Arizona Bankruptcy American Inn of Court

1. Arizona Bankruptcy American Inn of Court February 9, 2012 Pupilage Number 1 Evidentiary Objections

2. Evidentiary Objections • Video Vignette • Table Discussion • Answer • Ruling

3. Hypothetical 1

4. Hypothetical 1, Question 1 Should the objection be sustained or overruled? • (A) The Objection should be overruled; the Debtor may always testify as to the value of property that he owns. • (B) The Objection should be sustained; the Debtor is improperly relying on what others told him. • (C) The Objection should be sustained; the Debtor may not testify as to the value of his home.

5. Ruling

6. Hypothetical 1, continued

7. Hypothetical 1, Question 2 Should the objection be sustained or overruled? • (A) The Objection should be overruled; newspaper ads accurately reflect the current value of the Debtor’s car. • (B) The Objection should be sustained; market reports or data are never admissible. • (C) The Objection should be sustained; the ads are simply the offers from sellers, not reliable as to the value of cars similar to the Debtor’s.

8. Ruling

9. Hypothetical 1, continued

10. Hypothetical 1, Question 3 Should the Court have admitted the Red Book values into evidence as Exhibit 2? • (A) Yes, the Red Book is self-authenticating, and is the type of reliable compilation or directory that the public and experts in the field rely upon in valuing a vehicle. • (B) Yes, the Red Book is a reliable starting point, but there should be evidence as to the actual condition of the Debtor’s vehicle to determine an appropriate value therefor. • (C) No, the Red Book is not a reliable source.

11. Ruling

12. Hypothetical 1, Question 4 Should the objection of Debtor’s counsel be sustained as to the use of the internet version of the Kelly Blue Book? • (A)Yes, the internet is an unreliable source. • (B) Yes, Bank’s Attorney created the website on his computer. • (C) No, provided that the Court and counsel are satisfied that they have actually gone to the internet site of the Kelly Blue Book.

13. Ruling

14. Questions / Discussion

15. Hypothetical # 2

16. Hypothetical 2, Question 1 Is Debtor entitled to a protective order precluding discovery of Expert’s initial draft report? (A) Yes. The fraudulent transfer action was filed before the amendments to Rule 26 took effect, so the old rule applies. But even under the old rule, only hard copies of documents are subject to disclosure. (B) No. The fraudulent transfer action was filed before the amendments to Rule 26 took effect, so the old rule applies. Under the old rule, all draft reports prepared by testifying experts are discoverable, regardless of the form of the report. (C) Yes. The final report was disclosed and the subpoena was served after the amendments to Rule 26 took effect, so the amended rule applies. Amended Rule 26(b)(4)(B) protects from disclosure any draft of an expert report, regardless of the form in which the draft is recorded. (D) No. The final report was disclosed and the subpoena was served after the amendments to Rule 26 took effect, so the amended rule applied. However, even the amended rule does not protect from disclosure drafts of expert reports that state a different conclusion than the expert’s final report, because the impeachment value of such a draft is very high.

17. Ruling

18. Hypothetical 2, continued

19. Hypothetical 2, Question 2 Does amended Rule 26(b)(4) protect the draft expert report from disclosure? (A) Yes. Amended Rule 26(b)(4) applies to contested matters, regardless of whether the expert is actually required to disclose a report. (B) Yes. The plain language of Rule 26(b)(4) only protects “drafts of any report or disclosure required under Rule 26(a)(2).” Rule 26(a)(2) does not apply in contested matters, and the expert was not actually required to produce a report. However, if the expert voluntarily produces a report, the amended Rule protects the report from disclosure. (C) No. The plain language of Rule 26(b)(4) only protects “drafts of any report or disclosure required under Rule 26(a)(2).” Rule 26(a)(2) does not apply in contested matters, and the expert was not actually required to produce a report. Therefore, Rule 26(b)(4), which protects drafts of expert reports required to be disclosed, does not apply to the plan confirmation hearing. (D) No. The bankruptcy case was filed before the amended Rule 26 took effect, and therefore the amended rule does not apply.

20. Ruling

21. Hypothetical 2, Question 3 Assuming the Amended Rule did apply to the plan confirmation hearing, which of the following would be protected from disclosure? (A) Emails between the Debtor’s attorney and the Expert in preparation for the confirmation trial about Money Bank’s expert report, which Expert did not consider in forming his own opinion of the Plan’s feasibility. (B) Expert’s invoices. (C) Any testimony concerning Expert’s conversation with the Debtor’s attorney about the facts and assumptions Expert should consider. (D) All of the above. (E) None of the above.

22. Ruling

23. Questions / Discussion

24. Hypothetical # 3

25. Hypothetical 3, Question 1 Based on the testimony you just heard, is Mr. Smartish qualified to testify as an expert? Should Mr. Smartish’s testimony be allowed? (A) The testimony should be allowed: Mr. Smartish is sufficiently qualified as an expert. (B) The testimony should not be allowed; Mr. Smartish is not sufficiently competent to qualify as an expert. (C) The testimony should not be allowed; the point scoring system utilized by Mr. Smartish has not been sufficiently established as a reliable methodology.

26. Ruling

27. Questions / Discussion

28. And the Winner is . . . . .

29. The End Thank you for your attendance and participation!