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Exact Software Na v. Infocon Systems

October 19, 2011

EXACT SOFTWARE NA,
PLAINTIFF
v.
INFOCON SYSTEMS, INC., DEFENDANT



The opinion of the court was delivered by: James G. Carr Sr. United States District Judge

ORDER

This case began as a collection action by a software manufacturer, Exact Software NA, against one of its "resellers" (i.e., distributors), Infocon Systems, Inc. After protracted proceedings, Exact and Infocon settled for a payment of $4,000,000 by Exact to Infocon.

Shortly after reaching (but not yet disclosing) the settlement, Infocon notified its attorneys, J. Fox DeMoisey, of Louisville, Ky., and John Carey, of Toledo, Ohio, that it was terminating their services. Infocon provided no explanation for that action.

DeMoisey and Carey first learned of the settlement when Infocon's successor counsel notified the undersigned that the parties had settled the case. Immediately on learning of the settlement, DeMoisey filed a charging lien with this court.

Infocon opposed that action and asked that I allow it to receive the entire proceeds of the settlement forthwith. I declined to do so, ordering a portion of the settlement proceeds to be paid into this court's escrow account. I have released some of those funds to DeMoisey and Carey.

Infocon opposes release of any of the remaining fund to DeMoisey. In prior orders, I have agreed with it that no contingent fee agreement existed between it and him. Thus, to the extent that DeMoisey is entitled to additional funds for his services, he must establish his entitlement on a quantum meruit basis.*fn1

Pending are three motions in limine that Infocon has filed, in which it seeks to: 1) preclude expert testimony by three attorneys on DeMoisey's witness list (Doc. 365); 2) strike DeMoisey's summary exhibit representing the time he and his associate spent while representing Infocon (Doc. 366); and 3) preclude evidence about how the two principals of Infocon treated the settlement proceeds for tax purposes. (Doc. 367).

For the reasons that follow, I deny the motions -- though, as to one, denial is conditional on DeMoisey's providing discovery as requested by Infocon.

With regard to the motion to preclude expert testimony by three attorneys, DeMoisey has stated he will be calling only one of those attorneys -- namely, Mr. Carey, his former co-counsel. I see no basis on which to exclude his testimony in toto, as Infocon demands. That motion is overruled.

I likewise overrule the motion to strike the time and task summary. Infocon challenges the reliability of the data on which DeMoisey bases that exhibit. The basis for its challenge is the undisputed fact that DeMoisey's record of time and task underlying the summary is to a considerable extent a post hoc reconstruction, rather than being composed of contemporaneous entries.

That fact goes to weight, not admissibility. In other circumstances, the law permits a party to work backwards from disparate data to a conclusion. See U.S. v. Hart, 70 F.3d 854, *860 n.8 (6th Cir. 1995) (referencing computation of defendant's tax liability by "net worth" method).

Infocon complains that it does not have access to the underlying data on which DeMoisey bases his reconstruction. DeMoisey resists disclosure of that data on, inter alia, grounds of privilege and burdensomeness.

I do not find his contentions well-taken.

With regard to burdensomeness, he will have to do no more work than he had to do in the first instance to prepare the data on which he bases his summary. If he did not record what he used and where he found it, he should have done so. Given the unusual circumstance of presenting a reconstruction, at least in part, of his time ...


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