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Single Source, Inc. v. Harvey

December 3, 2008

SINGLE SOURCE, INC., PLAINTIFF,
v.
ARLIS HARVEY AND FOOD MARKETING CONCEPTS, INC., DEFENDANTS.



The opinion of the court was delivered by: Samuel Der-yeghiayan, District Judge

MEMORANDUM OPINION

This matter is before the court on Defendant Arlis Harvey's ("Harvey") and Defendant Food Marketing Concepts, Inc.'s ("FMC") motions in limine. For the reasons stated below, we grant in part and deny in part the motions in limine.

BACKGROUND

Plaintiff Single Source, Inc. ("SSI") alleges that in 1998 it hired Harvey to assist SSI in the expansion of its business and customer base in Texas and other areas. In 2000, Harvey was allegedly promoted to a Sales Director position and Harvey executed a confidentiality agreement ("Agreement"). SSI contends that Harvey promised in the Agreement to keep confidential all of SSI's trade secrets and to use them solely for the benefit of SSI.

Harvey allegedly became disgruntled in 2005, because another salesman was making more money than Harvey. Beginning in late 2005, Harvey, while continuing to work for SSI, allegedly assisted in the formation and outfitting of FMC. While assisting in the formation of FMC, Harvey also allegedly referred customers of SSI to FMC, solicited sales for FMC from SSI's customers, and used his SSI expense account to pursue customers for FMC. Harvey also allegedly used trade secret information obtained from SSI when assisting in the formation of FMC. In addition, Harvey allegedly disparaged SSI when speaking to customers of SSI, allegedly causing the customers to give their business to FMC. SSI brought the instant action and includes in its second amended complaint a breach of fiduciary duty claim brought against Harvey (Count I), and tortious interference with prospective economic advantage claims brought against Harvey and FMC (Count II). Defendants moved for summary judgment on all claims and we denied the motion. Defendants have now filed motions in limine.

DISCUSSION

I. Sales from Food Marketing Concepts, LLC

Defendants move to bar evidence relating to sales from Food Marketing Concepts, LLC ("FMC LLC"). Defendants argue that SSI alleges only that Defendants are subject to liability due to sales from FMC to Mid-America Services ("Mid-America"). Defendants contend that FMC LLC is a separate legal entity from FMC, and move to bar any evidence relating to FMC LLC since it is not a party in this action. While SSI contends that sales from FMC are relevant, SSI does not contest Defendants' assertion that FMC LLC is a separate legal entity and SSI has not shown that sales relating to FMC LLC would be relevant. Therefore, we grant Defendants' motion to bar evidence relating to sales from FMC LLC.

II. Bankruptcy of Gary Schwartz

Defendants argue that the court should exclude evidence that Gary Schwartz ("Schwartz"), one of the owners of FMC, previously filed for bankruptcy. Defendants contend that such evidence is irrelevant and overly prejudicial. However, SSI provides a valid basis for the introduction of such evidence. SSI contends that it will introduce such evidence if Defendants open the door by arguing that Schwartz was an individual with substantial expertise, and prior success in the correctional food service industry. Defendants have not shown that the admission of evidence relating to Schwartz's bankruptcy would be overly prejudicial. Therefore, we deny Defendants' motion to bar evidence relating to Schwartz's prior bankruptcy in the event that the Defendants open the door. Defendants also raise potential objections in their reply brief to certain evidence relating to Mid America's and Mid-States Services' ("Mid-States") reliance on Schwartz's expertise. However, such objections are improperly raised in a reply brief and therefore are denied.

III. Usage of Another Company's Baking Mixes

Defendants move to bar evidence that would show that Schwartz was previously accused of using another company's bake mixes. Defendants argue that such evidence is hearsay, irrelevant, would be overly prejudicial, and would be inadmissible under Federal Rule of Evidence 404(b). However, SSI has pointed to a valid basis to introduce such evidence. For example, SSI had indicated that it intends to introduce such evidence to prove that Schwartz had little or no ability to generate business on behalf of FMC because his reputation in the industry was badly tarnished. Defendants have not shown such evidence to be overly prejudicial. To the extent that Defendants may believe any specific portion of the evidence is hearsay, such objections can properly be raised at trial. Therefore, we deny Defendants' motion to bar evidence that would show that Schwartz was previously accused of using another company's bake mixes.

IV. Failure to Produce Evidence During Discovery

Defendants move to bar any evidence indicating that Defendants failed to produce some evidence during discovery. SSI opposes the motion, arguing that "the fact that the defendants failed to produce the records relating to FMC's early business activities is circumstantial proof that those activities were neither innocent nor insubstantial, as the defendants claim." (Ans. 6). While it is true that at trial FMC can argue that Defendants' case is weak due to the lack of evidence that Defendants have presented at trial, that is a separate issue from production during discovery. If SSI believed that it was not provided needed discovery it should have filed a proper and timely motion to compel during the discovery period. Therefore, we grant Defendants' motion to bar any evidence indicating that Defendants failed to produce some evidence during discovery. We note that in response to ...


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