United States District Court, D. Oregon
Danelle Snyder and Holly Lloyd, Law Offices of Judy Snyder,
OR 97205. Of Attorneys for Plaintiffs Westerlund Log Handlers
LLC and David Westerlund.
Matthew J. Kalmanson, Gordon L. Welborn, and Jason R. Poss,
Hart Wagner LLP, OR 97205. Of Attorneys for Defendants
Michael J. Esler, Kim T. Buckley, and Esler Stephens &
OPINION AND ORDER
Michael H. Simon United States District Judge.
are Westerlund Log Handlers, LLC (“WLH”) and
David Westerlund (“Westerlund”). Westerlund owns
60 percent of WLH. Roger Nance (“Nance”), who
originally also was a plaintiff in this lawsuit, owns the
remaining 40 percent of WLH. ECF 1 at ¶ 3.(WLH, Westerlund,
and Nance are collectively referred to as the
“Westerlund Group.”) Defendants are attorney
Michael J. Esler (“Esler”) and the law firm of
Esler, Stephens & Buckley, LLP (“ESB”).
Plaintiffs allege claims of legal malpractice and breach of
fiduciary duty, premised on the alleged existence of an
attorney-client relationship between Plaintiffs and
Defendants. Defendants deny the existence of an
attorney-client relationship with Plaintiffs. On January 29,
2018, the Court granted in part and denied in part
Defendants' motion for summary judgment. ECF 90. A jury
trial is scheduled to begin February 3, 2020.
Rules 26(a)(2)(B), 26(e), 37(b), and 37(c) of the Federal
Rules of Civil Procedure, Defendants have moved to strike the
following expert reports (or portions thereof) disclosed by
Plaintiffs: (1) Wm. Randolph Turnbow's expert report
dated January 4, 2019; (2) Michael Greene's initial
expert report dated January 2, 2019 and supplemental expert
report dated February 11, 2019; and (3) all references in
William V. Mason II's expert report dated January 3, 2019
to an undated multi-million dollar offer supposedly made to
Plaintiffs to purchase a 50 percent interest in WLH. For the
reasons that follow, the Court grants the motion in part and
denies it in part.
and Nance formed WLH in 2009. In 2013, WLH was providing log
handling services for China National Building Materials
Import and Export Corporation (“CNBC”). At
various timed in 2013, Nance and Westerlund met with Dennis
J. Murphy, Sr. (“Murphy”) and other
representatives of Murphy Overseas U.S.A. Timber and Land
Development, LLC and Murphy Overseas U.S.A. Holdings, LLC
(collectively, “the Murphy Group”). During some of
these meetings, Westerlund and Nance discussed with the
Murphy Group the possibility of working together.
December 2013, Westerlund and Nance met with members of the
Murphy Group at the office of the Murphy Group's
accountant, Craig Vagt. Attorney Esler attended the meeting.
According to Esler, he and his law firm, ESB, represented
only the Murphy Group at this meeting. The attendees
discussed and reviewed several documents relating to
WLH's business operation and its contracts with CNBC.
According to Plaintiffs, the meeting lasted several hours,
during which the Westerlund Group, on the one hand, and the
Murphy Group, on the other, agreed to form a joint venture
sometime in the future. The joint venture would involve the
creation of a new company, ownership of which would be split
between the Westerlund Group and the Murphy Group. According
to Plaintiffs, the Murphy Group would own 70 percent of the
new company to be formed because it would be paying all legal
costs and investing money in the new venture, and the
Westerlund Group would own the remaining 30 percent of the
the late December meeting, the Westerlund Group believed that
WLH's log handling agreement with CNBC required an
exclusive relationship between WLH and CNBC. (The written
contract between WLH and CNBC was one of the documents
reviewed and discussed at the late December meeting.) The
Westerlund Group believed that WLH owed a duty to CNBC to
“stick it out” during the duration of that
agreement. According to Plaintiffs, however, Esler told the
attendees the meeting that if the Murphy Group decided to do
business with WLH, the Murphy Group could
“coexist” with CNBC as a customer of WLH. Also
according to Plaintiffs, Esler said that WLH could work with
both CNBC and the Murphy Group. In addition, while Esler was
out of the room, an officer of the Murphy Group reiterated to
the Westerlund Group that “our lawyer” thinks
that WLH's contract with CNBC is not exclusive.
this meeting, Esler stated that the WLH agreement with CNBC
was unfavorable to WLH and that before the Murphy Group and
the Westerlund Group could work together on the future joint
venture under discussion, WLH needed to
“disentangle” itself from its contract with CNBC.
There was no explicit discussion during this meeting of who
Esler or the ESB law firm represented. Plaintiffs assert that
they believed that Esler was representing the interests of
the anticipated future joint venture that was under
discussion, while also orchestrating a plan to help get WLH
disentangled from CNBC to further the interests of that
contemplated future partnership. According to Plaintiffs,
Esler explained that he did not want a formal or written
agreement regarding the anticipated joint venture prepared at
this time because that might later be used by CNBC to support
a claim that the Murphy Group was tortiously interfering with
the business relationship between WLH and CNBC.
the meeting in late December and January 13, 2014, Esler
drafted an agreement that ultimately became the written Log
Handling Agreement (“LHA”) between the Westerlund
Group and the Murphy Group. The LHA was signed on January 13,
2014. The LHA expressly states:
It is not the intent of the parties to create a partnership
or joint venture hereunder and no party to this Agreement
shall contend to the contrary. No. party shall hold himself
or itself out to any person as the agent of-the other with
authority to bind the other.
LHA at ¶ 10.
point in January, Nance asked Esler whether Esler would be
representing WLH in its dispute with CNBC. Esler told Nance
that he would not, but that he would “hire
someone” to represent WLH in that matter. On
approximately January 12, Esler spoke with attorney Gordon
Carey about representing WLH.
January 15, 2014, WLH terminated its contract with CNBC. In
late January or early February 2014, Esler contacted attorney
Richard Miller about also representing WLH. According to
Plaintiffs, Esler hired Miller to represent WLH as their
business or transactional lawyer, while Carey would represent
WLH in its dispute with CNBC. Esler told Miller that Esler
represented the Murphy Group, that WLH would be Miller's
client, and that the Murphy Group would pay Miller's
legal bills for work done by Miller for WLH.
February 17, Miller spoke with Carey about WLH. Carey states
that he told Miller that the lawsuit regarding the CNBC
contract with WLH was filed to help both the Westerlund Group
and the Murphy Group become free from the limitations in the
WLH contract with CNBC. In November 2014, the Murphy Group
paid $2.55 million to CNBC to settle all claims by and
against CNBC, including claims asserted by CNBC against WLH.
role of an expert is to “help the trier of fact to
understand the evidence or to determine a fact in
issue.” Fed.R.Evid. 702. In other words, an expert
should “address an issue beyond the common knowledge of
the average layman.” Mukhtar v. Cal. State Univ.,
Hayward, 299 F.3d 1053, 1065 n.9 (9th Cir. 2002). An
expert opinion on an ultimate issue of fact may be
admissible. Fed.R.Evid. 704(a) (“An opinion is not
objectionable just because it embraces an ultimate
issue.”). But an expert witness may not opine about a
legal conclusion, including an ultimate issue of
law. Hangarter v. Provident Life and Acc. Ins.
Co., 373 F.3d 998, 1016 (9th Cir. 2004). In addition, an
expert witness may not instruct the jury about the applicable
law. Nationwide Transp. Fin. v. Cass Info. Sys.,
Inc., 523 F.3d 1051, 1058 (9th Cir. 2008).
Turnbow Expert Report
argue that the entirety of the Turnbow expert report should
be stricken. Defendants acknowledge that there “are
some appropriate opinions in his report” that they do
not challenge, but they argue that these opinions are
“so intertwined with the report's numerous flaws
that the report must be stricken in its entirety.” ECF
102. The Court addresses the various defects in the Turnbow
report alleged by Defendants.