United States District Court, N.D. Oklahoma
SFF-TIR, LLC; STUART FAMILY FOUNDATION, INC.; ALAN STUART 2012 GST FAMILY TRUST; STUART 2005 GST FAMILY TRUST; CELEBRATION, LLC; ANURAG AGARWAL; PETER BUCKLEY; VINCENT SIGNORELLO and RODNEY M. REYNOLDS, Plaintiffs,
CHARLES C. STEPHENSON, JR.; CYNTHIA A. FIELD; PETER BOYLAN, III; LAWERENCE FIELD; CYPRESS ENERGY PARTNERS-TIR, LLC; CEP CAPITAL PARTNERS, LLC; CYPRESS ENERGY HOLDINGS, LLC and TULSA INSPECTION RESOURCES, LLC, Defendants.
Jamison A. Diehl Akin Gump Strauss Hauer & Feld LLP New
York, New York and R. Stratton Taylor Toney Daniel Foster
Mark H. Ramsey Clinton Derek Russell Jacob Riley Daniel
Taylor, Foster, Mallett, Downs, Ramsey & Russell
Claremore, Oklahoma and Stuart Kagen Joshua C. Gillette
Daniel A. Cohen Kyla Janine Grant Kagen & Caspersen New
York, New York Attorneys for the Plaintiffs.
Frederic Dorwart Paul DeMuro Sarah Wishard Poston John Daniel
Clayman Nora Rose O'Neill Fredric Dorwart Lawyers Tulsa,
Oklahoma Attorneys for the Defendants.
MEMORANDUM OPINION AND ORDER
MATTER comes before the Court on the Defendants'
Objection to Court's First Proposed Jury Instructions,
Doc. 339, filed August 10, 2017 (Doc.
348)(“Objections”). A hearing was held on August
15, 2017. The primary issues are whether Instruction No. 17
of the Court's Second Proposed Jury Instructions, filed
August 29, 2017 (Doc. 374)(“Jury
Instructions”) should instruct the jury, in proposed
Instruction No. 17, that: (i) “The credibility of
projections prepared by management is enhanced if the
projections were submitted by management to same [sic]
financial institutions. . . . That is because it is a federal
felony to knowingly obtain any funds from a financial
institution by false or fraudulent pretenses or
representations”; and (ii) “You may completely
discount an expert valuation that disregards contemporaneous
management projections.” Jury Instructions at 23.
Defendants object to these statements. See
Objections at 4 (objecting to an instruction permitting the
jury to completely discount an expert's testimony);
Transcript of Telephonic Hearing Proceedings Before the Court
at 48:10-17 (taken August 15, 2017), filed August 21, 2017
(Doc. 358)(“Tr.”)(objecting to a statement
regarding the credibility of projections that have been
submitted to a financial institution). They argue that those
instructions are not appropriate in light of the evidence.
See Objections at 4 (indicating that the Court's
proposed Instruction No. 17 is “contrary to the law,
” because it is “improper to give an instruction
where there is insufficient evidence in the record supporting
its submission to the jury”); Tr. at 49:20-50:2
(“[I]f Your Honor gives an instruction that says
something to the effect that management projections are
enhanced if they're given to a financial institution, and
there is no evidence at trial . . . that the management
projections were submitted to a financial institution . . .
then that would create error.”).
Defendants object to the inclusion of the fourth paragraph of
proposed Instruction No. 17 -- instructing the jury regarding
the federal bank-fraud statute, 18 U.S.C. § 1344
--because the Defendants believe that there may be no
evidence at trial that management projections were submitted
to a “financial institution, ” as 18 U.S.C.
§ 20 defines that term. See Tr. at 48:10-50:14.
Consequently, according to the Defendants, the Court should
wait and see what evidence is introduced at trial before
deciding whether to include an instruction regarding the
federal bank fraud statute. See Tr. at 50:5-14. The
Court will, however, continue to include the fourth paragraph
for now and delete it if there is no trial evidence raising
the bank-fraud issue. It is easier to remove language than to
Defendants object to the last sentence in the fifth paragraph
of proposed Instruction No. 17 -- instructing the jury that
they may completely discount the testimony of an expert that
disregards contemporaneous management projections -- because,
according to the Defendants, the Court determined that their
expert did not “disregard” such projections.
Objections at 4. More precisely, the Court concluded that the
Defendants' expert “considered TIR management
revenue and expense projections when compiling data for
his discounted cash flow model, even though he largely
rejected these projections as flawed when he ran his
algorithm.” Objections at 4 (emphasis added by the
Defendants)(quoting Order at 3, filed March 31, 2017 (Doc.
262)). The Defendants cite no authority indicating that there
is a meaningful difference between “disregarding”
projections and “considering and rejecting”
projections, and there is no such difference. Consequently,
the Court will retain the last sentence of the fifth
paragraph of proposed Instruction No. 17, which permits but
does not require the jury to discount expert testimony that
disregards contemporaneous management projections.
IS ORDERED that the Defendants' Objection to
Court's First Proposed Jury Instructions, Doc. 339, filed
August 10, 2017 (Doc. 348), is overruled insofar as it
objects to proposed Instruction No. 17.
The Objections refer to the Court's
First Proposed Jury Instructions, filed August 9, 2017 (Doc.
339), but both sets of jury instructions contain the language