holding the most important inquiry when evaluating whether to allow further discovery under the good cause standard is whether the party was diligent in pursuing discovery
How later courts described this case
- holding the most important inquiry when evaluating whether to allow further discovery under the good cause standard is whether the party was diligent in pursuing discovery
- emphasizing that there must be a danger of unfair prejudice, not mere prejudice
Written by the judges who cited it.
The opinion
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
EQUITY RESOURCES, INC.,
Plaintiff,
Case No. 2:21-cv-5922
v. Judge Edmund A. Sargus, Jr.
Magistrate Judge Chelsey M. Vascura
T2 FINANCIAL, LLC, D/B/A
REVOLUTION MORTGAGE,
Defendant.
OPINION AND ORDER
This matter is before the Court on several motions in limine filed by Plaintiff Equity
Resources, Inc. (ECF Nos. 105, 106) and Defendant T2 Financial, LLC d/b/a Revolution
Mortgage (ECF Nos. 97, 98, 101, 102, 103). For the reasons stated below, Revolution’s motion
to exclude the opinion testimony of Edwin Rizor (ECF No. 102) is GRANTED in part and
DENIED in part; Revolution’s motion to exclude evidence of lost profits (ECF No. 97) is
DENIED; Revolution’s motions to preclude Equity from claiming certain trade secrets (ECF
Nos. 98, 101) are DENIED; and Revolution’s motion to exclude the testimony of Tom Piecenski
(ECF No. 103) is DENIED. Equity’s motion to exclude evidence related to Daniel Walker (ECF
No. 105) and its motion to exclude the examples of Encompass Instructions published on the
internet (ECF No. 106) are DENIED.
BACKGROUND1
This case is about whether Revolution orchestrated a plan to recruit former Equity
employees to use and misappropriate certain confidential information, or trade secrets, from
Equity in order to divert mortgage loans to their new employer, Revolution.
1 For a more complete factual background, the reader is directed to the Court’s summary
judgment opinion and order in this case. (ECF No. 80.)
Equity and Revolution are two competing mortgage lenders. (ECF No. 80, PageID 2450.)
Between April 2021 and June 2021, three employees—April Roberts, Larry Dugger, and Kelly
Thoman—left Equity and joined Revolution as loan officers. (Id. at PageID 2452–53.) April
Roberts and Larry Dugger left Equity in April 2021. (Id. at PageID 2451.) Equity asserts that
before leaving, April Roberts inappropriately took two types of protected information: (1) a
customer list and (2) a set of instructions explaining how to input information into Equity’s loan
origination system Encompass (“Encompass Instructions”). (Id.) The weekend after April
Roberts and Larry Dugger left, Equity contends that Kelly Thoman forwarded emails to their
new emails addresses that included borrower referrals and customer leads. (Id. at PageID 2452.)
After being disciplined for forwarding the emails, Kelly Thoman also left Equity to join
Revolution in June 2021. (Id.)
Equity then filed this lawsuit against Revolution and the three employees in November
2021 alleging that Revolution solicited Equity’s former employees to steal its trade secrets and
used those trade secrets to divert mortgage loans from Equity to Revolution. (See Am. Compl.,
ECF No. 7.) The individual employees have since been dismissed as defendants. (ECF Nos. 25,
26.) After discovery, both parties filed motions for summary judgment. (ECF Nos. 46, 47.) This
Court granted in part and denied in part Revolution’s motion for summary judgment (ECF No.
47) and denied Equity’s motion (ECF No. 46). (ECF No. 80.) Equity’s remaining claims against
Revolution are (1) tortious interference with a business relationship, (2) conversion, and
(3) misappropriation of trade secrets.2
2 Equity brings misappropriation of trade secrets claims under both the Ohio Uniform
Trade Secrets Act, R.C. § 1333.61 (“OUTSA”) and under the federal Defend Trade Secrets Act,
18 U.S.C. § 1839 (“DTSA”). Because the acts are similar in scope and contain nearly identical
definitions of statutory terms, the claims are analyzed together. See Ridge Corp. v. Altum LLC,
No. 2:21-cv-5915, 2023 U.S. Dist. LEXIS 19926, at *5 (S.D. Ohio Feb. 3, 2023) (Morrison, J.)
(analyzing federal and state claims together).
This case is set for trial on March 18, 2024. Equity and Revolution each filed motions in
limine regarding the anticipated evidence at trial. After responses from each, this matter is ripe
for the Court’s review.
STANDARD OF REVIEW
Neither the Federal Rules of Evidence3 nor the Federal Rules of Civil Procedure
explicitly authorize a court to rule on an evidentiary motion in limine. The United States
Supreme Court has noted, however, that the practice of ruling on such motions “has developed
pursuant to the district court’s inherent authority to manage the course of trials.” Luce v. United
States, 469 U.S. 38, 41 n. 4 (1984). Motions in limine allow the Court to rule on the admissibility
of evidence before trial to expedite proceedings and provide the parties with notice of the
evidence upon which they may not rely to prove their case. Bennett v. Bd. of Educ. of
Washington Cnty. Joint Vocational Sch. Dist., C2-08-CV-0663, 2011 U.S. Dist. LEXIS 116412,
at *2 (S.D. Ohio Oct. 7, 2011) (Marbley, J.).
To prevail on a motion in limine, the movant must show that the evidence is clearly
inadmissible. Id. If the movant fails to meet this high standard, a Court should defer evidentiary
rulings so that questions of foundation, relevancy, and potential prejudice may be resolved in the
context of trial. Henricks v. Pickaway Corr. Inst., No. 2:08-CV-580, 2016 WL 4577800, at *2
(S.D. Ohio Sept. 2, 2016) (Marbley, J.). Whether to grant a motion in limine is within the
discretion of the trial court. Id. (citing Branham v. Thomas M. Cooley Law Sch., 689 F.3d 558,
562 (6th Cir. 2012); Bennett, 2011 WL 4753414, at *1.) The Court may reconsider the
admissibility of evidence and even change its ruling on a motion in limine “as the proceedings
give context to the pretrial objections.” Id.
3 All references to “Rules” herein are to the Federal Rules of Evidence unless otherwise
noted.
ANALYSIS
Revolution filed three motions in limine seeking a Court Order addressing the following:
(I) excluding the expert and opinion testimony of Edwin Rizor (ECF No. 102) and certain
evidence Mr. Rizor will rely on to prove lost profits at trial (ECF No. 97); (II) precluding Equity
from claiming that certain documents are trade secrets (ECF Nos. 98, 101); and (III) excluding
the testimony of Tom Piecenski (ECF No. 103). Equity filed two motions in limine seeking to
(IV) exclude the deposition testimony of Anthony Anderson related to Daniel Walker (ECF No.
105) and (V) to exclude examples of instructions created by other mortgage lenders related to the
use of the Encompass system (ECF No. 106). The Court addresses each in turn.
I. Revolution’s Motions in Limine to Exclude Testimony of Edwin Rizor (ECF
No. 102) and Evidence Related to Lost Profits (ECF No. 97)
Revolution’s motions in limine (ECF Nos. 97, 102) seek to limit Equity’s ability to
introduce testimony at trial regarding Equity’s purported damages. Specifically, Revolution
moves to prevent Equity’s president, Edwin Rizor from offering an expert opinion or a lay
opinion on lost profit damages, or from testifying on anything that may contradict his deposition
testimony. (ECF No. 102.) Revolution also seeks an order from this Court excluding the exhibits
and documents Mr. Rizor used to calculate Equity’s purported damages, including third-party
industry reports. (ECF No. 97.)
A. Testimony of Edwin Rizor (ECF No. 102)
Equity argues that Mr. Rizor should be allowed to offer lay opinion testimony and should
be recognized as an expert to testify on damages. (ECF No. 113.) Revolution however argues
that Mr. Rizor’s testimony should be excluded under Rules 701 and 702. (ECF No. 102.)
Revolution argues that Mr. Rizor lacks personal knowledge about the factors used to
estimate Equity’s lost profits, and therefore his opinion testimony about Equity’s damages
should be excluded under Rule 701. (ECF No. 102, PageID 2589.) Equity disagrees and submits
that Mr. Rizor is the president and founder of the company and has worked in the mortgage-loan
industry for 35 years. (ECF No. 113, PageID 3021.) His experience gives him personal
knowledge about the factors on which Equity relies to estimate its lost profits. (Id.)
Rule 701 allows a witness who is not testifying as an expert to give a lay opinion that is
(a) rationally based on the witness’s perception; (b) helpful to understand the witness’s testimony
or to determine a fact in issue; and (c) not based on scientific, technical, or other specialized
knowledge within the scope of Rule 702. Fed. R. Evid. 701. The Advisory Committee Notes
explain that:
Most courts have permitted the owner or officer of a business to testify to the value
or projected profits of the business, without the necessity of qualifying the witness
as an accountant, appraiser, or similar expert. Such opinion testimony is admitted
not because of experience, training or specialized knowledge within the realm of
an expert, but because of the particularized knowledge that the witness has by virtue
of his or her position in the business.
Fed. R. Evid. 701, Advisory Committee Notes for the 2000 Amendments (internal citations
omitted). Courts in this Circuit recognize that the commentary above “envisions testimony of
damages by officers of businesses.” Advanced Drainage Sys. v. Quality Culvert, Inc., No. 2:12-
1121, 2015 U.S. Dist. LEXIS 36037, at *28 (S.D. Ohio Mar. 23, 2015) (Economus, J.) (citing
Consol. Rail Corp. v. Grand Trunk W. R.R. Co., 963 F. Supp. 2d 722, 732 (E.D. Mich. 2013)).
Further, an officer with knowledge and participation in the day-to-day affairs of the business can
rely on documents prepared by others, “while still possessing the requisite personal knowledge
or foundation to render his lay opinion admissible.” Id. (quoting Lightning Lube, Inc. v. Witco
Corp., 4 F.3d 1153, 1175 (3d Cir. 1993)).
Revolution relies on LifeWise Master Funding v. Telebank, a Tenth Circuit decision
which excluded a corporate officer’s lay opinion testimony on lost profit damages. 374 F.3d 917,
930 (10th Cir. 2004). There, the Tenth Circuit held the company president could not testify about
damages calculated by “rolling averages, S-curves, and compound growth rates” that the
president had never used in his job. Id. But the Tenth Circuit noted that the president “could have
given a straightforward opinion as to lost profits using conventional methods based on [the
company’s] actual operating history.” Id.
Here, Mr. Rizor’s opinions on Equity’s damages are based on his particularized
knowledge by virtue of his position as the president and founder of Equity, not because of his
specialized knowledge as an expert. Mr. Rizor testified in his deposition about the factors used to
estimate Equity’s lost profits. (See Rizor Dep., ECF No. 113-1, 22:1–22:4.) He testified that
Equity’s profits per loan were usually in line with the industry average, and that he reached his
lost profit estimate by multiplying that average profit per loan by the number of loans allegedly
diverted by Revolution. (Id. at 36:19–37:1.) This calculation was straightforward and
distinguishable from LifeWise where the president used complicated metrics like “rolling
averages, S-curves, and compound growth rates.” (ECF No. 113, PageID 3022.) Accordingly,
and because courts in this Circuit allow corporate officers to offer opinion testimony on their
business damages, Mr. Rizor’s opinions on lost profits will be admissible under Rule 701.
Revolution remains free to object to specific statements at trial.
This finding precludes Equity from offering Mr. Rizor as an expert under Rule 702. A
witness can offer lay opinion testimony if they are not testifying as an expert by giving an
opinion based on scientific, technical, or other specialized knowledge within the scope of Rule
702. Fed. R. Evid. 701. Further, Equity did not disclose Mr. Rizor as an expert witness.
Accordingly, Equity may not offer Mr. Rizor as an expert witness at trial.
B. Mr. Rizor’s Purported Unresponsive Deposition Testimony
Next, Revolution seeks an Order preventing Mr. Rizor from testifying at trial about
anything that may contradict his deposition testimony. (ECF No. 102, PageID 2591.) Revolution
submits that Mr. Rizor was unresponsive to questions about Equity’s purported damages during
his Rule 30(b)(6) deposition. (Id.) Revolution argues that Mr. Rizor should be confined to his
deposition testimony at trial to discourage parties from deliberately presenting uninformed or
unresponsive corporate witnesses at depositions, and then later educating the witness to offer
more favorable and responsive testimony at trial. (Id.) Equity refutes that Mr. Rizor was
unresponsive during his deposition. (ECF No. 113, PageID 3026.)
A Rule 30(b)(6) designee must be knowledgeable about the subjects described in the
notice of deposition and the corporate entity must prepare that witness to testify not just to his or
her own knowledge, but to the organization’s knowledge. Oro BRC4, LLC v. Silvertree
Apartments, Inc., No. 2:19-cv-4907, 2022 U.S. Dist. LEXIS 48274, at *33 (S.D. Ohio Mar. 18,
2022) (Marbley, J.) (but noting that “absolute perfection” is not required in preparing the
witness). While the testimony of a Rule 30(b)(6) designee may be binding on the party offering
it, the corporate entity is not precluded from updating or clarifying the deposition testimony at
trial. Little Hocking Water Ass’n, Inc. v. E.I. Du Pont de Nemours & Co., 2013 WL 1791083, at
*11 (S.D. Ohio April 26, 2013) (M.J., King); Whitesell Corp. v. Whirlpool Corp., No. 1:05-CV-
679, 2009 U.S. Dist. LEXIS 101106, at *5 (W.D. Mich. Oct. 30, 2009).
A party is however precluded from first offering a non-responsive Rule 30(b)(6) witness
and then later calling a different, more-responsive witness at trial. Ruth v. A.O. Smith Corp., No.
1:04-CV-18912, 2006 U.S. Dist. LEXIS 7361, at *30 (N.D. Ohio Feb. 27, 2006). Revolution
cites Ruth to argue that Mr. Rizor was so unresponsive at his deposition, that any testimony of
his that is now more responsive should be excluded. (ECF No. 102, PageID 2591.) But Ruth is
distinguishable because the corporate entity in that case offered a new, different, and more-
responsive corporate designee at trial. Ruth, 2006 U.S. Dist. LEXIS 7361, at *3.
Here, Equity is not trying to offer a new corporate designee or suggesting that it is not
bound by Mr. Rizor’s deposition testimony. (ECF No. 113, PageID 3026.) To the extent that Mr.
Rizor’s testimony is “more responsive” at trial by merely clarifying or updating his deposition
testimony, “no rule of evidence or civil procedure requires its exclusion on that basis alone.”
Dow Corning Corp. v. Weather Shield Mfg., No. 09-10429, 2011 U.S. Dist. LEXIS 111419, at
*14 (E.D. Mich. Sep. 29, 2011). Of course, to the extent that Mr. Rizor’s testimony at trial
contradicts his deposition testimony, Revolution can impeach Mr. Rizor with his prior
inconsistent testimony. The Court, however, is not persuaded by Revolution’s argument that Mr.
Rizor should be barred from testifying at trial on the grounds that his Rule 30(b)(6) testimony
was non-responsive.
Accordingly, the motion to preclude Mr. Rizor from offering opinion testimony at trial
(ECF No. 102) is GRANTED in part and DENIED in part. Mr. Rizor may offer lay opinion
testimony on Equity’s lost profits under Rule 701 but may not offer expert testimony under Rule
702. While Equity is bound by Mr. Rizor’s Rule 30(b)(6) testimony, Mr. Rizor may clarify and
update his deposition testimony, but may be impeached with any inconsistencies.
C. Industry Reports Relating to Equity’s Lost Profits (ECF No. 97)
Revolution has also moved to exclude the evidence that Equity and Mr. Rizor may rely
on when testifying about Equity’s lost profit damages. (ECF No. 97.) Specifically, Revolution
moves to exclude three third-party industry reports and a list of closed loans that Revolution
allegedly improperly diverted from Equity. (Id. at PageID 2540.) Equity does not intend to offer
the list of closed loans into evidence (ECF No. 113, PageID 3032), and thus Revolution’s motion
(ECF No. 97) is DENIED in part as moot regarding the closed loan list.
Equity does, however, intend to offer the third-party industry reports, including:
(1) MBA Annual Mortgage Bankers Performance Report for 2021 (“MBA
Report”);
(2) An email newsletter from the Mortgage Bankers Association enclosing a
“Chart of the Week,” bar graph (“MBA Chart”);
(3) MBA Production Profits Article by Adam DeSanctia (“MBA Production
Profits Article”).
According to Revolution, these reports should be excluded because each contains
inadmissible hearsay, cannot be authenticated, and their probative value would be substantially
outweighed by the danger of unfairly prejudicing Revolution and confusing the jury. (Id. at
PageID 2546–47.)
i. Hearsay (Rule 803(17))
First, Revolution argues that the industry reports are inadmissible hearsay because they
are being offered to prove the truth of the matter asserted—the average revenue and expenses
that a mortgage lender like Equity would sustain. (Id. at PageID 2545.) Equity submits that these
reports are not being offered for the truth of their contents and should be admissible under Rule
803(17) as a commercial publication relied on by those in the mortgage lending industry. (ECF
No. 113, PageID 3030.) The Court agrees with Equity.
Rule 803(17) provides, “Market quotations, tabulations, lists, directories, or other
published compilations, generally used and relied upon by the public or by persons in particular
occupations” are not excluded by the rule against hearsay. Fed. R. Evid. 803(17). All three
industry reports fall within this exception to the rule against hearsay because they are relied upon
by those in the mortgage lending industry and are published commercial data compilations.
ii. Authentication (Rule 901)
Next, Revolution argues that Mr. Rizor cannot authenticate any of the reports because he
does not have actual knowledge of the creation of the reports. (See ECF No. 97, PageID 2545.)
To be authenticated, a proponent of the evidence need only produce proof “sufficient to support a
finding that the item is what the proponent claims it is.” Fed. R. Evid. 901(a). Rule 901(b)
describes the methods by which evidence is authenticated. Fed. R. Evid. 901(b).
Mr. Rizor need not have personal knowledge of the creation of the reports to produce
evidence sufficient to support a finding that the reports are what Equity claims they are.
Distinctive characteristics of the reports, including the Mortgage Bankers Association’s branding
and logo, taken together with the content and substance can show sufficient evidence of
authenticity. See Fed. R. Evid. 901(b)(4). Rule 901 does not require that the reports be probative
of a particular fact or that a proponent prove beyond doubt that the evidence is what it purports to
be. Design Basics, LLC v. Forrester Wehrle Homes, Inc., No. 3:15CV00666, 2018 U.S. Dist.
LEXIS 55557, at *14 (N.D. Ohio Mar. 30, 2018) (citations omitted).
Accordingly, the Court will not grant Revolution’s motion in limine on the grounds that
Mr. Rizor lacks personal knowledge of the creation of the reports. Issues of authentication and
foundation are issues better examined during trial as evidence is presented in the context of the
parties’ arguments and testimony. See Ind. Ins. Co. v. Gen. Elec. Co., 326 F. Supp. 2d at 846
(noting that unless evidence is clearly inadmissible on all potential grounds, “evidentiary rulings
should be deferred until trial so that questions of foundation, relevancy and potential prejudice
may be resolved in [the] proper context”). Revolution may renew its objections at trial if
appropriate and remains free to attack the credibility, weight, and probative value of the industry
reports during cross-examination.
iii. Best Evidence Rule (Rule 1002)
Revolution also argues the Court should exclude the third-party industry reports under the
best evidence rule. (ECF No. 97, PageID 2546.) Rather than relying on industry reports,
Revolution contends that Equity must use its original financial records to prove damages. (Id.)
Rule 1002, often referred to as the “best evidence rule” states that “[a]n original writing,
recording, or photograph is required in order to prove its content unless these rules or federal
statute provides otherwise.” Fed. R. Evid. 1002. The best evidence rule, in other words, has no
applicability unless a party seeks to prove the contents of a particular document. Americredit Fin.
Servs. v. Lyons, No. 3:19-cv-01045, 2022 U.S. Dist. LEXIS 6782, at *30 (M.D. Tenn. Jan. 13,
2022) (citations omitted). Equity is not seeking to prove the contents of its financials with the
industry reports, but rather offers the reports to compare its estimated lost profits to the industry
average. Because Equity is not offering the reports to prove the contents of a particular
document, the best evidence rule does not apply.
iv. Unfair Prejudice (Rule 403)
Lastly, Revolution argues that even if the industry reports are admissible, they should be
excluded because their probative value is substantially outweighed by the dangers of confusing
the jury and unfairly prejudicing Revolution. (ECF No. 97, PageID 2546.) Revolution reasons
that the averages included in the reports offers very little probative value of the estimated lost
profit on Equity’s loans. (Id. at PageID 2545.) The reports fail to account for the size or type of
loans included in their reported averages, as well the costs of the bank operations—all of which
impact the profitability of mortgage loans. (Id.)
Revolution’s arguments are directed at the persuasive weight the Court should assign to
the reports, rather than their admissibility. Revolution remains free to challenge the probative
value of the industry reports at trial. But Revolution has not set forth sufficient evidence that the
potential prejudice it would face would rise to the level that warrants exclusion.
Accordingly, Revolution’s motion in limine to exclude the exhibits and documents,
including third party industry reports, Mr. Rizor used to calculate Equity’s purported damages
(ECF No. 97) is DENIED.
II. Revolution’s Motion in Limine to Preclude Equity from Claiming Certain
Trade Secrets at Trial (ECF Nos. 98 and 101)
Revolution requests that this Court preclude any evidence of trade secrets that Equity did
not identify as a trade secret in discovery. As a procedural matter, Revolution filed an Amended
motion (ECF No. 101) to replace the previously filed motion making the same arguments (ECF
No. 98). Accordingly, the original motion in limine (ECF No. 98) is DENIED as moot.
Now turning to the merits of Revolution’s amended motion. First, Revolution asserts that
Equity impermissibly alleged two newly claimed trade secrets in its motion for summary
judgment, after discovery closed. (ECF No. 46.) The alleged newly claimed trade secrets are: (1)
email instructions explaining how to input information into Encompass and (2) information from
Equity’s customer relationship management system. (ECF No. 101, PageID 2567.) Because
Equity did not disclose these two trade secrets in its supplemental response to Revolution’s
Interrogatories, Revolution argues Equity should not be allowed to use that information at trial
under Rule 37(c)(1) of the Federal Rules of Civil Procedure. (Id. at PageID 2569.)
Second, Revolution asserts that Equity intends to “expand its trade secret claim and
present to the jury any document exchanged in discovery as a claimed trade secret at trial.” (Id.
at PageID 2568.) During discovery, Equity identified only 32 specific documents as being
claimed trade secrets. (Id. at PageID 2569.) But now Revolution asserts Equity has identified
more than 150 exhibits, any of which it could claim are trade secrets at trial. (Id.)
The first step in any misappropriation of trade secrets claim is to establish the existence
of a trade secret. Courts in the Sixth Circuit require a plaintiff to identify the information it
claims is entitled to protection as a trade secret with sufficient “specificity to separate the secret
from the general knowledge.” Ridge Corp. v. Altum LLC, No. 2:21-cv-5915, 2023 U.S. Dist.
LEXIS 19926, at *6 (S.D. Ohio Feb. 3, 2023) (Morrison, J.).
In this Court’s Opinion and Order on the parties’ motions for summary judgment, the
Court held that Equity put forth sufficient evidence to identify with particularity three categories
of trade secrets. (ECF No. 80, PageID 2468–69.) Those three categories included (1) Equity’s
customer database, or CRM, (2) loan documents containing customer non-public information,
and (3) the Encompass Instructions. (Id.) Equity now asks the Court to reverse course and find
all three categories were not identified with sufficient particularity to be introduced at trial. (ECF
No. 101, PageID 2569.) The Court declines to revisit its summary judgment ruling in the context
of a motion in limine.
Given the Court’s prior ruling on this issue, the Court DENIES Revolution’s motion
(ECF No. 101). Equity may introduce evidence and testimony of trade secrets within the three
categories described in this Court’s prior Opinion and Order (ECF No. 80).
III. Revolution’s Motion in Limine to Exclude Trial Testimony of Equity’s Vice
President Tom Piecenski (ECF No. 103)
Revolution seeks an Order excluding the trial testimony of Equity’s Vice President, Tom
Piecenski. (ECF No. 103.) Equity did not include Mr. Piecenski in its initial disclosures required
by Rule 26(a)(1) of the Federal Rules of Civil Procedure. (ECF No. 103-1.) But Equity did
include Mr. Piecenski on its list of witnesses for trial filed on February 12, 2024. (ECF No. 93,
PageID 2510.) Because Equity failed to include Mr. Piecenski in its initial disclosures,
Revolution argues that Mr. Piecenski should be barred from testifying under Rule 37 of the
Federal Rules of Civil Procedure. (Id. at PageID 2609–10.)
Equity reasons that while Mr. Piecenski was not included in its initial disclosures, Mr.
Piecenski was listed as someone who may have discoverable information and included in
Equity’s response to Revolution’s first set of interrogatories. (ECF Nos. 111, 111-1.) Therefore,
Mr. Piecenski is not a surprise witness and any alleged harm caused by the late disclosure is
harmless and outweighed by the importance of Mr. Piecenski’s testimony. (ECF No. 111,
PageID 2955–56.)
Rule 37 states that “[i]f a party fails to provide information or identify a witness as
required by Rule 26(a) or (e), the party is not allowed to use that information or witness . . . at
trial, unless the failure was substantially justified or is harmless.” Fed. R. Civ. P. 37(c)(1). Rule
37 ensures timely production of evidence and prevents abuse of the discovery process by future
litigants. Hardesty v. Kroger Co., No. 1:16-cv-298, 2022 U.S. Dist. LEXIS 43300, at *10 (S.D.
Ohio Mar. 11, 2022) (“too much leniency rewards untimely production of evidence”).
When determining whether a late disclosure is “substantially justified” or “harmless,”
courts balance these five factors:
(1) the surprise to the party against whom the evidence would be offered;
(2) the ability of that party to cure the surprise;
(3) the extent to which allowing the evidence would disrupt the trial;
(4) the importance of the evidence;
(5) the non-disclosing party’s explanation for its failure to disclose the evidence.
The goal in weighing these factors is to separate the honest mistakes from the
“underhanded gamesmanship that warrants the harsh remedy of exclusion.” Bisig v. Time
Warner Cable, Inc., 940 F.3d 205, 219 (6th Cir. 2019) (citations omitted). On balance, the Court
finds the five factors favor Equity.
A. Surprise
Revolution claims it was surprised by Equity’s inclusion of Mr. Piecenski in their
February 12, 2024 list of witnesses for trial. (ECF No. 103, PageID 2610–11.) Equity does not
appear to dispute that it failed to include Mr. Piecenski on its list of initial disclosures, but
submits any surprise was cured by its inclusion of Mr. Piecenski in its first set of responses to
Revolution’s interrogatories. (ECF No. 111, PageID 2950.) Equity disclosed in those responses
that Mr. Piecenski may have knowledge of the “customers and sales activities” of the three
individual employees and former defendants, but Revolution contends that Equity did not
disclose that Mr. Piecenski would have discoverable information about Equity’s
misappropriation of trade secrets claims. (Id. at PageID 2951; ECF No. 103, PageID 2612.)
Because Revolution was not under the impression that Mr. Piecenski had relevant knowledge to
the misappropriation of trade secrets claim, Revolution did not depose Mr. Piecenski. (ECF No.
103, PageID 2612.) Accordingly, the Court finds this factor weighs in Revolution’s favor.
B. Ability to Cure and Disruption at Trial
Revolution argues that it has no ability to depose Mr. Piecenski because the discovery
cutoff deadline has passed. (ECF No. 103, PageID 2613.) Thus, according to Revolution,
allowing him to testify will be disruptive at trial because Revolution has no way of knowing
what his testimony will be. (Id.)
While the discovery deadline expired, Revolution has two options available to it to cure
the surprise. First, since Revolution, despite diligent efforts, did not have the opportunity to
depose Mr. Piecenski during discovery, the Court will reopen discovery for the very limited
purpose of allowing Revolution to depose Mr. Piecenski before trial, if it so choses. See, e.g.,
Dowling v. Cleveland Clinic Found., 593 F.3d 472, 478 (6th Cir. 2010) (holding the most
important inquiry when evaluating whether to allow further discovery under the good cause
standard is whether the party was diligent in pursuing discovery).
Second, Revolution can cure its surprise through cross-examination of Mr. Piecenski. See
EQT Prod. Co. v. Magnum Hunter Prod., Inc., 768 F. App’x 459, 469 (6th Cir. 2019) (“[T]he
ability to cross-examine witnesses about late disclosures during trial both provided an
opportunity to remedy surprise and minimized impact on the trial.”) With these remedies in
mind, the Court finds the second and third factors weigh in Equity’s favor.
C. Importance of the Evidence
Equity claims that Mr. Piecenski’s testimony is “of key and obvious importance to this
case.” (ECF No. 111, PageID 2957.) Mr. Piecenski will offer testimony on the employment
obligations of Equity employees, the misappropriation of Equity’s trade secrets, and the
individual employees alleged tortious interference with Equity’s business relationships. (Id.)
Equity’s emphasis of the importance of Mr. Piecenski’s testimony hurts rather than helps
its position. The more important the evidence or testimony, “the greater the effect of preclusion,
but also the greater the harm in tardy disclosure.” Bisig, 940 F.3d at 220. The parties appear to
agree that the topics Equity designated Mr. Piecenski to testify about are central to the dispute
between the parties. (ECF No. 103, PageID 2614; ECF No. 111, PageID 2957.) Because of its
importance, the harm to Revolution of the tardy disclosure is greater; as well as the harm of
precluding the testimony. Therefore, on balance the Court finds that this factor is neutral.
D. Equity’s Explanation for the Late Disclosure
Equity submits that it never sought to hide Mr. Piecenski as a potential witness at trial.
While its initial disclosures failed to list Mr. Piecenski, Equity reasons that the initial disclosures
are not intended to be a binding final list of people relevant to the case but are based on the
information reasonably available at the early stages of the litigation process. (ECF No. 111,
PageID 2951–52.) Further, Mr. Piecenski was mentioned in other discovery documents that put
Revolution on notice that he may have discoverable information. (Id.)
The Court finds no evidence that Equity engaged in gamesmanship in failing to disclose
Mr. Piecenski in its initial disclosures as to warrant the harsh remedy of excluding his testimony.
After considering the five factors above, the Court finds the factors favor Equity. To the extent
that Revolution is unfairly surprised by Equity’s witness list, the Court will allow Revolution to
conduct a deposition of Mr. Piecenski before trial, if it so choses. Any additional harm caused by
Equity’s late disclosure can be cured by cross-examination. With these remedies in mind,
Revolution’s motion to preclude Tom Piecenski from testifying (ECF No. 103) is DENIED.
IV. Equity’s Motion in Limine to Exclude Deposition Testimony Related to
Daniel Walker (ECF No. 105)
Equity moves to exclude the deposition testimony of Anthony Anderson and exhibits
related to Daniel Walker. (ECF No. 105.) Equity argues that Mr. Walker is a third party, who is
not involved here and thus any evidence related to Mr. Walker is irrelevant. (Id. at PageID 2690.)
Mr. Walker was a loan officer and branch manager at Equity, who left Equity to join Revolution
and then ultimately returned to Equity. (Id.) Equity seeks to exclude two categories of evidence
related to Mr. Walker. First, an email from Mr. Walker’s supervisor Mr. Anderson, where Mr.
Anderson forwarded a customer lead to Mr. Walker after Mr. Walker left Equity (“March 19
Email”). (Id.; see also ECF No. 105-1.) Equity also moves to exclude portions of Mr. Anderson’s
deposition testimony related to Mr. Walker. (Id.; see also Anderson Dep., ECF No. 96.)
The Court finds both categories of evidence are relevant. Evidence is relevant, and
admissible, if it has any tendency to make a fact of consequence more or less probable than it
would be without the evidence. Fed. R. Evid. 402. Here, Equity argues that April Roberts and
Larry Dugger impermissibly forwarded borrower referrals and other customer leads. (See ECF
No. 80, PageID 2452.) Equity purportedly disciplined Kelly Thoman for forwarding the
borrower referrals to April Roberts and Larry Dugger, claiming that customer leads were non-
public customer information and trade secrets. (Id.) The March 19 Email, and Mr. Anderson’s
deposition testimony regarding that email, are relevant to whether customer leads are trade
secrets and whether Equity had a policy in place that forbid employees from taking customer
leads with them when they left employment with Equity.
The Court also disagrees with Equity that the probative value of the March 19 Email is
“de minimis” and should be excluded under Rule 403. (ECF No. 105, PageID 2691.) A court
may exclude relevant evidence “if its probative value is substantially outweighed by a danger of .
. . unfair prejudice, confusing the issues, misleading the jury, undue delay, wasting time, or
needlessly presenting cumulative evidence. Fed. R. Evid. 403; Robinson v. Runyon, 149 F.3d
507, 512 (6th Cir. 1998) (emphasizing that there must be a danger of unfair prejudice, not mere
prejudice). Equity has failed to put forth sufficient evidence to show that the probative value of
the March 19 Email would be substantially outweighed by a danger of unfair prejudice. Thus,
Equity’s motion to exclude evidence related to Daniel Walker, including the March 19 Email and
Mr. Anderson’s deposition testimony (ECF No. 105) is DENIED.
V. Equity’s Motion in Limine to Exclude Examples of Encompass Instructions
Published on the Internet (ECF No. 106)
Equity seeks an Order preventing Revolution from introducing into evidence examples of
a set of instructions created by mortgage lenders in the industry on how to input data into a
mortgage origination system called Encompass. (ECF No. 106.) As part of its misappropriation
of trade secrets claim, Equity argues that Revolution misappropriated a set of instructions created
by Equity to input data into Encompass (“Encompass Instructions”). To support its argument that
the Encompass Instructions were (1) not a trade secret and (2) that Revolution did not engage in
the unauthorized use of these instructions, Revolution seeks to admit into evidence similar
instructions publicly available online (“Encompass Examples”). (ECF No. 109, PageID 2933–
34.) Equity argues that Revolution failed to disclose the Encompass Examples until the eve of
trial, and thus should not be allowed to use them at trial pursuant to Rule 37. (ECF No. 106.)
Rule 37 of the Federal Rules of Civil Procedure prohibits a party from using evidence it
failed to disclose during discovery unless the failure to disclose was substantially justified or is
harmless. Fed. R. Civ. P. 37(c)(1). To determine whether a late disclosure is substantially
justified or harmless, courts balance five factors: (1) the surprise of the party against whom the
evidence is offered; (2) the ability to cure the surprise; (3) the extent to which admitting the
evidence would disrupt trial; (4) the importance of the evidence; and (5) the explanation for the
failure to disclose. Bisig v. Time Warner Cable, Inc., 940 F.3d 205, 219 (6th Cir. 2019) (citations
omitted). When balanced, the five factors favor Revolution.
A. Surprise
Equity argues it first learned that Revolution planned to introduce the Encompass
Examples when the parties exchanged exhibit lists in February 2024. (ECF No. 106, PageID
2720.) Equity argues it was unfairly surprised by the tardy disclosure and was deprived of an
opportunity to use these documents during depositions. (Id. at PageID 2723.)
Revolution counters that Equity was not unfairly surprised because the documents are
publicly available on the internet and April Roberts discussed during her deposition that she
found similar examples of the Encompass Instructions online. (ECF No. 109, PageID 2935; see
also ECF No. 109-1.)
Likewise, the Court discussed the availability of similar instructions on the internet in its
Opinion and Order on the parties’ motions for summary judgment. (ECF No. 80, PageID 2469.)
The Court issued that Opinion on July 17, 2023, more than six months ago—mitigating Equity’s
claimed surprise. (Id.) Although Equity could not use the specific Encompass Examples during
depositions, Equity was on notice that Revolution may introduce evidence of comparable
instructions available on the internet at trial. Consequently, this factor is neutral.
B. Ability to Cure and Disruption at Trial
The ability to cure Equity’s surprise is limited because the discovery cutoff has passed.
Equity argues it will be substantially prejudiced and the trial will be disrupted by introducing the
“hundreds of pages” of documents that Equity will hear details about for the first time at trial.
(ECF No. 106, PageID 2723.) Revolution contends that the trial will not be disrupted because it
intends to use only four pages of the Encompass Examples at trial. (ECF No. 109, PageID 2932.)
Equity can remedy some of its surprise through cross-examination at trial. See EQT Prod.
Co., 768 F. App’x at 469 (finding cross-examination about late disclosures remedied surprise and
minimized the impact on trial). Additionally, any concerns about the trial being disrupted by the
volume of pages contained in the Encompass Examples, are mitigated by Revolution’s
concession that it only intends to introduce a few pages of the Encompass Examples. (ECF No.
109, PageID 2932.) Accordingly, these factors weigh in favor of Revolution.
C. Importance of the Evidence
Revolution argues that the Encompass Examples are important evidence to rebut Equity’s
argument that the Encompass Instructions are trade secrets. (ECF No. 109, PageID 2936–37.)
Generally, the more important the evidence, the greater the harm in excluding the evidence, but
also in permitting the late disclosure. Bisig, 940 F.3d at 220. The Encompass Examples are
relevant to whether instructions on the Encompass system, which Equity claims are entitled to
protection as a trade secret, are publicly available or readily ascertainable. Ridge Corp., 2023
U.S. Dist. LEXIS 19926, at *6 (noting that information that is “generally known, publicly
available, or readily ascertainable by skilled individuals in a plaintiff’s field is not entitled to
protection as trade secret information”). Because the Encompass Examples are central to whether
the information in the Encompass Instructions was publicly available and thus a trade secret, the
Court finds that the greater harm would occur from excluding the evidence. Accordingly, this
factor favors Revolution.
D. Revolution’s Explanation for the Late Disclosure
Revolution explains that its late disclosure was caused by Equity’s own late disclosure.
(ECF No. 109, PageID 2933.) Revolution claims it proffered the Encompass Examples as
rebuttal evidence after Equity disclosed for the first time in its motion for summary judgment
that the Encompass Instructions were entitled to trade secret protection. (Id. at PageID 2934.)
Revolution focused on preparing defenses to the 32 identified trade secrets in Equity’s
supplemental response to Revolution’s Interrogatories, which did not include the Encompass
Instructions. (Id. at PageID 2937.) According to Revolution, it did not begin preparing defenses
regarding the Encompass Instructions until after Equity disclosed the instructions were entitled to
trade secrets protections. (Id.)
After considering Revolution’s explanation, the Court finds that Revolution’s tardy
disclosure was not the product of “underhanded gamesmanship that warrants the harsh remedy of
exclusion.” Bisig v. Time Warner Cable, Inc., 940 F.3d 205, 219 (6th Cir. 2019) (citations
omitted). While Equity only recently learned of the specific internet examples Revolution
intended to introduce at trial, Equity knew from Revolution’s motion for summary judgment and
April Roberts deposition testimony that Revolution would argue the information was publicly
available on the internet. Therefore, Equity’s surprise is limited and can be cured through cross-
examination. After balancing the five factors above, Equity’s motion to exclude the Encompass
Examples (ECF No. 106) is DENIED.
CONCLUSION
For the reasons above, the Court orders:
• Revolution’s Motion in Limine to Exclude the Opinion and Expert Testimony of
Edwin Rizor (ECF No. 102) is GRANTED in part and DENIED in part.
• Revolution’s Motion in Limine to Exclude Evidence of Lost Profits (ECF No. 97)
is DENIED.
• Revolution’s Motion in Limine to Preclude Equity from Claiming Certain Trade
Secrets at Trial (ECF No. 98) is DENIED as moot. Revolution’s Amended
Motion (ECF No. 101) is DENIED.
• Revolution’s Motion to Exclude the Trial Testimony of Tom Piecenski (ECF No.
103) is DENIED.
• Equity’s Motion to Exclude Deposition Testimony Related to Daniel Walker
(ECF No. 105) is DENIED.
• Equity’s Motion to Exclude Examples of Encompass Instructions Published on
the Internet (ECF No. 106) is also DENIED.
The case remains open.
IT IS SO ORDERED.
3/8/2024 s/Edmund A. Sargus, Jr.
DATE EDMUND A. SARGUS, JR.
UNITED STATES DISTRICT JUDGE