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Laurel Gardens, LLC v. McKenna

United States District Court, E.D. Pennsylvania

December 4, 2019

LAUREL GARDENS, LLC, et al., Plaintiffs,
v.
TIMOTHY MCKENNA, et al., Defendants.

          MEMORANDUM

          SCHMEHL, J.

         Following hearsay objections from Saul Ewing Arnstein & Lehr, LLP, John Snyder, and David Falcone (collectively, the “Saul Defendants”), Plaintiffs submitted to this Court two Motions in Limine. These Motions seek to admit evidence of Plaintiffs' allegations that the Saul Defendants committed mail and wire fraud, conspiring with other defendants (namely, Tim McKenna) to “divest LG and AWS of their customers. . .” (ECF Docket No. 276, at 10) To support these claims, Plaintiffs seek to admit into evidence (1) a revised affidavit and the anticipated trial testimony of Matthew Sibley, a former defendant in this matter; and (2) two emails from Catharine McKenna to Sharon Simmons. (ECF Docket No. 276-77)

         Plaintiffs assert that this evidence is admissible and relevant to the resolution of the Saul Defendants' Motion for Summary Judgment. (ECF Docket No. 258) The Saul Defendants moved for summary judgment on April 8, 2019, contending that Plaintiff's claims against them were time-barred and that Plaintiffs failed to establish RICO predicate acts committed by any of the Saul Defendants. (ECF Docket No. 258, at 1) The Saul Defendants have also opposed the present motions in limine, arguing that (1) neither hearsay statement presents a dispute of material fact; and (2) even if the disputed facts are material, Plaintiff's proffered hearsay statements are inadmissible under the Federal Rules of Evidence. (ECF Docket No. 278) As detailed below, we agree with the Saul Defendants. The hearsay evidence Plaintiffs seek to introduce is inadmissible in the present matter.

         I. STANDARD OF REVIEW

         Hearsay evidence is inadmissible unless provided for by federal statute, the Federal Rules of Evidence, or rules prescribed by the Supreme Court. Fed.R.Evid. 802. The Federal Rules of Evidence define hearsay as a statement that (1) a declarant does not make while testifying at the current trial or hearing and (2) a party offers in evidence to prove the truth of the matter asserted in the statement. Fed.R.Evid. 801(c). Such hearsay statements may be considered on a motion for summary judgment “if they are capable of being admissible at trial.” FOP v. City of Camden, 842 F.3d 231, 238 (3d Cir. 2016) (citing Stelwagon Mfg. Co. v. Tarmac Roofing Sys., 63 F.3d 1267, 1275 n.17 (3d Cir. 1995)). However, to admit evidence containing multiple levels of hearsay, each part of the combined statements must conform with an exception to the hearsay rules. Fed R. Evid. 805.

         II. MOTION IN LIMINE NO. 1 TO ADMIT THE REVISED AFFIDAVIT AND TRIAL TESTIMONY OF MATTHEW SIBLEY

         a. Tim McKenna's Statement to Matthew Sibley is Inadmissible Hearsay

         Plaintiffs seek to admit Tim McKenna's hearsay statement to Matthew Sibley in the form of Mr. Sibley's affidavit and anticipated trial testimony. (ECF Docket No. 276) In support of admission, Plaintiffs argue that the affidavit and anticipated testimony are admissible under three exceptions to the rule against admitting hearsay evidence. (Id.) None of these exceptions support admission.

         i. Mr. McKenna's Statements to Mr. Sibley are Inadmissible as Statements of an Alleged Coconspirator

         Plaintiffs first assert that Mr. McKenna's statements to Mr. Sibley are admissible because the hearsay statements were “made by the party's coconspirator during and in furtherance of [a] conspiracy.” Fed.R.Evid. 801(d)(2)(E). To establish evidence as admissible under this “conspiracy” exception, the proponent “must prove by a preponderance of the evidence that: (1) a conspiracy existed; (2) the declarant and the party against whom the statement is offered were members of the conspiracy; (3) the statement was made in the course of the conspiracy; and (4) the statement was made in furtherance of the conspiracy.” United States v. Turner, 718 F.3d 226, 231 (3d Cir. 2013) (citing United States v. Ellis, 156 F.3d 493, 496 (3d Cir. 1998)). The court may consider the content of such statements; however, the statements must be “corroborated by independent evidence.” Id. (citing Bourjaily v. United States, 483 U.S. 171, 181 (1987)); see also Fed. R. Evid. 801(d)(2) (“[t]he statement must be considered but does not by itself establish . . . the existence of the conspiracy or participation in it under (E).”).

         As corroborating proof of the alleged conspiracy and the Saul Defendants' involvement therein, Plaintiffs offer three pieces of evidence. First, Plaintiffs claim that Catharine McKenna's emails to Sharon Simmons present information “consistent with the fact that Falcone was working with Tim McKenna in the formation of MAT in April 2014 and beyond.”[1] (ECF Docket No. 279, at 11) The emails between Ms. McKenna and Ms. Simmons, however, are only “consistent” with Plaintiffs' theory to the extent that they do not directly contradict that theory. These emails do not affirmatively support the proposition that Mr. Falcone worked with Mr. McKenna to form MAT. In fact, in her email Ms. Simmons makes clear to Ms. McKenna that she was “not familiar with any of the persons or documents referenced in [Ms. McKenna's] email.” (ECF Docket No. 268, Ex. 11)

         Second, Plaintiffs allege a “quid pro quo” in which “Falcone received a significant volume of landscaping services by LG . . . [and] was not billed for these services because Tim McKenna was manipulating the billing so that Falcone would not be billed.” (ECF Docket No. 276, at 11, 13) Plaintiffs have not offered any evidence to prove this. Further, this allegation is directly refuted by Plaintiff Gaudioso's own deposition. (ECF Docket No. 278, Ex. E)

         Third, Plaintiffs claim that Defendant Snyder advised Tim McKenna “not to execute a consulting agreement with his client, LGH, because it contained a non-compete clause . . . [and that this] demonstrates that Snyder was part of the conspiracy.”[2] (ECF Docket No. 267, at 15) This allegation alone is insufficient to show the existence of a conspiracy and Mr. Snyder's involvement therein. Even if Mr. Snyder advised Mr. McKenna not to sign a non-compete agreement, that fact alone is clearly not dispositive evidence of Mr. Snyder's membership in a conspiracy to defraud Plaintiffs. As such, Plaintiffs fail to independently corroborate the existence of a conspiracy involving the Saul Defendants. Thus, this hearsay exception does not apply.

         ii. Mr. McKenna's Statements to Mr. Sibley Are Not Admissible as Evidence of Mr. McKenna's Then-Existing ...


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