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Carlson, Inc. v. International Business MacHines Corporation

United States District Court, Eighth Circuit

November 13, 2013

Carlson, Inc., Plaintiff/Counter Defendant,
International Business Machines Corporation, Defendant/Counter Plaintiff.

Martin R. Lueck, Esq., Seth A. Northrop, Esq., and Christopher A. Seidl, Esq., Robins, Kaplan, Miller & Ciresi L.L.P., appeared for Plaintiff/Counter Defendant Carlson, Inc.

Steven D. McCormick, Esq., Anne McClain Sidrys, Esq., and Christa C. Cottrell, Esq., Kirkland & Ellis LLP, and Benjamin W. Hulse, Esq., Blackwell Burke P.A., appeared for Defendant/Counter Plaintiff International Business Machines Corporation.


JOAN N. ERICKSEN, District Judge.

This is an action by Carlson, Inc., against International Business Machines Corporation ("IBM") for fraud, breach of contract, and breach of fiduciary duties. Carlson also seeks declaratory relief. IBM has brought a counterclaim against Carlson for breach of contract.

The case is now before the Court on four motions: IBM's Motion for Summary Judgment, ECF No. 255; IBM's Motion to Exclude the Expert Opinions of Richard Boulton, ECF No. 272; IBM's Motion to Exclude the Expert Opinions of Professor Stephen J. Andriole, ECF No. 278; and Carlson's Motion to Exclude Evidence at Trial, ECF No. 299.

For the reasons explained below, the Court will deny each of the three motions seeking exclusion of an expert witness and grant in part and deny in part IBM's Motion for Summary Judgment.

I. Motions to exclude expert witnesses.

IBM has moved to exclude the opinions of two of Carlson's experts, Robert Boulton and Professor Stephen J. Andriole. IBM argues that Mr. Boulton's calculation of Carlson's damages is rooted in unreasonable facts and assumptions and that Professor Andriole's opinions regarding various aspects of the parties' arrangement were reached without independent analysis or the relevant expertise.

For its part, Carlson seeks to exclude the opinions of IBM's expert Timothy Clayson, arguing that Mr. Clayson has failed to disclose the bases for his opinions rebutting Mr. Boulton's and Professor Andriole's conclusions.

Federal Rule of Evidence 702 governs the admission of expert testimony and requires the Court to act as a gatekeeper to ensure that proffered expert testimony is both relevant and reliable. Vasquez v. Colores, 648 F.3d 648, 653 (8th Cir. 2011) (citing Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 589 (1993)). Under this rule, an expert's opinion must be excluded if it is "so fundamentally unsupported that it can offer no assistance to the jury...." Bonner v. ISP Techs., Inc., 259 F.3d 924, 929-30 (8th Cir. 2001) (internal citations and quotations omitted). However, "[a]s a general rule, the factual basis of an expert opinion goes to the credibility of the testimony, not the admissibility, and it is up to the opposing party to examine the factual basis for the opinion in cross-examination." Id. at 929. See also In re Zurn Pex Plumbing Products Liab. Litig., 644 F.3d 604, 613 (8th Cir. 2011) (noting that the application of Daubert 's gatekeeping principle may be "less stringent" in a bench trial because the "usual concerns" about exposing a jury to unreliable expert testimony are absent).

Here, where the case will be tried to the Court, nothing raised in the parties' memoranda persuades the Court that the exclusion of the experts' testimony, either in whole or in part, is required. The Court is confident that the parties, represented ably by counsel, will make good use of the opportunity to highlight any perceived weaknesses in the experts' methodology and opinions at trial.

All three of the motions to exclude expert witnesses will be denied.

II. IBM's motion for summary judgment.

IBM has moved for summary judgment on Carlson's fraud (Count II of the First Amended Complaint) and breach of fiduciary duties (Count IV) claims and for partial summary judgment on Carlson's claim for breach of contract (Count III).

Summary judgment is proper "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). "A party asserting that a fact cannot be or is genuinely disputed must support the assertion by citing to particular parts of materials in the record... or showing that the materials cited do not establish the absence or presence of a genuine dispute...." Id. (c)(1)(A)-(B). The Court "need consider only the cited materials, but it may consider other materials in the record" not specifically called to its attention by the parties' memoranda. Id. (c)(3). In determining whether summary judgment is appropriate, this "evidence and all fair inferences from it must be viewed in the light most favorable to the non moving party...." Johnson v. Blaukat, 453 F.3d 1108, 1112 (8th Cir. 2006).

A. Breach of contract.

IBM argues that partial summary judgment is warranted on Carlson's breach of contract claim because Carlson released that claim as it pertains to IBM's performance of ITO-related services prior to October 1, 2006 in Amendment 15 to the parties' Master Services Agreement ("MSA"). That amendment states, in relevant part, that "as of October 1, 2006, the Parties agree that IBM has met all performance obligations with respect to ITO-related Services and IBM is not in breach of the MSA with respect to such Services as of such date."

Carlson contends that this provision of Amendment 15 is either invalid or unenforceable as a release on four grounds. The Court concludes otherwise.

1. Intent to release or relinquish.

First, Carlson argues that Amendment 15 lacks language expressly limiting Carlson's rights and remedies. However, Minnesota does not demand formulaic language to create a valid release of claims. Dykes v. Sukup Mfg. Co., 781 N.W.2d 578, 582 (Minn. 2010). Instead, "the agreement must manifest an intent to release, discharge, or relinquish a right, claim, or privilege by a person in whom it exists to a person against whom it ...

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