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Pals Group, Inc. v. Quiskeya Trading Corp.

United States District Court, S.D. Florida, Miami Division

November 20, 2017

PALS GROUP, INC., Plaintiff,
QUISKEYA TRADING CORP., et al. Defendants.



         Defendants Quiskeya Trading Corp. and Patrick Louissaint move to strike as a sham Christopher Dupuy's declaration and a damages expert report attached to the declaration, both of which Plaintiff Pals Group, Inc. relies on to oppose Defendants' partial summary judgment motion. [ECF Nos. 60-1');">1; 64]. Pals Group filed an opposition response. [ECF No. 66]. Defendants did not file a reply.

         For the reasons explained below, the Undersigned denies the motion to strike.

         I. Background

         Dupuy owns Pals Group, an import/export distributor of various food products for the Caribbean community living in the United States. For several years, Louissaint worked for Pals Group in various capacities, including as an accountant. According to Pals Group, by virtue of his employment, Louissaint became privy to Pals Group's proprietary information, which he then wrongly used to form two competing businesses at two different times. That led Pals Group to sue Louissaint and Quiskeya (the second allegedly competing company) under various legal claims, which are pending before this Court.

         Defendants have moved for partial summary judgment on several of the claims and filed a statement setting forth what they consider to be the material, undisputed facts. [ECF Nos. 52; 54]. The statement relies heavily on testimony given at an evidentiary hearing that this Court held on Pals Group's motion for preliminary injunction. [ECF No. 34].

         Pals Group filed an opposition response and a counter-statement of facts that, Pals Group says, create genuine issues of fact for the jury to consider at trial. [ECF Nos. 60-61');">1]. Pals Group's statement also relies heavily on the testimony given at the preliminary injunction evidentiary hearing. But, in addition, Pals Group relies on a declaration signed by its owner, Dupuy, which is attached to the statement. [ECF No. 60-1');">1, pp. 1');">1-6]. The declaration, in turn, attaches the expert report of Pals Group's financial expert, who opines on Pals Group's damages. [ECF No. 60-1');">1, pp. 7-22].

         Defendants move to strike Dupuy's declaration and the expert report on the grounds that they contradict Dupuy's testimony before the Court at the preliminary injunction hearing. To be precise, Defendants submit that four different statements within Dupuy's declaration impermissibly contradict the prior testimony. Pals Group disagrees, arguing that the challenged statements, at worst, further explain or expand upon the prior testimony.

         II. Legal Standard

         Under “limited circumstances, ” a court may, as it evaluates a summary judgment motion, “disregard an affidavit as a matter of law when, without explanation, it flatly contradicts his or her own prior deposition testimony for the transparent purpose of creating a genuine issue of fact where none existed previously.” Furcron v. Mail Ctrs. Plus, LLC, 1');">1295');">843 F.3d 1');">1295, 1');">1306 (1');">11');">1th Cir. 201');">16). The so-called “sham affidavit” rule “operates in a limited manner to exclude unexplained discrepancies and inconsistencies.” Id. It does not, on the other hand, exclude inconsistencies that simply “create an issue of credibility or go to the weight of the evidence.” Id. Moreover, the rule must be used “sparingly because of the harsh effect it may have on a party's case.” Id.

         As shown above, binding Eleventh Circuit precedent on the “sham affidavit” rule speaks of “prior deposition testimony.” Id. (emphasis added). Defendants, by contrast, argue here that Dupuy's declaration is a sham because it contradicts his prior testimony at an evidentiary hearing. No party flags this potential distinction (between deposition testimony and testimony at a hearing) or discusses whether the difference could have legal consequences. Independent research has revealed at least one decision, by Magistrate Judge John O'Sullivan, finding that the “sham affidavit” rule applies with equal force to prior sworn testimony given at a hearing as it does to prior sworn testimony given at a deposition. See Hill v. Lazarou Enters., Inc., No. 1');">10-61');">1479-CIV, 201');">11');">1 WL 1');">1331');">1272, at *1');">15 (S.D. Fla. Mar. 1');">17, 201');">11');">1) (“The undersigned sees no reason to distinguish between sworn testimony at an unemployment hearing and sworn testimony at a deposition.”) (citing McCormick v. City of Fort Lauderdale, 1');">1234');">333 F.3d 1');">1234, 1');">1240 n. 7 (1');">11');">1th Cir. 2003) (applying the “sham affidavit” rule where affidavit allegedly contradicted prior sworn statement given to police)).

         This potential issue, however, will not be addressed here because the Court finds that the challenged statements do not actually contradict prior testimony -- and therefore should not, as a threshold matter, be struck under the “sham affidavit” rule.

         III. Analysis

         A. First Statement

         Defendants first focus on paragraph 1');">10 of Dupuy's declaration, which states:

I testified at the hearing on Pals Group's motion for preliminary injunction that “I hoped” Mr. Louissaint and his company would pay their debt back to Pals Group. To be clear, this testimony was not meant to convey that Mr. Louissaint and his company had the option to pay or not pay - there was (and remains) an express agreement (now breached) by Mr. Louissaint to re-pay the debt incurred. Instead, my testimony was meant to convey that I was hopeful that what has happened would not happen again - that is, that Mr. Louissaint and his company would be unable to repay their debt, or deliberately avoid it.

[ECF No. 60-1');">1, p. 3].

         Defendants argue that this statement contradicts the following testimony Dupuy gave at the preliminary injunction hearing:

I told him [Louissaint] I think it makes sense for you to keep on doing business. Those trucks are not worth anything to me, but to you they are worth something for you to keep doing business and, then, hopefully, eventually, can pay me back what you owe me.
I told him [Louissaint], [w]ell, then let's do this. Take back the trucks, because to me, and if I do this merger with Iberia, if it goes through, those trucks are worthless ...

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