National Credit Union Administration Board v. Wells Fargo Bank, National Association

‘USDC SDNY

DOCUMENT □

UNITED STATES DISTRICT COURT ELECTRONICALLY FILED |

SOUTHERN DISTRICT OF NEW YORK DOC #: oe

manner enna nnmnnnmnnnnmnnn eK DATE FILED: 5/7/2020. |

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NATIONAL CREDIT UNION _

ADMINISTRATION BOARD, et al.,

Plaintiffs, 14-CV-10067 (KPF)(SN)

-against- ORDER

WELLS FARGO BANK, NATIONAL

ASSOCIATION,

Defendant.

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SARAH NETBURN, United States Magistrate Judge:

Plaintiffs National Credit Union Administration Board and Graeme W. Bush

(“Plaintiffs”) move to strike the declaration of Devon Avallone-Graves and an accompanying

exhibit submitted in support of Defendant Wells Fargo Bank, N.A.’s (“Wells Fargo”) Daubert

motion. See Plaintiffs’ Letter Motion to Strike, ECF No. 500 (“Pls.’ Mot.”). Plaintiffs contend

that the declaration and exhibit constitute expert testimony and should be barred due to Wells

Fargo’s failure to timely identify Avallone-Graves as an expert. As reflected in the

declaration, Avallone-Graves is not functioning as an expert but as a summary witness.

Accordingly, the motion to strike is DENIED.

The Court presumes the parties’ familiarity with the factual and procedural history of

this complex commercial litigation. The Court therefore incorporates its prior factual

recitations by reference.

BACKGROUND

Avallone-Graves is a Director and Senior Project Manager at Oak Branch Advisors

(“Oak Branch’), a consulting company that provides reunderwriting services, due diligence,

and litigation consulting services. Oak Branch assisted Wells Fargo’s reunderwriting experts

in their review in this case. See Amended and Corrected Declaration of Devon Avallone-

Graves ¶¶ 2-3, ECF No. 504-1 (Avallone-Graves Decl.”). Defense counsel asked Oak

Branch to review the materials relied upon by Plaintiffs’ reunderwriting expert, Gary Shev,

in finding that certain loans breached representations and warranties. Oak Branch was to

determine whether Plaintiffs’ expert’s opinions regarding those breaches were based in part

on materials that did not exist at the time the loan was originated (“post origination

document”) or did not exist until after the date on which Plaintiffs allege that Wells Fargo

discovered or should have discovered a purported breach (“post-discovery document”). Id.

at ¶ 5.

Defense counsel identified 1,228 loans and corresponding materials for Oak Branch to

review. Id. at ¶ 6. Counsel also specified the relevant dates on which Plaintiffs allege that

Defendant discovered or should have discovered a breach. Oak Branch’s review was

conducted by a team of six underwriters supervised by Avallone-Graves and Oak Branch’s

managing director. Each underwriter was assigned a subset of materials to determine: (1) the

category of information relied upon (i.e. income document, bankruptcy filing, additional

mortgage) and (2) the date of each document. Id. at ¶¶ 7-9. After the materials were

categorized, Avallone-Graves and two other Oak Branch directors analyzed the results to

determine whether Plaintiffs’ expert used post-origination documents to reference pre- or

post-origination factors and whether all post-origination materials were dated before the

relevant discovery date. Id. at ¶¶ 10-14. Oak Branch’s full review is summarized in a

spreadsheet attached as an exhibit to the four-page Avallone-Graves Declaration.

DISCUSSION

Under Federal Rule of Evidence 702, expert witnesses provide opinions when “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.” Fed. R. Evid. 701(a); United States

v.Lebedev, 932 F.3d 40, 49 (2d Cir. 2019). By contrast, summary witnesses may testify

using “a summary, chart, or calculation to prove the content of voluminous writings,

recordings, or photographs that cannot be conveniently examined in court.” Fed. R. Evid.

1006. To be admissible, a summary must be “based on foundation testimony connecting it

with the underlying evidence summarized.” SEC v. Lek Secs. Corp., No. 17cv1789 (DLC),

2019 WL 3034888, at *2 (S.D.N.Y. July 11, 2019) (citing Fagiola v. Nat’l Gypsum Co. AC

& S., 906 F.2d 53, 57 (2d Cir. 1990)). The use of summary testimony is a “common

procedure” that has been “regularly approved” by the Court of Appeals. U.S. v. Lasko, 146

F.App’x. 530, 532 (2d Cir. 2005) (summary order) (citing United States v. Conlin, 551 F.2d

534, 538 (2d Cir. 1977)).

In support of the motion to strike, Plaintiffs argue both that Avallone-Graves is an

undisclosed expert and that her declaration contains misleading information. As for their first

argument, Plaintiffs contend that Avallone-Graves is an expert because: (1) her declaration

presents wholly new analysis; (2) she and her team performed “complex and opaque” work; and

(3) she changed the dates for some documents based on assumptions about when they were

created. See Pls.’ Mot. 2-5.

The Avallone-Graves Declaration and accompanying chart prepared to present Oak

Branch’s review is summary, not expert evidence. The testimony was prepared to summarize a

review of voluminous materials and to aid the Court in analyzing Defendant’s Daubert briefing.

Contrary to Plaintiffs’ assertion, the Declaration does not put forth new analysis; it merely

describes the review process and summarizes the findings of Oak Branch’s sorting exercise. The

exhibit to the Declaration organizes the findings and required no expertise to create. That the

work was time-consuming, burdensome, or performed by people with expertise does not convert

it into expert testimony. See Lebedev, 932 F.3d at 50 (testimony of accountant and litigation

consultant was summary evidence). See also United States v. Milkiewicz, 470 F.3d 390, 401 (1st

Cir. 2006) (chart that took “patience but not expertise” was summary evidence). The fact that

Avallone-Graves made certain assumptions about the dates of documents in her Declaration does

not make her an expert, either. See Lek Secs., 2019 WL 3034888, at *3 (assumptions that

explain the process used to summarize massive, confusing data were not expert testimony).

Finally, to the extent that Plaintiffs disagree with Avallone-Graves’s assumptions or believe

that the testimony is unclear or misleading, they should argue as much in response to the Daubert

motion. See Fagiola, 906 F.2d at 58 (objections that a summary was misleading “go more to its

weight than to its admissibility”) (citation omitted). See also United States v. Hemphill, 514 F.3d

1350, 1359 (D.C. Cir. 2008) (“[A]dmissible evidence may be unpersuasive and a [party] has the

opportunity rebut it”).

Plaintiffs’ motion to strike is denied. The Clerk of Court is respectfully requested to

terminate the motion at ECF No. 500.

SO ORDERED.

DATED: May 7, 2020

New York, New York