackerman claimed to have developed a trading
algorithm that could generate large, reliable returns. (Doc.
# 78-12 at 15). In 2018, Mr. Ackerman, Mr. Seijas, and Mr.
Tran formed Q3 I, L.P. (“Q3I”), and Q3 Holdings, LLC (“Q3H”),
to formalize their cryptocurrency trading club. (Id. at 6,
8). Additionally, Q3H was the general partner of Q3I. (Id. at
8). Mr. Ackerman, Mr. Seijas, and Mr. Tran were members of
Q3H and limited partners of Q3I. (Id. at 15-16).
According to Q3I’s Private Placement Memorandum (“PPM”),
Q3I was responsible for paying “for all ordinary and
reasonable operating and other expenses, including, but not
limited to, . . . licensing fees” related to the
cryptocurrency club. (Id. at 12). Q3H was entitled to “fifty
percent (50%) of the net capital appreciation allocated to
each Limited Partner [of Q3I] during each calendar month[.]”
(Id. at 9).
From the start of the cryptocurrency trading club until
around August 2018, investors sent their new investments to
Mr. Tran’s personal bank account. (Doc. # 78-4 at 23:20-
25:11). After Q3I opened an account with Signature Bank in
August 2018, the Q3I Signature account received deposits from
investors. (Doc. # 78-2 at 92:23-93:15). Funds from the Q3I
Signature account were used to pay Q3H directly. (Id. at
135:22-136:12).
The parties dispute the character of the funds
transferred from Q3I to Q3H. Vyas contends, based on Mr.
Seijas’s testimony, that the funds represented in part the 50
percent profit to which Q3H was entitled. (Doc. # 97 at 7-8)
(citing Doc. # 78-2 at 94:10-21, 135:22-136:12). Vyas cites
the following exchange:
Q. Did you discuss with Mr. McEvoy that in order to
pay yourselves your 50% profit you preferred not to
liquidate cryptocurrency in the Bitfinex account,
but rather wanted to take it from the Signature
Bank account with new investor funds?
A. We did discuss that, sir[.]” . . .
Q. [S]o my question to you is, why not just
liquidate part of the coins to take your profit
from the Bitfinex account?
A. Because the advice we got, as long as the ledgers
matched, dollars are fungible, so it doesn’t matter
whether I take a dollar out of a Signature account
or a dollar out of Bitfinex account and go through
all of those steps and market risk and fees and
commissions and, you know, labor to essentially
accomplish the same thing.
(Doc. # 78-2 at 133:6-15, 135:22-136:12). Polsinelli
alternatively asserts that there is no record evidence that
the transferred funds were profit. (Doc. # 78 at 7-8). During
his deposition, Mr. Seijas gave the following answer when
asked whether the Q3I Signature account paid profits to Q3H:
A. Yes, but I don’t think it’s – I don’t know if
I’d classify it as profits. That’s where I’m
struggling with the answer.
Q. Okay. What would you call it then?
A. Maybe it was either licensing fees or, you know,
I’m not sure how I would classify that, but was
Signature Bank used to pay some of the GPs? Yes.
(Id. at 94:10-21). Mr. Tran also stated that some of the funds
transferred to Q3H were licensing fees and some were profits.
See (Doc. # 78-4 at 103:2-13) (“Q. Was Q3 Holdings ever paid
any profits from the investments? A. [T]he 50 percent of
profits that were allegedly gotten every month was paid out
to Q3 Holdings, which the principals split. And then the
licensing fee . . . Q. Q3 Holdings, LLC was paid both
licensing fees and profits; is that correct? A. Right[.]”).
In or around October 2018, Q3I consulted with Greenberg
Traurig LLP. (Doc. # 78-56). Greenberg advised that Q3I should
treat cryptocurrencies as securities “given the uncertainty
surrounding cryptos” and advised that the firm’s “fund
[attorneys] . . . and . . . CFTC [attorneys] won’t get on
board” and would not represent Q3I unless it agreed to
“approach the product from the standpoint that the fund owns
securities[.]” (Id.). Q3I did not retain Greenberg and did
not register as an investment advisor. (Doc. # 78-38).
On April 19, 2019, Mr. Seijas signed an engagement letter
with Polsinelli. (Doc. # 78-13). The parties dispute whether
Mr. Seijas signed on behalf of Q3H or Q3I, but agree that the
dispute is not relevant to Vyas’s claims. Polsinelli relies
on the text of the engagement letter, which is addressed to
Q3H and refers to Q3H by name. (Id.). Vyas relies on the
title, “GP,” that Mr. Seijas wrote next to his signature,
arguing that “GP” suggests that he was signing as a general
partner on behalf of Q3I. (Id.). According to the terms of
the engagement letter, Polsinelli was retained to “represent
the company in connection with securities and regulatory
matters and such other matters as the company may direct [it]
from time to time and [Polsinelli] agree[d] in writing to
undertake[.]” (Id.).
Polsinelli sent several memoranda to Q3, addressing
issues including (1) whether Q3H was required to register as
an investment advisor and Q3I was required to register as an
investment company, (2) whether certain regulatory exceptions
could apply, (3) the steps required to register and the
potential consequences of failing to register, and (4)
potential business options to come into regulatory
compliance. (Doc. ## 78-22, 78-25, 78-26, 78-59). Despite
Polsinelli’s advice, the Q3 entities still did not register.
(Doc. # 78-35).
B. Flow of Funds
On July 9, 2019, David D’Amico, a group director Vice
President of Signature Bank, emailed Mr. Tran with a “few
easy questions for [the bank’s] compliance team:”
(a) What is the purpose of the incoming funds from
various individuals and entities?
(b) What is the purpose of the majority of the funds
being sent to benefit the three account signors?
(c) Will this activity continue in the same manner?
(Doc. # 78-14). Mr. Tran forwarded Mr. D’Amico’s email to Mr.
Seijas along with the following message:
Hey so the basic issue is that it looks like funds
deposited from investors are just being transferred
to our Q3 holding account to pay us out.
The reality is that we are sending investor money
to the exchange (algo) and buying crypto and then
liquidating crypto to USD from the algo to send to
Q3 holdings. Instead of losing fees on both sides
of those trades, we are registering it in our
accounting spreadsheets as such and just pushing
funds from Q3 I account to q3 Holdings account. I
have spoken with our accountant GARY Chadee and he
said that was acceptable to do in this manner as
well.
(Id.). Mr. Seijas responded to Mr. D’Amico on July 11, 2019.
(Doc. # 78-15). After reiterating Mr. Tran’s explanation of
the flow of funds, he stated the following:
Prior to implementing this strategy change, we
cleared it with our accountant Gary Chadee and he
stated that was acceptable to do in this matter. We
also cleared it with our fund administrator Mr.
McEvoy. It is both of their stances that as long as
the records are exactly accurate and the funds
accounted for then this does serve to save fees and
steps and is acceptable.
(Id.). Polsinelli was not a recipient on this email chain.
C. McEvoy Calls
Denis McEvoy served as the fund administrator for Q3I.
(Doc. # 78-2 at 113:7-114:6). Mr. McEvoy was a friend of Mr.
Seijas, and Q3I hired him in Spring 2018. (Id. at 83:21-
84:13). Mr. Seijas recalled that Q3I endeavored to hire a
fund administrator because “probably legal counsel” advised
them to do so. (Id. at 84:16-85:6). Mr. McEvoy was
functionally a consultant, helping Mr. Seijas “oversee[] the
way the fund was structured.” (Id. at 84:21-24).
Mr. Seijas discussed the issue of the flow of funds with
Mr. McEvoy in June 2019. (Doc. # 78-3 at 148:21-25). Mr.
McEvoy stated that the flow of funds directly from Q3I to Q3H
was allowable, but that Q3I needed supporting documentation.
(Id.). On October 9, 2019, Mr. Seijas called Mr. McEvoy, again
seeking advice on whether the flow of funds directly from Q3I
to Q3H without first purchasing cryptocurrency was a “valid
way to continue to run the fund.” (Doc. # 78-2 at 157:17-24).
He raised the issue a second time because Mr. Ackerman
disagreed with the way Mr. Tran had chosen to handle the flow
of funds. (Doc. # 78-3 at 145:12-25). Mr. McEvoy testified
that Mr. Tran sent him a flow of funds chart, that he
attempted to read on his phone. (Id. at 156:18-157:12). Mr.
McEvoy relied on Mr. Tran “walking [him] through” the chart.
(Id. at 160:16-21). After listening to Mr. Tran describe the
flow of funds, Mr. McEvoy reiterated that it “seemed
reasonable . . . not having to go through those extra steps”
and instead continuing to transfer funds directly from Q3I to
Q3H “as long as you had supporting documentation.” (Id. at
162:6-24).
The parties dispute whether the men were discussing the
payment of profits. Polsinelli, relying on the testimony of
Mr. McEvoy, contends that they were discussing costs
associated with running Q3I, not profits. See (Id. at 149:14-
16) (“It wasn’t discussed, fees – you know, it was costs. It
wasn’t discussed, performance fees.”). Vyas disagrees,
arguing that Mr. McEvoy, and other deponents, testified that
the call was related to “handling investor funds and profits
and other expenses[.]” (Id. at 158:6-14).
Immediately after speaking to Mr. Tran, Mr. McEvoy spoke
to Peter Waltz, a Polsinelli attorney, about the flow of funds
to “run it by him and make sure my thinking was correct[.]”
(Id. at 177:13-25). However, at first, during his deposition,
Mr. McEvoy did not recall this conversation. (Id. at 142:6-
12). Mr. Waltz’s time entry for October 9, 2019, reflects
that he spent .2 hours on a call with Mr. McEvoy discussing
“compliance issues, payment of fees, AML and related matters
regarding fund administration.” (Doc. # 78-5 at 3). Mr.
McEvoy, later recalling the discussion, stated that Mr. Waltz
told him “he had no problem” with the flow of funds. (Doc. #
78-3 at 178:24-179:6).
On the same day, Mr. Seijas wrote in a text message to
Mr. Tran and Mr. Ackerman that Mr. McEvoy had called him to
say that “Polsinelli is completely comfortable with the way
QT runs the Sig bank account. No issues.” (Doc. # 78-19).
D. Discovery of Fraud
On December 2 or December 3, 2019, Mr. Seijas and Mr.
Tran visited Mr. Ackerman at his home after discovering that
Mr. Ackerman was suffering from alcoholic pancreatitis. (Doc.
# 78-2 at 187:3-7). During the visit, Mr. Seijas realized
“that something might be wrong.” (Id.). He and Mr. Tran asked
to log into Q3I’s Bitfinex cryptocurrency account, at which
point they noticed a “wide discrepancy between what [Mr.
Ackerman] was reporting to [Q3H] and what was on the actual
screen[.]” (Id. at 209:13-16). Mr. Ackerman had been
reporting that the Bitfinex account contained over $100
million, when in fact, it contained “maybe seven figures[.]”
(Id. at 209:17-22). Mr. Seijas and Mr. Tran called the
authorities after this discovery. (Doc. # 78-27 at 3).
According to the Securities and Exchange Commission, Mr.
Ackerman operated a fraudulent securities offering scheme by
“repeatedly and falsely represent[ing] to investors that
investment generated monthly profits of approximately 12% to
17% and that Q3 had assets close to $300 million as a result
of Ackerman’s algorithmic trading success” when in reality he
was “doctoring screenshots” of his trading account to “create
the illusion that Q3 was highly invested in cryptocurrencies
and was extraordinarily profitable.” (Doc. # 78-54 at 2).
Mr. Seijas declared that he would have “taken immediate
action to inform law enforcement” if Polsinelli had
investigated the balances in Q3I’s cryptocurrency exchange
accounts. (Doc. # 97-19 at 1).
After the discovery of Mr. Ackerman’s fraud, Sanket Vyas
was appointed as the Liquidating Agent of Q3I to wind up Q3I’s
affairs and marshal and liquidate its assets for and on Q3I’s
behalf, including the liquidation of the claim in the instant
case. (Doc. # 37 at 3).
E. Expert Testimony
1. Vyas’s Experts
Vyas submits the testimony of two experts: Arnold
Spencer and Anthony Alfieri.
Mr. Alfieri is a professor of law and founding Director
of the Center for Ethics and Public Service at the University
of Miami School of Law. (Doc. # 99-1 at 1). He has “taught
legal ethics and professional responsibility, civil
procedure, litigation and transactional skills, law firm
management, and legal malpractice since 1991” and has
“written 93 published and forthcoming articles, essays,
chapters, and editorials on ethics and professional
responsibility, the law of lawyering, and the legal
profession in leading law journals, newspapers, and book
anthologies.” (Id.).
In his expert report, Mr. Alfieri offered the following
opinions:
1. Defendants neglected their reasonable duties of
competence, diligence, communication, advising,
and supervision;
2. Defendants committed negligent
misrepresentation by failing to exercise
reasonable care and competence in obtaining and
communicating information for the guidance of
Q3I and others; and
3. Defendants breached their fiduciary duties of
care, competence, and diligence, their duty to
provide information, and their duty of good
conduct.
(Id. at 6).
Mr. Spencer “specialize[s] in representing clients in
the cryptocurrency industry and traditional financial
institutions interfacing with cryptocurrency companies.”
(Doc. # 98-1 at 1). He spent twenty-eight years as an
Assistant United States Attorney, “focusing on economic crime
and compliance.” (Id.).
Mr. Spencer offered in his expert report the following
opinions:
1. If investor funds had been deposited into one or
more of the centralized cryptocurrency exchanges
that Mr. Ackerman was using to purchase and trade
cryptocurrencies for Q3I, the cryptocurrency
exchanges’ compliance departments would have
identified his patterns of transactions as
suspicious and high risk, and taken actions to
close the accounts and report the activity to
state and federal government officials.
2. An attorney violates the reasonable standard of
care expected of an attorney if the attorney
renders an opinion regarding the client’s use of
a bank account in terms of compliance with
securities fraud and anti-money laundering
issues without conducting a detailed, due
diligence review of the transaction documents,
offering documents, and regulatory agreements.
(Id. at 4, 7).
2. Polsinelli’s Expert
Polsinelli offers the testimony of Ira Kustin, a partner
at Paul Hastings LLP in New York. (Doc. # 100-1 at 1). Mr.
Kustin has practiced corporate law since 1999. In particular,
he focuses on representing private fund managers and
“advi[sing] with respect to those managers’ regulatory and
compliance needs.” (Id.). He “regularly speak[s] at
conferences, write[s] articles and [is] quoted in the press
on matters relevant to the operation of private investment
funds.” (Id.).
With respect to Vyas’s allegation that Polsinelli
advised the Q3 entities that its flow of funds was acceptable,
Mr. Kustin offers the following opinions:
1. The Attorneys acted within the standard of care
with respect to their engagement by Q3 Holdings,
and the Attorneys did not neglect any duty of
care to their client,
2. The scope of engagement of the Attorneys by Q3
Holdings did not encompass advice regarding Q3
Holdings’ banking transactions,
3. Q3 Holdings did not, in my opinion, expand the
scope of the Attorneys’ engagement to include
advice regarding and review of Q3 Holdings’
banking transactions,
4. Assuming the Attorneys and Q3 Holdings’ agent
had the alleged telephone call (as the Plaintiff
and/or McEvoy described it) on October 9, 2019,
the Attorneys’ response to Q3 Holdings as
described by Q3 Holdings’ agent (who was the only
Q3 Holdings representative on the alleged call)
fell within the applicable standard of care,
5. The advice provided by the Attorneys about
securities and regulatory matters was, in my
opinion, accurate and met the standard of care,
6. The Attorneys satisfied their duties of
competence, diligence, communication, advising,
and supervision,
7. The Attorneys did not commit negligent
misrepresentation because they exercised
reasonable care and competence, and
8. The Attorneys did not breach any fiduciary duty
of care, competence, or diligence.
(Id. at 3).
F. Procedural History
Vyas initiated this action on January 7, 2022, (Doc. #
1) and filed an amended complaint on March 21, 2022, claiming
professional negligence (Count I), negligent
misrepresentation (Count II), and breach of fiduciary duty
(Count III) based on Polsinelli’s alleged advice that the
flow of funds, including profits, directly from Q3I to Q3H
was acceptable. (Doc. # 37). After the Court denied its motion
to dismiss (Doc. # 46), Polsinelli filed its answer to the
amended complaint on June 1, 2022. (Doc. # 47).
Now, Polsinelli seeks final summary judgment in its
favor or, in the alternative, partial summary judgment on the
issue of the timing of damages. (Doc. # 78). Additionally,
Polsinelli filed two Daubert motions to exclude the expert
report and testimony of Mr. Spencer and Mr. Alfieri (Doc. ##
98, 99), and Vyas filed a Daubert motion to exclude Mr.
Kustin. (Doc. # 100). The Motions are ripe for review.
II. Legal Standard
A. Daubert Motion
Federal Rule of Evidence 702 states:
A witness who is qualified as an expert by
knowledge, skill, experience, training, or
education may testify in the form of an opinion or
otherwise if: (a) the expert’s scientific,
technical, or other specialized knowledge will help
the trier of fact to understand the evidence or to
determine a fact in issue; (b) the testimony is
based on sufficient facts or data; (c) the
testimony is the product of reliable principles and
methods; and (d) the expert has reliably applied
the principles and methods to the facts of the case.
Fed. R. Evid. 702.
Implementing Rule 702, Daubert v. Merrell Dow
Pharmaceuticals, Inc., 509 U.S. 579 (1993), requires district
courts to ensure that any and all scientific testimony or
evidence admitted is both relevant and reliable. See Id. at
589–90. The Daubert analysis also applies to non-scientific
expert testimony. Kumho Tire Co. v. Carmichael, 526 U.S. 137,
147 (1999). District courts must conduct this gatekeeping
function “to ensure that speculative, unreliable expert
testimony does not reach the jury under the mantle of
reliability that accompanies the appellation ‘expert
testimony.’” Rink v. Cheminova, Inc., 400 F.3d 1286, 1291
(11th Cir. 2005). The Eleventh Circuit “requires trial courts
acting as gatekeepers to engage in a ‘rigorous three-part
inquiry.’” Hendrix v. Evenflo Co., 609 F.3d 1183, 1194 (11th
Cir. 2010).
The district court must assess whether:
(1) the expert is qualified to testify competently
regarding the matters he intends to address; (2)
the methodology by which the expert reaches his
conclusions is sufficiently reliable as determined
by the sort of inquiry mandated in Daubert; and (3)
the testimony assists the trier of fact, through
the application of scientific, technical, or
specialized expertise, to understand the evidence
or to determine a fact in issue.
Id. The proponent of the expert testimony bears the burden of
showing, by a preponderance of the evidence, that the
testimony satisfies each of these requirements. Id.
B. Summary Judgment
Summary judgment is appropriate “if the movant shows
that there is no genuine dispute as to any material fact and
the movant is entitled to judgment as a matter of law.” Fed.
R. Civ. P. 56(a). A factual dispute alone is not enough to
defeat a properly pled motion for summary judgment; only the
existence of a genuine issue of material fact will preclude
a grant of summary judgment. Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 247–48 (1986).
An issue is genuine if the evidence is such that a
reasonable jury could return a verdict for the non-moving
party. Mize v. Jefferson City Bd. of Educ., 93 F.3d 739, 742
(11th Cir. 1996) (citing Hairston v. Gainesville Sun Publ’g
Co., 9 F.3d 913, 918 (11th Cir. 1993)). A fact is material if
it may affect the outcome of the suit under the governing
law. Allen v. Tyson Foods, Inc., 121 F.3d 642, 646 (11th Cir.
1997). The moving party bears the initial burden of showing
the court, by reference to materials on file, that there are
no genuine issues of material fact that should be decided at
trial. Hickson Corp. v. N. Crossarm Co., 357 F.3d 1256, 1260
(11th Cir. 2004) (citing Celotex Corp. v. Catrett, 477 U.S.
317, 323 (1986)). “When a moving party has discharged its
burden, the non-moving party must then ‘go beyond the
pleadings,’ and by its own affidavits, or by ‘depositions,
answers to interrogatories, and admissions on file,’
designate specific facts showing that there is a genuine issue
for trial.” Jeffery v. Sarasota White Sox, Inc., 64 F.3d 590,
593–94 (11th Cir. 1995) (quoting Celotex, 477 U.S. at 324).
If there is a conflict between the parties’ allegations
or evidence, the non-moving party’s evidence is presumed to
be true and all reasonable inferences must be drawn in the
non-moving party’s favor. Shotz v. City of Plantation, 344
F.3d 1161, 1164 (11th Cir. 2003). If a reasonable fact finder
evaluating the evidence could draw more than one inference
from the facts, and if that inference introduces a genuine
issue of material fact, the court should not grant summary
judgment. Samples ex rel. Samples v. City of Atlanta, 846
F.2d 1328, 1330 (11th Cir. 1988). But, if the non-movant’s
response consists of nothing “more than a repetition of his
conclusional allegations,” summary judgment is not only
proper, but required. Morris v. Ross, 663 F.2d 1032, 1034
(11th Cir. 1981).
III. Analysis
A. Polsinelli’s Daubert Motion (Spencer)
Polsinelli seeks to exclude Arnold Spencer’s expert
testimony on the grounds that it does not meet the reliability
or the helpfulness requirements of Rule 702. (Doc. # 98 at 8-
13). First, Polsinelli challenges as unreliable Mr. Spencer’s
first opinion that a change to the flow of funds would have
led to cryptocurrency exchanges’ compliance departments
discovering Mr. Ackerman’s scheme prior to December 2019
(“Compliance Opinion”). (Id. at 8-11). It argues that such an
opinion is speculative and “improperly three stacks
inferences.” (Id. at 8). Second, Polsinelli challenges as
unreliable and unhelpful Mr. Spencer’s opinion that an
attorney violates the reasonable standard of care by
rendering an opinion regarding the compliance of a certain
use of a bank account without first conducting due diligence
(“Standard of Care Opinion”). (Id. at 11-13). It argues that
the opinion should be excluded because Mr. Spencer relied on
a heightened “best practices” standard to form his opinion.
(Id.).
In response, Vyas contends that Mr. Spencer’s opinions
are both reliable and helpful, as he relied on his personal
experience in cryptocurrency compliance and enforcement and
used the appropriate standard of care in his analysis. (Doc.
# 112 at 4-10).
1. Reliability
The Court must assess whether the expert’s methodology
is reliable. “Exactly how reliability is evaluated may vary
from case to case, but what remains constant is the
requirement that the trial judge evaluate the reliability of
the testimony before allowing its admission at trial.”
Frazier, 387 F.3d 1244, 1262 (11th Cir. 2004) (citing Fed. R.
Evid. 702, Advisory Committee Notes (2000)). There are four
recognized, yet non-exhaustive, factors a district court may
consider in evaluating reliability:
(1) whether the expert’s methodology has been
tested or is capable of being tested; (2) whether
the technique has been subjected to peer review and
publication; (3) the known and potential error rate
of the methodology; and (4) whether the technique
has been generally accepted in the proper
scientific community.
Seamon v. Remington Arms Co., 813 F.3d 983, 988 (11th Cir.
2016) (citations omitted). A district court can take other
relevant factors into account as well. Id. (citations
omitted).
“If the [expert] witness is relying solely or primarily
on experience, then,” in establishing reliability, “the
witness must explain how that experience leads to the
conclusion reached, why that experience is a sufficient basis
for the opinion, and how that experience is reliably applied
to the facts.” Frazier, 387 F.3d at 1261 (citation and
internal quotation marks omitted). “[A] trial court may
exclude expert testimony . . . whose factual basis is not
adequately explained.” Cook ex rel. Est. of Tessier v. Sheriff
of Monroe Cnty., Fla., 402 F.3d 1092, 1111 (11th Cir. 2005).
Expert opinions must have “a traceable, analytical basis
in objective fact.” Bragdon v. Abbott, 524 U.S. 624, 653
(1998). “[N]othing in either Daubert or the Federal Rules of
Evidence requires a district court to admit opinion evidence
that is connected to existing data only by the ipse dixit of
the expert. A court may conclude that there is simply too
great an analytical gap between the data and the opinion
proffered.” Gen. Elec. Co. v. Joiner, 522 U.S. 136, 146
(1997).
Here, Mr. Spencer’s testimony is reliable as to both the
Compliance Opinion and the Standard of Care Opinion. Mr.
Spencer developed both his opinions by relying on his personal
knowledge and experience. As an attorney who specializes in
providing legal services relating to regulatory compliance
and enforcement to cryptocurrency investment funds, Mr.
Spencer has the experience necessary to properly render the
opinions set forth in his expert report. Further, he detailed
in his report all the facts he relied upon and the assumptions
he made, with references to record evidence. (Doc. # 98-1 at
2-3).
To the extent Polsinelli challenges Mr. Spencer’s
Compliance Opinion as speculative, such an attack is
unavailing. “Hypotheticals . . . need not doom an expert
opinion.” Mighty v. Miami-Dade Cnty., No. 14-23285-CIV, 2019
WL 4306942, at *9 (S.D. Fla. Aug. 9, 2019), report and
recommendation adopted, No. 14-23285-CIV, 2019 WL 4305847
(S.D. Fla. Sept. 10, 2019). To the contrary,
While [the expert’s] opinions may be based on
hypothetical situations, this does not mean that
those opinions are speculative. [His] opinions are
allegedly based on his detailed review of certain
evidence. . . . To the extent [movant] challenges
[the expert’s] opinions, it will have the
opportunity to challenge those opinions during the
trial of this case.
Quorum Health Res., LLC v. Hosp. Auth. of Wayne Cnty.,
Georgia, No. CV208-042, 2010 WL 11537684, at *2 (S.D. Ga.
Feb. 17, 2010). Here, Mr. Spencer’s Compliance Opinion is
based on his extensive experience with cryptocurrency
exchange anti-money laundering compliance measures and his
review of the evidence in this case. Therefore, his opinion
is not speculative.
2. Helpfulness
To be admissible, expert testimony must also assist the
trier of fact. Fed. R. Evid. 702. “By this requirement, expert
testimony is admissible if it concerns matters that are beyond
the understanding of the average lay person.” United States
v. Frazier, 387 F.3d 1244, 1262 (11th Cir. 2004) (citation
omitted). “[T]he court must ‘ensure that the proposed expert
testimony is “relevant to the task at hand,” . . . i.e., that
it logically advances a material aspect of the proposing
party’s case.’” Allison v. McGhan, 184 F.3d 1300, 1312 (11th
Cir. 1999) (citation omitted).
So, while “[t]he ‘basic standard of relevance . . . is
a liberal one,’ Daubert, 509 U.S. at 587, . . .[,] if an
expert opinion does not have a ‘valid scientific connection
to the pertinent inquiry[,]’ it should be excluded because
there is no ‘fit.’” Boca Raton Cmty. Hosp., Inc. v. Tenet
Health Care Corp., 582 F.3d 1227, 1232 (11th Cir. 2009)
(citations omitted). “Proffered expert testimony generally
will not help the trier of fact when it offers nothing more
than what lawyers for the parties can argue in closing
arguments.” Frazier, 387 F.3d at 1262–63 (citation omitted).
Here, Mr. Spencer’s Standard of Care Opinion is helpful
to the trier of fact. Polsinelli has pointed to one instance
in his deposition where Mr. Spencer testified that conducting
additional due diligence prior to answering a question about
the appropriateness of a flow of funds structure would be
“best practice.” (Doc. # 98 at 12 (citing Doc. # 98-3 at
102:1-103:8)). Relying on this quote, it argues that Mr.
Spencer improperly held Polsinelli to a heightened standard
of care. (Id.). However, in his report and throughout his
deposition, Mr. Spencer indicated that Polsinelli “failed to
exercise a reasonable level of care by issuing an
extraordinarily broad opinion based on extraordinarily
limited due diligence.” (Doc. # 98-1 at 8).
Any alleged inconsistency in the standard of care Mr.
Spencer applied in his report is best addressed during trial.
See Maiz v. Virani, 253 F.3d 641, 666 (11th Cir. 2001)
(“Vigorous cross-examination, presentation of contrary
evidence, and careful instruction on the burden of proof are
the traditional and appropriate means of attacking
[debatable] but admissible evidence.” (citations and internal
quotation marks omitted)).
Therefore, Polsinelli’s Daubert Motion as to Arnold
Spencer is denied.
B. Polsinelli’s Daubert Motion (Alfieri)
Polsinelli seeks to exclude Anthony Alfieri’s expert
testimony for failing to meet Rule 702’s qualifications,
reliability, and helpfulness requirements. (Doc. # 99).
1. Qualifications
The first question under Daubert is whether Mr. Alfieri
is qualified to testify competently regarding the matters he
intends to address. City of Tuscaloosa v. Harcros Chems.,
Inc., 158 F.3d 548, 563 (11th Cir. 1998). An expert may be
qualified “by knowledge, skill, experience, training, or
education.” Fed. R. Evid. 702. “Determining whether a witness
is qualified to testify as an expert ‘requires the trial court
to examine the credentials of the proposed expert in light of
the subject matter of the proposed testimony.’” Clena Invs.,
Inc. v. XL Specialty Ins. Co., 280 F.R.D. 653, 661 (S.D. Fla.
2012) (quoting Jack v. Glaxo Wellcome, Inc., 239 F. Supp. 2d
1308, 1314–16 (N.D. Ga. 2002)).
“This inquiry is not stringent, and so long as the expert
is minimally qualified, objections to the level of the
expert’s expertise [go] to credibility and weight, not
admissibility.” Id. (citations and internal quotation marks
omitted). The Court is aware that its “gatekeeper role under
Daubert ‘is not intended to supplant the adversary system or
the role of the jury.’” Maiz v. Virani, 253 F.3d 641, 666
(11th Cir. 2001) (quoting Allison v. McGhan, 184 F.3d 1300,
1311 (11th Cir. 1999)). “Courts must also be mindful that
‘[e]xpertise in one field does not qualify a witness to
testify about others.’” Easterwood v. Husqvarna Pro. Prod.,
Inc., 576 F. Supp. 3d 950, 958 (M.D. Ala. 2021) (quoting
Lebron v. Sec’y of Fla. Dep’t of Children & Families, 772
F.3d 1352, 1368 (11th Cir. 2014)).
Polsinelli contends that Mr. Alfieri is not qualified to
testify because (1) he is not an expert on securities and
regulatory issues related to financial funds and (2) he is
only familiar with the Florida Rules of Professional Conduct,
which it alleges do not apply in this case. (Doc. # 99 at 2).
Instead, it states that he should have applied the Colorado
Rules of Ethics because Mr. Waltz, the subject attorney, was
barred and practiced in Colorado. (Id. at 5-6). Vyas responds
that Mr. Alfieri has sufficient expertise in legal ethics and
malpractice to meet the qualifications threshold and contends
that he properly relied on the Florida Rules. (Doc. # 113 at
6-15).
The Court finds that Mr. Alfieri is qualified to testify
in this matter. First, he has sufficient expertise in legal
ethics to opine on the applicable standard of care. As the
founding Director of the Center for Ethics and Public Service
at the University of Miami School of Law, a professor of legal
ethics, and a published author on the topics of ethics and
professional responsibility, Mr. Alfieri easily meets the
minimal qualification standard under Rule 702 to offer his
opinions on the duty and breach elements of Vyas’s
professional negligence claim. His lack of experience with
securities regulation does not bar his testimony. Mr. Alfieri
opines on the “general standards governing ethical and
professional conduct applying to all lawyers.” (Doc. # 99-3
at 54:17-55:9). To the extent Polsinelli believes his opinion
is flawed due to his inexperience with securities regulation,
it may do so through cross-examination.
Polsinelli’s second argument, that Mr. Alfieri must be
familiar with the Colorado Rules of Professional Conduct to
offer an opinion in this case, is misplaced. Under Rule 702,
Mr. Alfieri need not be an expert on the Colorado Rules of
Professional Conduct in order to offer his opinion that
Polsinelli violated the applicable standard of care under the
Florida Rules of Professional Conduct. This argument also
strikes the Court as odd for another reason – Polsinelli’s
own standard of care expert did not rely on the Colorado Rules
of Professional Conduct either, and in none of its filings
with the Court has Polsinelli contended that Colorado law
applies in this case.
2. Reliability
According to Polsinelli, Mr. Alfieri’s testimony is
unreliable because it “is based on erroneous premises of
facts.” (Doc. # 99 at 3). It alleges that Mr. Alfieri relied
only on the allegations in the complaint, which are not record
evidence. (Id.). However, Mr. Alfieri stated in his report
and during his deposition that he reviewed the affidavits and
depositions of Mr. McEvoy and Mr. Seijas and the accompanying
exhibits. See (Doc. # 99-1 at 5) (“I reviewed all or parts of
the pleadings, motions, discovery materials, court orders,
and other papers relevant to this proceeding.”); (Doc. # 99-
3 at 44:24-45:2) (“I also reviewed the affidavits of Mr.
McEvoy, Mr. Seijas, and as well as the McEvoy deposition and
the Seijas deposition and the accompanying exhibits to those
two depositions.”).
“In applying the gatekeeping function, courts must
ensure that speculative, unreliable expert testimony does not
reach the jury.” McCorvey v. Baxter Healthcare Corp., 298
F.3d 1253, 1256 (11th Cir.2002). “Experts, however, are
entitled to state reasonable assumptions.” Se. Metals Mfg.
Co. v. Fla. Metal Prod., Inc., 778 F. Supp. 2d 1341, 1344
(M.D. Fla. 2011) (citing Maiz v. Virani, 253 F.3d 641, 667
(11th Cir. 2001)). Mr. Alfieri relied on his decades of
experience in the field of legal ethics and record evidence
to conclude that Polsinelli violated the applicable standard
of care. Polsinelli’s argument that Mr. Alfieri’s opinions
are not fully supported by the record evidence goes to weight,
not admissibility. See, e.g., S. Gardens Citrus Processing
Corp. v. Barnes Richardson & Colburn, No. 2:11-CV-377-38UAM,
2013 WL 5928676, at *3 (M.D. Fla. Nov. 1, 2013) (“Defendants’
challenge to the experts’ unfamiliarity with the work of
attorneys in the area of international trade law would be
properly made through vigorous cross-examination,
presentation of contrary evidence, and careful instruction on
the burden of proof, but not wholesale exclusion of their
testimony.”).
3. Helpfulness
Polsinelli argues that Mr. Alfieri’s testimony
improperly goes the ultimate question of whether Polsinelli
was negligent. (Doc. # 99 at 3).
“No witness may offer legal conclusions or testify to
the legal implications of conduct.” Dudash v. S.-Owners Ins.
Co., No. 8:16-CV-290-JDW-AEP, 2017 WL 1969671, at *2 (M.D.
Fla. May 12, 2017); see also Washington v. City of Waldo,
Fla., No. 1:15CV73-MW/GRJ, 2016 WL 3545909, at *3 (N.D. Fla.
Mar. 1, 2016) (“[A] witness typically may not ‘give purely
legal conclusions,’ such as that an officer lacked probable
cause to arrest, or that a search conducted without a warrant
violated the Fourth Amendment, as such conclusory testimony
would ‘tell the jury what result to reach’ on ultimate issues
only the jury should resolve.” (citations omitted)). But, the
Eleventh Circuit has acknowledged that “the distinction
between whether challenged testimony is either an admissible
factual opinion or an inadmissible legal conclusion is not
always easy to perceive.” Hanson v. Waller, 888 F.2d 806, 811
(11th Cir. 1989). Additionally, “the mere reference to a term
with legal significance in an expert opinion does not
necessarily transform the opinion into an inadmissible legal
conclusion.” Feldman v. Target Corp., No. 3:19-cv-419-MMH-
PDB, 2021 WL 1172794, at *3 (M.D. Fla. Mar. 29, 2021).
In legal malpractice actions under Florida law, expert
testimony is generally required to satisfy the plaintiff’s
burden of demonstrating the duty and breach elements. See
Evans v. McDonald, 313 F. App’x 256, 258 (11th Cir. 2009)
(“Our review of Florida case law indicates that a legal
malpractice plaintiff must present expert testimony to
establish the appropriate standard of care (and breach
thereof) unless the lawyer’s lack of care and skill is so
obvious that the trier of fact can resolve the issue as a
matter of common knowledge.”). “[W]hen the facts of the case
are such that the duty owed and the applicable standard of
care are not common knowledge, expert opinion is necessary to
establish a breach.” Id. (citing Willage v. Law Offices of
Wallace and Breslow, P.A., 415 So.2d 767 (Fla. 3d DCA 1982)).
The central issue in this case is whether Polsinelli
violated its duty to the Q3 entities by giving allegedly
uninformed advice on the appropriateness of the flow of funds
from Q3I to Q3H. This issue is beyond the common knowledge of
a jury, and, therefore, Vyas is required to present expert
testimony on the standard of care. As such, Mr. Alfieri may
testify regarding the standard of reasonable care Polsinelli
was required to follow.
However, in Conclusions 2 and 3 of his report, he opines
respectively that “Defendants committed negligent
misrepresentation” and “breached their fiduciary duties.”
(Doc. # 99-1 at 6). The Court excludes Mr. Alfieri’s opinion
to the extent he concludes that Polsinelli committed
negligent misrepresentation and breach of fiduciary duty in
Conclusions 2 and 3 of his report, as such testimony instructs
the jury on what result to reach. See Tillman v. C.R. Bard,
Inc., 96 F. Supp. 3d 1307, 1325-26 (M.D. Fla. 2015) (“The
best resolution of this type of problem is to determine
whether the terms used by the witness have a separate,
distinct and specialized meaning in the law different from
that present in the vernacular. If they do, exclusion is
appropriate. Based on the foregoing, the Court will exclude
the [experts’] opinions that [defendant] acted negligently or
recklessly.”).
Thus, the Court grants Polsinelli’s Motion as to Mr.
Alfieri’s conclusion that it committed negligent
misrepresentation and breached its fiduciary duty and denies
the Motion in all other respects.
C. Vyas’s Daubert Motion
Vyas seeks to exclude Ira Kustin’s testimony based on
its failure to meet the reliability and helpfulness
requirement under Rule 702. (Doc. # 100).
1. Reliability
According to Vyas, Mr. Kustin’s testimony should be
excluded because he “applies no reliable – or even articulable
– standard in reaching his opinions[.]” (Id. at 12). Vyas
contends that Mr. Kustin never articulates the applicable
standard of care he relied upon to develop his opinions.
The Court disagrees with Vyas’s account of Mr. Kustin’s
testimony. Mr. Kustin relied on his experience as a private
funds attorney, particularly in giving advice to clients
trading in cryptocurrency, and his knowledge of the ethical
rules to articulate the applicable standard of care in this
case. See (Doc. # 100-2 at 64:21-65:3) (“Q. So what is the
standard of care that was applicable to the advice – to the
answer rather given by Mr. Waltz to Mr. McEvoy? A. Yeah. So,
you know, an attorney in that circumstance needs to have the
legal knowledge, skill, preparedness and expertise that a
prudent lawyer in the same area of practice reasonably needs
for whatever the assignment is.”). Mr. Kustin confirmed in
his deposition that the standard of care he applied in his
report came from his knowledge of the American Bar Association
Model Rules of Professional Conduct and the New York Rules of
Professional Conduct, as well as his review of the Florida
Rules of Professional Conduct. (Id. at 65:4-12). He then
applied that standard of care to the record evidence, thereby
applying his experience to the facts and satisfying the
reliability prong of Rule 702. Vyas can address any faults in
his testimony through cross-examination at trial.
2. Helpfulness
Vyas argues Mr. Kustin impermissibly assumed that the
October 9, 2019, call between Mr. McEvoy and Mr. Waltz did
not include a discussion of performance fees or profits, and,
therefore, his testimony would not be helpful to the trier of
fact. (Doc. # 100 at 7-8).
This argument, once again, goes to the weight, not the
admissibility, of Mr. Kustin’s testimony. “An expert’s
opinion, where based on assumed facts, must find some support
for those assumptions in the record.” Tillman, 96 F. Supp. 3d
at 1320 n.14. In arriving at that opinion, however, an expert
may “rely upon disputed facts so long as those facts find
support in the record.” Guzman v. Holiday CVS, LLC, 2022 WL
10043004, at *2 (S.D. Fla. Oct. 17, 2022). Here, Mr. Kustin
relied on the deposition testimony of Mr. McEvoy when he
assumed that the October 9, 2019, conversation did not include
a discussion of the flow of performance fees or profit. See
(Doc. # 78-3 at 149:14-16) (“It wasn’t discussed, fees – you
know, it was costs. It wasn’t discussed, performance fees.”).
That Vyas points to other record evidence that it contends
contradicts this testimony does not prevent Mr. Kustin from
relying on Mr. McEvoy’s deposition.
However, in Conclusions 7 and 8 of his report, Mr. Kustin
opines that Polsinelli “did not commit negligent
misrepresentation” and “did not breach any fiduciary duty.”
For the reasons explained previously, the Court excludes Mr.
Kustin’s opinion to the extent he concludes that Polsinelli
did not commit negligent misrepresentation and did not breach
its fiduciary duty in Conclusions 7 and 8 of his report, as
such testimony instructs the jury on what result to reach.
Therefore, the Court grants Vyas’s Daubert Motion as to
Mr. Kustin’s conclusion that Polsinelli did not commit
negligent misrepresentation and that it did not breach any
fiduciary duty and denies the Motion in all other respects.
D. Polsinelli’s Motion for Summary Judgment
Polsinelli seeks final summary judgment in its favor.
(Doc. # 78). It claims that it is entitled to summary judgment
because there is no admissible evidence that (1) Polsinelli
advised any Q3 entity regarding payment of profits or (2)
that Polsinelli’s alleged advice caused harm to Q3I.
Alternatively, it seeks partial summary judgment limiting
Vyas’s potential damages to monies wrongfully distributed to
Q3H after October 9, 2019. The Court addresses each argument
in turn.
1. Whether Polsinelli Provided Alleged Advice
Polsinelli first contends that there is no record
evidence that any Polsinelli attorney actually advised any Q3
entity that the payment of profits directly from Q3I to Q3H
was acceptable. (Id. at 16-18). It points to portions of Mr.
McEvoy’s deposition in which he stated that he did not recall
the substance of a telephone call with Mr. Waltz on October
9, 2019 (“October 9 Call”). (Id. at 17) (citing 78-2 at 142:6-
12). Further, Polsinelli cites to another portion of Mr.
McEvoy’s deposition where he appears to indicate that he
discussed only the flow of fees, not profits, from Q3I to Q3H
with Mr. Waltz on the October 9 Call. (Doc. # 78 at 18)
(citing 78-3 at 149:14-16, 157:5-12). Vyas disputes this
characterization of Mr. McEvoy’s testimony and points to
other sections of his deposition that describe the details of
the October 9 Call and indicate they discussed the flow of
profits. (Doc. # 97 at 16-21).
There is a genuine dispute of fact regarding whether
Polsinelli advised any Q3 entity that the flow of profits
directly from Q3I to Q3H was acceptable. While Polsinelli is
correct that Mr. McEvoy did testify, when first asked about
it, that he did not recall the substance of the October 9
Call, there is also record evidence, including other portions
of his deposition, that indicate Mr. Waltz told Mr. McEvoy
that the flow of profits was acceptable.
First, Mr. Waltz’s time entry for October 9, 2019,
indicates that he had a call with Mr. McEvoy “regarding
compliance issues, payment of fees, AML [anti-money
laundering] and related matters regarding fund
administration” demonstrates that the October 9 call actually
occurred. (Doc. # 78-5 at 3). Second, after initially
indicating he did not remember the details, later in the
deposition Mr. McEvoy was able to recall the substance of the
October 9 Call. He stated that he attempted to walk Mr. Waltz
through the flow of funds chart that Mr. Seijas had just shown
him. (Doc. # 78-3 at 178:24–179:6). He also indicated that he
understood the flow of funds chart “to be an accurate
depiction of how the Q3 entity were [sic] handling investor
funds and profits and other expenses.” (Id. at 158:6-14).
Further, Mr. Seijas testified that he recalled Mr.
McEvoy telling him that he confirmed the flow of funds was
acceptable. See (Doc. # 78-2 at 159:22-160:11) (“The only
thing I remember is explaining to him the way the accounting
was done, and his comment that he checked with Polsinelli and
they’re comfortable with it.”). Mr. Seijas also sent a text
message on October 9, 2019, stating that “Denis called me.
Polsinelli is completely comfortable with the way [Mr. Tran]
runs the Sig bank account[.] No issues[.]” (Doc. # 78-19).
Taken together, the above evidence could allow a
reasonable jury to find that the flow of profits was, at least
in part, the topic of the October 9 Call.
2. Evidence of Causation
In its second argument for summary judgment, Polsinelli
claims there is no record evidence that, even if Polsinelli
did approve the flow of profits, such advice caused Q3I any
harm. (Doc. # 78 at 18-20). According to Polsinelli, any of
Vyas’s potential evidence to the contrary is too speculative
to create a genuine dispute. (Id. at 19). In his response,
Vyas contends that there is evidence in the record that could
lead a jury to find he satisfied the causation element of his
claims.
The Court finds that there is a genuine dispute of fact
as to whether Polsinelli’s alleged advice caused harm to Q3I.
Each of Vyas’s claims (professional negligence, negligent
misrepresentation, and breach of fiduciary duty) stem from
the same conduct: Polsinelli’s alleged advice on the October
9 Call that the flow of profits directly from Q3I to Q3H was
acceptable. Vyas argues that Polsinelli’s uninformed opinion
prevented the discovery of Mr. Ackerman’s fraud. (Doc. # 37
at 2-3).
Under Florida law, in order to demonstrate the requisite
causation necessary for each of his claims, Vyas must
“introduce evidence which affords a reasonable basis for the
conclusion that it is more likely than not that the conduct
of the defendant was a substantial factor in bringing about
the result.” Watts v. Goetz, 311 So. 3d 253, 260 (Fla. 2d DCA
2020) (quoting Gooding v. Univ. Hosp. Bldg., Inc., 445 So. 2d
1015, 1018 (Fla. 1984)).
In support of his theory that the fraud would have been
discovered earlier if not for Polsinelli’s uninformed advice,
Vyas offers the testimony of Mr. Seijas and Mr. Alfieri. Mr.
Seijas stated that he would have obtained access to the
Bitfinex account through which Mr. Ackerman perpetrated the
fraud if Polsinelli requested access as part of a due
diligence review. Further, he stated that he would have
immediately contacted authorities – as he did in December
2019 – if Polsinelli had discovered that millions of dollars
were missing from the Bitfinex account. Additionally, Vyas
points to Mr. Alfieri’s expert testimony:
If investor funds had been deposited into one or more of
the centralized cryptocurrency exchanges that Mr.
Ackerman was using to purchase and trade
cryptocurrencies for Q3I, the cryptocurrency exchanges’
compliance departments would have identified his
patterns of transactions as suspicious and high risk,
and taken actions to close the accounts and report the
activity to state and federal government officials.
(Doc. # 98-1 at 4).
Vyas’s evidence is not so speculative as to warrant
summary judgment in Polsinelli’s favor. See Harris Hunt &
Derr v. Taylor, No. 8:21-cv-1457-KKM-TGW, 2022 WL 3155135, at
*5 (M.D. Fla. Aug. 8, 2022) (denying summary judgment and
finding plaintiff’s statement “that, had she been properly
informed, she would not ‘have spent [her] entire life savings
on attorneys’ and she ‘would have found lawyers that [were
not] so expensive’” was sufficient record evidence to create
a genuine dispute as to whether defendant’s legal malpractice
caused her harm); Hotels of Deerfield, LLC v. Studio 78, LLC,
No. 21-60980-CIV, 2022 WL 4765339, at *3 (S.D. Fla. July 18,
2022) (denying summary judgment and asserting that
defendant’s “very argument that Plaintiffs’ evidence is based
on speculation and conjecture presents issues of credibility
and evidence weighing not fit for resolution at the summary
judgment phase” where defendant contended plaintiff could not
prove causation through testimony as to what plaintiff would
have done in the absence of defendant’s negligence).
Polsinelli argues that any evidence that Mr. Seijas
would have acted on its advice is belied by Q3I’s failure to
follow counsel’s advice to register as an investment broker.
(Doc. # 78 at 19). However, Mr. Seijas’s affidavit affirming
that he would have acted, taken together with his actions to
alert authorities in December 2019, are enough to create a
genuine dispute and prevent summary judgment.
Based on Mr. Alfieri’s opinion and Mr. Seijas’s
affidavit, a reasonable jury could find that Vyas has
demonstrated that Polsinelli’s alleged advice that the flow
of profits directly from Q3I to Q3H was acceptable prevented
anyone from discovering Mr. Ackerman’s fraud. Therefore, the
Court denies Polsinelli’s Motion as to its request for final
summary judgment.
3. Limitation of Damages
In the alternative, Polsinelli seeks partial summary
judgment, limiting any potential damages to monies wrongfully
distributed by Q3H after October 9, 2019. (Doc. # 78 at 20-
21). Polsinelli contends that Vyas has not demonstrated any
evidence of alleged negligence other than the October 9 Call,
and, therefore, Vyas cannot seek damages prior to that event.
(Id.). Vyas disagrees, pointing to an earlier phone call on
May 10, 2019 between Polsinelli and Q3I and an email from Mr.
Seijas on July 9, 2019, indicating that Mr. McEvoy found the
flow of funds structure acceptable.
The evidence relied upon by Vyas does not create a
dispute of fact that the only potential act of negligence
occurred on October 9, 2019. Neither the May 10, 2019, call
during which “business structure and concerns” were discussed
nor the July 9, 2019, email where Mr. Seijas stated that Mr.
McEvoy – not Polsinelli – approved of the flow of funds
indicates that Polsinelli approved of the flow of profits
from Q3I to Q3H. As to the email, a communication indicating
that Mr. McEvoy approved the flow of funds does not invite a
supposition that Polsinelli approved as well. As to the call,
a discussion of “business structure and concerns,” without
more, is not enough to indicate that Polsinelli approved the
flow of funds. Finally, Vyas’s expert reports focus only on
the potential negligence of the October 9 Call. As explained
previously, expert testimony is necessary to support Vyas’s
claims. See Evans, 313 F. App’x at 258 (“Our review of Florida
case law indicates that a legal malpractice plaintiff must
present expert testimony to establish the appropriate
standard of care (and breach thereof) unless the lawyer’s
lack of care and skill is so obvious that the trier of fact
can resolve the issue as a matter of common knowledge.”).
Because there is no record evidence sufficient to
demonstrate that Polsinelli’s alleged negligence occurred
prior to October 9, 2019, the Court grants Polsinelli’s Motion
as to its request for partial summary judgment. Vyas’s
potential damages are limited to monies wrongfully
distributed by Q3H after October 9, 2019.
Accordingly, it is now
ORDERED, ADJUDGED, and DECREED:
(1) Defendant Polsinelli PC’s Daubert Motion to exclude the
testimony of Arnold Spencer (Doc. # 98) is DENIED.
(2) Polsinelli’s Daubert Motion to exclude the testimony of
Anthony Alfieri (Doc. # 99) is GRANTED in part and DENIED
in part. Mr. Alfieri may not proffer legal conclusions
at trial, including the legal conclusion contained in
Conclusions 2 and 3 of his report. The Motion is denied
in all other respects.
(3) Sanket Vyas’s Daubert Motion to exclude the testimony of
Ira Kustin (Doc. # 100) is GRANTED in part and DENIED in
part. Mr. Kustin may not proffer legal conclusions at
trial, including the legal conclusion contained in
Conclusions 7 and 8 of his report. The Motion is denied
in all other respects.
(3) Polsinelli’s Motion for Summary Judgment (Doc. # 78) is
GRANTED in part and DENIED in part. Vyas’s potential
damages are limited to monies wrongfully distributed by
Q3H after October 9, 2019. Summary judgment is denied in
all other respects.
DONE and ORDERED in Chambers in Tampa, Florida, this
30th day of June, 2023.
VIRGINIA M. HERNANDEZ’COVINGTON
UNITED STATES DISTRICT JUDGE
45