JAY MANNINO MICHELLE MANNINO JFM LLC v. MCKEE AUTO CENTER INC ANTHONY MCKEE JOHN MCKEE (2024)

ORDER ON PRETRIAL MOTIONS

Plaintiffs Jay Mannino, Michelle Mannino, and JFM, LLC, initiated this action bringing common law claims for fraud and unjust enrichment, as well as a violation of the Iowa Consumer Fraud Act, against Defendants McKee Auto Center, Inc., Anthony McKee, and Jon McKee arising out of the sale of a $1,750,000.00 RV. Specifically, Plaintiffs allege that Defendants fraudulently induced them to purchase the RV by making false and misleading representations about the vehicle's history and existing condition. The Court previously granted Defendants' partial motion for summary judgment, dismissing the Consumer Frauds Act claim. [ECF No. 32]. Plaintiffs' fraud and unjust enrichment claims are set for a jury trial on October 28, 2024. Both parties have filed Motions in Limine asking the Court for preliminary rulings on a variety of evidentiary issues. [ECF Nos. 35, 36].

I. MOTIONS IN LIMINE

A. Legal Standard

The Federal Rules of Evidence require that inadmissible evidence should not be introduced in a jury trial or even suggested to the jury “to the extent practicable.” Fed. R. Evid. 103(d). A motion in limine is “any motion, whether made before or during trial, to exclude anticipated prejudicial evidence before the evidence is actually offered.” Luce v. United States, 469 U.S. 38, 40 n.2 (1984). “[M]otions in limine may be used to exclude inadmissible or prejudicial evidence ․ before trial.” Mahaska Bottling Co., Inc. v. PepsiCo, Inc., No. 4:16-cv-00114-JEG-SBJ, 2019 WL 12529179, at *2 (S.D. Iowa May 29, 2019). A district court has broad discretion to exclude evidence on a motion in limine. See United States v. Jirak, 728 F.3d 806, 813 (8th Cir. 2013). Any ruling on a motion in limine is subject to change as the case unfolds. Luce, 469 U.S. at 41.

B. Analysis

1. Settlement Negotiations

Plaintiffs and Defendants both move the Court to exclude any mention of settlement negotiations during trial. Such evidence is irrelevant to the issues at trial under Rule 402 and inadmissible pursuant to Rule 408. The parties agree that presenting evidence of settlement negotiations would be improper. Fed. R. Evid. 402, 408. However, Plaintiffs contend that they should be permitted to disclose to the jury that Defendants were unwilling to engage in settlement negotiations until four weeks before trial. They argue that this evidence of a refusal to settle does not fall under the scope of Rule 408 because it is not offered to prove the validity or amount of the claims at issue.

First, there is an exception to the general rule that evidence from settlement negotiations is inadmissible if “the evidence is offered for another purpose, such as proving bias or prejudice of a witness, negativing a contention of undue delay, or proving an effort to obstruct a criminal investigation or prosecution.” Athey v. Farmers Ins. Exch., 234 F.3d 357, 362 (8th Cir. 2000) (quoting Fed. R. Evid. 408). Plaintiffs have not identified any such purpose for this evidence.

Even presuming that Rule 408 does not encompass the failure to engage in settlement negotiations, Plaintiff must still establish the relevancy of this evidence. Fed. R. Evid. 402. Defendants' failure to participate in settlement negotiations does not make any fact in question more or less probable. See Fed. R. Evid. 401. Second, disclosing to the jury that Defendants did not participate in such negotiations until four weeks before trial necessarily informs the jury that the parties have engaged in settlement negotiations. This evidence clearly goes to the validity of Plaintiffs' claims and the prohibition of such evidence is a primary purpose of Rule 408. Therefore, Defendants' motion to exclude any evidence or discussion of settlement negotiations or the lack thereof is GRANTED.

2. Improper Motives in Bringing Claims, Prior Lawsuits and Attorney Fees

Plaintiffs move for the exclusion of evidence or argument regarding the litigation history of their attorneys, greed as a motivation for bringing this lawsuit, and the matter of attorney's fees. However, they argue they should be permitted to introduce evidence and argument of other lawsuits that have been brought against Defendants as evidence of habit and their character for untruthfulness.

First, any evidence of, or comments on, the litigation history of Plaintiffs' counsel, including past representation of the same Plaintiffs does not weigh on any material facts relating to this case. Fed. R. Evid. 402. Next, Plaintiffs assert that the existence of previous cases against Defendants is habit evidence which can be used to show Defendants' propensity for making misrepresentations to customers. The advisory committee notes to Rule 406 clarify that a habit “is the person's regular practice of meeting a particular kind of situation with a specific type of conduct,” and that such acts may become semi-automatic. Fed. R. Evid. 406 advisory committee's note to 1972 proposed rule. Habitual behavior by a group is the “routine practice of an organization” encompassed within the scope of the rule. Id. The fact that other individuals have sued Defendants does not establish anything about Defendants' conduct and therefore cannot constitute evidence of habit or a routine practice.

Additionally, Plaintiffs have provided no information about the outcome of those cases to substantiate that they would be probative of Defendants' character for truthfulness or untruthfulness. However, even presuming they do hold some probative value in that regard, evidence of prior lawsuits would present a substantial danger of unfair prejudice and confusing the issues. See Fed. R. Evid. 403. Therefore, evidence or argument regarding prior lawsuits, or the litigation history of the parties and attorneys is irrelevant and inadmissible at trial. Fed. R. Evid. 401, 402.

Second, the danger of unfair prejudice from comments or argument about “greedy lawyers” or plaintiffs being “greedy” substantially outweighs any probative value such comments could have. Fed R. Evid. 403. To the extent that Plaintiffs' motivation is relevant at all, these derogatory comments would be unfairly prejudicial. See Walker v. Kane, 885 F.3d 535, 540 (8th Cir. 2018) (explaining that unfair prejudice is an undue tendency to make a decision on an improper basis).

Third, the parties both move the Court to exclude evidence and argument regarding attorney's fees. Again, Plaintiffs seek a caveat to permit them to tell the jury that they have had to pay their own attorney's fees, arguing that it is relevant to Plaintiffs' motives in pursuing the claims and to whether Defendants made a false statement. This is unconvincing. Plaintiffs' motivation is not an element of any remaining legal claim. Additionally, they do not explain how attorney's fees are in any way tied to whether Defendants made a false statement. See Fed R. Evid. 402. The parties agree that Plaintiffs' only legal avenue for the pursuit of attorney's fees is common law attorney fees. “[T]he determination of an attorney fee award lies within the equitable power of the court” and “the court should not delegate its equitable power to the jury.” Hockenberg Equip. Co. v. Hockenberg's Equip. & Supply Co. of Des Moines, 510 N.W.2d 153, 159 (Iowa 1993); see also UE Loc. 893/IUP v. State, 997 N.W.2d 1, 15 (Iowa 2023) (describing a common law attorney fee award as “rare” and recognizing the district court's authority to award them in appropriate cases). Accordingly, such evidence and argument shall be excluded at trial.

Plaintiffs' motion to exclude evidence of legal history and “greed” as a motivation is GRANTED. Defendants' motion to exclude evidence regarding attorney's fees and prior lawsuits is GRANTED.

3. Undisclosed Expert Opinions

Plaintiffs assert that Defendants did not properly disclose their experts pursuant to the Federal Rules of Civil Procedure. Rule 26(a)(2) requires that parties disclose the subject matter of the expert testimony that will be provided as well as “a summary of the facts and opinions to which the witness is expected to testify.” Fed. R. Civ. P. 26(a)(2). The expert disclosures provided by Defendants identified the subject matter of both witnesses' testimony, including the condition and sale of the RV in this case, general maintenance information about RVs, comparisons between new and used RVs, and criticisms of Plaintiffs' expert Thomas Bailey's report. Defendants also indicated that Anthony McKee would testify about the value of Prevost RVS and Liberty Prevost RVs. Notably, they do not provide a summary of the facts and opinions that either witness is anticipated to testify to at trial. The Court agrees with Plaintiffs that these were not complete disclosures as required under the rules. Fed. R. Civ. P. 37(a)(4). The parties proceeded to depositions of Defendants' witnesses at which time they supplemented their incomplete disclosures with the witnesses' testimony. Defendants agree that the witnesses' testimony should be limited to the items contained in the disclosures and topics discussed at depositions.

Plaintiffs do not specifically identify testimony by Defendants' witnesses which should be excluded. They state that they “are still concerned that Defendants will attempt to elicit additional expert opinions” not disclosed. However, Plaintiffs' brief does not identify for the Court what should be excluded. Plaintiffs may raise their objection at trial if they believe Defendants are eliciting undisclosed opinions from their expert witnesses. The Court will determine, based on the testimony actually offered, whether it exceeds the scope of disclosure and should be excluded. Fed. R. Civ. P. 37(c)(1). Accordingly, Plaintiffs' motion to exclude undisclosed expert opinions is DEFERRED.

4. Undisclosed Witnesses and Trial Exhibits

Plaintiff asks the Court to exclude exhibits and witnesses not properly disclosed under the Local and Federal Rules because they “have reason to believe that one or more Defendants may attempt to introduce an exhibit or witness that was not disclosed” by the deadline. Again, Plaintiffs do not indicate what or who this inadmissible evidence is so the Court cannot determine its admissibility. Plaintiffs should object to undisclosed exhibits or witnesses if they should be offered at trial. Plaintiffs' motion to exclude undisclosed witnesses and trial exhibits is DEFERRED.

5. Dismissed Claim

Both Plaintiffs and Defendants move for the exclusion of evidence relating to the dismissed consumer fraud claims in this case. These claims were dismissed by the Court on Defendants' motion for partial summary judgment. [ECF No. 32]. As such, any evidence or argument to establish these claims would be irrelevant to the issues presented at trial. Fed. R. Evid. 401. Evidence and argument relating to “consumer fraud” or the consumer fraud claims shall be excluded at trial. This ruling does not prohibit Plaintiff from presenting evidence to establish their surviving claims. Plaintiffs' and Defendants' motions for exclusion of evidence on consumer fraud claims are GRANTED.

6. Thomas Bailey's 30-Year-Old Criminal Convictions

Plaintiffs seek to exclude evidence of their expert's criminal convictions at trial. Bailey was convicted 30 years ago of mail fraud, operating a firearms business without a license, possession of a machine gun, possession of flash-bang grenades, making a false statement to a grand jury, and obstructing an official investigation. Defendants argue that because the credibility of Bailey will be a central issue in the case and his convictions are incredibly probative of his character for truthfulness, so they should be admitted. Federal Rule of Evidence 609 makes clear that while crimes of fraud or dishonesty may ordinarily be used for impeachment purposes at trial, convictions older than ten years are held to a higher standard. Such a conviction is only admissible if its probative value substantially outweighs its prejudicial effect and the party seeking admission of the conviction provides reasonable written notice to the adverse party of the intent to use the conviction. Fed. R. Evid. 609(b).

Multiple courts have found that Bailey's convictions do not meet the high standard under Rule 609 for stale criminal convictions. [ECF Nos. 35-4; 35-5; 35-6; 35-7]. The Court agrees. Given the significant amount of time that has passed, the restoration of his civil rights, and his good standing since these convictions, this is not the very rare and exceptional circumstance which would warrant admission of an old conviction. See United States v. Smart, 60 F.4th 1084, 1092 (8th Cir. 2023) (stating that convictions older than 10 years “should be admitted very rarely and only in exceptional circumstances”). Plaintiffs' motion to exclude evidence or argument of Bailey's criminal convictions is GRANTED.

7. August 18, 2021 Opinion Letter of Dave Wall

Plaintiffs next seek the exclusion of a letter by Dave Wall dated August 18, 2021, which provides an estimated value of the RV later purchased by Plaintiffs. Plaintiffs assert that the letter is irrelevant, inadmissible expert opinion testimony, and that the letter was not timely disclosed. At this juncture, the Court cannot determine what, if any relevance, the value of the RV in 2021 would have on the issues to be presented at trial. Additionally, the letter is not expert testimony at all because it is simply a document. If Dave Wall were to attend trial and testify to the value of the RV in 2021, that would be expert testimony that must comply with rules of evidence. That being said, the letter itself is also an out of court statement which may not be offered for the truth of the matter asserted within it—that the RV was worth $2,195,000.00 on August 18, 2021. See Fed. R. Evid. 801. The letter itself and any mention of the contents of the letter would be inadmissible hearsay. Additionally, Defendants do not resist the exclusion of this document. Therefore, Plaintiffs' motion to exclude the 2021 letter is GRANTED.

8. Defendants' Hearsay Communications with Austin at Olympia RV

Plaintiffs move the Court to exclude any testimony concerning a conversation between Defendant John McKee and an Austin, who is apparently the owner of a different RV company. Any testimony from John McKee regarding out of court statements made by Austin would be hearsay if they were offered for the truth of the matter asserted. Fed. R. Evid. 801. Furthermore, statements made by “the Newell representative” to Austin, presented by John McKee, would be hearsay within hearsay. Id. Defendants do not resist Plaintiffs' motion. All such statements shall be excluded at trial. Plaintiffs' motion to exclude hearsay communications is GRANTED.

9. The Manninos's Issues or Disputes with Prior RVs

Finally, Plaintiffs seek exclusion of evidence relating to their prior RV purchases and issues they had with previous RVs. Plaintiffs assert that such evidence is irrelevant and even if it is relevant, should be excluded under Rules 404 and 403 as inadmissible character evidence and unduly prejudicial. Defendants respond that Plaintiffs' history and prior dealings when purchasing RVs and working with RV dealers is relevant to their intelligence and experience in this field. Specifically, this would establish whether Plaintiffs' reliance on Defendants' statements was reasonable. The Court sees potential relevance in this evidence, specifically as to whether Plaintiffs, “in view of [their] own information and intelligence, had a right to rely on the representations” made by Defendants. Lockard v. Carson, 287 N.W.2d 871, 878 (Iowa 1980).

To the extent that this would constitute other act evidence under Rule 404, it cannot be used to prove Plaintiffs' character and propensity for this behavior. Fed. R. Evid. 404(b)(1). However, it could be used for other purposes, such as to demonstrate their knowledge. Fed. R. Evid. 404(b)(2). Even so, the evidence should be excluded if the danger of unfair prejudice substantially outweighs its probative value. Fed. R. Evid. 403. Evidence of prior RV purchases by Plaintiffs that had issues or were not completed presents a substantial danger of unfair prejudice, confusing the issues, and undue delay. Id. Defendants can introduce evidence that Plaintiffs have prior experience purchasing RVs without discussing defects of prior purchases, conflicts with prior sellers, or the unwinding of transactions. Therefore, Defendants will be permitted to present evidence to establish Plaintiffs' familiarity with RVs and RV purchases generally, but may not discuss alleged defects or issues with prior transactions. Plaintiffs' Motion is GRANTED in part.

10. Send a Message Argument and Asking the Jurors to Take the Role of the Plaintiff

Defendants seek a ruling excluding argument by counsel that the jury send a message to the industry through their verdict or place themselves in the Plaintiffs' position. It is well established that “send a message” and “golden rule” arguments are improper. See Lawrey v. Good Samaritan Hosp., 751 F.3d 947, 954 (8th Cir. 2014) (citing Sinisterra v. United States, 600 F.3d 900, 910 (8th Cir. 2010); see also Lovett ex rel. Lovett v. Union Pac. R.R. Co., 201 F.3d 1074, 1083 (8th Cir. 2000). However, when punitive damages are sought and sufficiently established such that the issue is submitted to the jury, arguments that jurors “may consider punishment or deterrence ․ so as to punish the defendant or deter others from like conduct” are permissible. Vanskike v. ACF Indus., Inc., 665 F.2d 188, 210 (8th Cir. 1981) (citation omitted). Therefore, neither party may make “golden rule” arguments at trial. Plaintiffs shall be permitted to advance permissible “send a message” arguments should they present a sufficient case for punitive damages. Defendants' motion is GRANTED in part and DENIED in part.

11. Health of Jay Mannino

Defendants move for the exclusion of any argument or evidence relating to the health of Plaintiff Jay Mannino. Plaintiffs contend that evidence that Jay Mannino has Leukemia is relevant to their claims because it explains their purpose in purchasing the RV as well as their intended use for the vehicle. Specifically, Plaintiffs intend to present evidence that they purchased the RV to complete a bucket list trip following Jay Mannino's cancer diagnosis. While there is some limited relevance on this issue, specifically as to whether misrepresentations were made about the condition of the RV for its intended purpose, the fact that Jay Mannino has cancer is highly prejudicial as evidence to support a fraud claim. See Fed. R. Evid 403. Such information is likely to invoke sympathy and inflame the jury, diverting its attention from material issues and encouraging a decision on an improper basis. See United States v. Richardson, 40 F.4th 858, 867 (8th Cir. 2022) (citation omitted).

Moreover, Plaintiffs may present relevant evidence of their purpose for purchasing the RV and its intended use without discussing Jay Mannino's health. Specifically, Plaintiffs shall be permitted to present evidence and argument about purchasing the RV for their bucket list trip, without mentioning Jay Mannino's health or cancer diagnosis. Neither party shall present evidence, testimony, or argument of Mr. Mannino's health or health problems. Defendants' motion to exclude this evidence is GRANTED.

12. References to Alcohol during RV Breakdown and Anthony McKee's Alcoholism

Defendants ask the Court to exclude any argument or evidence that of Defendant Anthony McKee was intoxicated and subsequent arrested for OWI when the RV broke down on the side of the road prior to Plaintiffs' purchase of the vehicle. Additionally, they seek exclusion of any mention of his alcoholism. Plaintiffs argue that evidence of Anthony McKee operating the RV while intoxicated and his subsequent arrest is relevant to whether Defendants knew about the alleged defects with the RV. However, they do not contend that Anthony McKee caused this damage to the RV himself while driving it intoxicated, rather they assert that the damage was done to the RV when it was towed after his arrest. The reason that the vehicle was towed, whether because Anthony McKee was arrested or because it had broken down, has no bearing on what Defendants would have known about the damage inflicted from the tow itself. At this juncture, the Court finds no relevance in this evidence pertaining to either the fraud or unjust enrichment claims. Fed. R. Evid. 401, 402. Therefore, neither party may present evidence, testimony, or argument of Anthony McKee's drinking or intoxication when the RV broke down or his struggles with alcoholism. Defendants' motion to exclude this evidence is GRANTED.

IT IS SO ORDERED.

Dated this 15th day of October, 2024.

STEPHANIE M. ROSE, CHIEF JUDGE UNITED STATES DISTRICT COURT