Automatic Logistic v. UHY Advisors, Inc. ( 2007 )

NOT RECOMMENDED FOR PUBLICATION
FILE NAME: 07A 0563N .06
FILED : AUGUST 8, 2007
NO . 06-2387
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
AUTOMATIC LOGISTIC )
PRODUCTIVITY IMPROVEMENT )
SYSTEMS, L.L.C., )
)
Plaintiff-Appellant, )
) ON APPEAL FROM THE UNITED
V. ) STATES DISTRICT COURT FOR THE
) EASTERN DISTRICT OF MICHIGAN
UHY ADVISORS, INC., )
)
Defendant-Appellee. ) OPINION
Before: DAUGHTREY and GILMAN, Circuit Judges; and ADAMS, District Judge.*
RONALD LEE GILMAN, Circuit Judge. Automatic Logistic Productivity Improvement
Systems, L.L.C. (ALPIS), initiated a lawsuit in federal bankruptcy court in May of 2005 against
UHY Advisors, Inc., alleging accounting malpractice. According to ALPIS, “[t]he main crux of [its]
claim against [UHY] was that [UHY] failed to produce certain capitalization and accounting
documentation that was not supplied to [ALPIS’s] lending institution which destroyed [ALPIS’s]
credit, causing it to file Chapter 11 bankruptcy protection.” The case was transferred to the district
court, where UHY successfully moved for summary judgment. For the reasons set forth below, we
AFFIRM the judgment of the district court.
*
The Honorable John R. Adams, United States District Judge for the Northern District of Ohio, sitting by
designation.
No. 06-2387
ALPIS v. UHY
I. BACKGROUND
As an initial matter, the district court granted UHY’s motion to exclude ALPIS’s expert
witness and his reports for failure to comply with the disclosure requirements of Rule 26(a)(2)(C)
of the Federal Rules of Civil Procedure, concluding that ALPIS had failed to demonstrate
“substantial justification” for its noncompliance. The court then determined that summary judgment
was appropriate in the absence of the expert’s report because ALPIS had “acknowledged that all of
[its] evidence regarding breach, causation, and damages, depends on the expert witness testimony
of [Harry] Cendrowski.” ALPIS subsequently filed a motion for reconsideration, which the district
court denied. These rulings are the subject of ALPIS’s timely appeal.
II. ANALYSIS
A. Standard of review
We review de novo a district court’s grant of summary judgment. Int’l Union v. Cummins,
Inc., 434 F.3d 478, 483 (6th Cir. 2006). Summary judgment is proper where there exists no genuine
issue of material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ.
P. 56(c). In considering a motion for summary judgment, the district court must construe the
evidence and draw all reasonable inferences in favor of the nonmoving party. Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). The central issue is “whether the
evidence presents a sufficient disagreement to require submission to a jury or whether it is so
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No. 06-2387
ALPIS v. UHY
one-sided that one party must prevail as a matter of law.” Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 251-52 (1986).
Regarding the district court’s antecedent exclusion of ALPIS’s expert witness, we apply the
more deferential abuse-of-discretion standard. See Dickenson v. Cardiac and Thoracic Surgery of
Eastern Tenn., 388 F.3d 976, 983 (6th Cir. 2004) (“We review the exclusion of expert testimony
pursuant to Rule 37(c)(1) under an abuse-of-discretion standard.”).
B. Discussion
ALPIS interprets this case as presenting only two questions: (1) whether the district court
abused its discretion in concluding that ALPIS had not demonstrated “substantial justification” to
excuse its tardiness in producing its expert witness’s report, and (2) whether the district court erred
in concluding that ALPIS could not proceed with its lawsuit in the absence of the expert report. But
we need not answer either of these questions to dispose of ALPIS’s appeal. We instead address an
even more basic question that, although discussed by the district court, ALPIS fails to raise on
appeal. Specifically, we ask whether summary judgment against ALPIS would have been
appropriate even if the report had been considered. If so, then the issue of whether the district court
improperly excluded the report as an initial matter would be moot.
ALPIS made two crucial concessions in the district court. It first conceded that “all of [its]
evidence regarding breach, causation, and damages[] depends on the expert witness testimony of
Cendrowski.” Second, and equally important, it qualified this first concession by admitting that “the
expert report does not discuss damages.” The district court accordingly determined that “Plaintiff’s
accounting malpractice claim would be dismissed even if the Court allowed Plaintiff to use the
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No. 06-2387
ALPIS v. UHY
expert report.” In its denial of ALPIS’s motion for reconsideration, moreover, the district court
reminded ALPIS of the following exchange that had taken place during the hearing on UHY’s
summary judgment motions:
COURT: Is Mr. Young [counsel for UHY] correct that there is no evidence in
the record of damages?
ALPIS’s
COUNSEL: That’s correct, Judge.
The district court, on the basis of ALPIS’s concession of having no proof of damages, granted
summary judgment in favor of UHY. Although ALPIS attempted to submit a supplemental report
on damages from its expert after the court had already refused to accept the expert’s initial report,
the court explicitly declined to consider the “Damage Report” because “Plaintiff never sought, and
the Court did not grant, leave to file supplemental documents in opposition to Defendant’s motions
for summary judgment.” The damage report is therefore not a part of the record on appeal. See Fed.
R. App. P. 10(a) (limiting the record on appeal to “the original papers and exhibits filed in the district
court”) (emphasis added).
Because ALPIS does not meaningfully challenge this alternative ruling on appeal, and
because it is a perfectly legitimate basis for granting summary judgment to UHY, we need not
proceed any further in our analysis. ALPIS’s last-ditch attempt to save its case at oral
argument—namely, insisting that expert testimony was not essential to proving malpractice—is a
nonstarter because even a layperson would have needed evidence of damages to find in ALPIS’s
favor.
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No. 06-2387
ALPIS v. UHY
III. CONCLUSION
For all of the reasons set forth above, we AFFIRM the judgment of the district court.
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