Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

In re Quality Lease And Rental Holdings, LLC

United States District Court, S.D. Texas, Victoria Division

November 8, 2019

In re QUALITY LEASE AND RENTAL HOLDINGS, LLC, Debtor.
v.
QUALITY LEASE AND RENTAL HOLDINGS, LLC, et al., Defendants. GRETA YVETTE MOBLEY, et al., Plaintiffs,

          MEMORANDUM AND ORDER

          NANCY F. ATLAS SENIOR UNITED STATES DISTRICT JUDGE

         This fraud, tort, and breach of contract case is before the Court on the Motion to Exclude E. Allen Jacobs (“Motion to Exclude”) [Doc. # 35] filed by Greta Yvette Mobley (“Yvette Mobley”), David Michael Mobley (“Michael Mobley”), QLS HoldCo, Inc. (“HoldCo”), Texas Quality Mats, LLC (“TQ Mats”), and Texas Quality Gate Guard Services, LLC (“TQ Gate”) (collectively, the “Mobley Parties”).[1] Quality Lease and Rental Holdings, LLC (“QLRH”), Quality Lease Rental Service, LLC (“QLRS”), Quality Lease Service, LLC (“QLS”) (collectively, the “Quality Companies”), and Rocaceia, LLC (“Rocaceia”) (collectively, “Debtors”) filed an Opposition [Doc. # 39], and the Mobley Parties filed a Reply [Doc. # 46]. The Court has reviewed the record and the applicable legal authorities. Based on that review, the Court grants the Motion to Exclude only as to any new opinions offered for the first time in the Rebuttal Opinion, and denies the Motion to Exclude in all other respects.

         I. BACKGROUND

         In 1989, Michael Mobley and Yvette Mobley formed QLS, an oilfield services company. They later formed QLRS and QCE, related companies that provided services to the oil field industry. QLS leased or rented oil field equipment, while QLRS performed related services such as transporting the rig housing, cleaning the houses, and servicing the shower houses.

         In December 2012, Michael Mobley and Yvette Mobley[2] sold QLS and QLRS to a newly-created company, QLRH, pursuant to the terms and conditions of a Purchase and Contribution Agreement (“Purchase Agreement”). First, they formed HoldCo for the sole purpose of completing the transaction. Then they used HoldCo to complete the sale of QLS and QLRS to QLRH. Rocaceia had formed QLRH to be the entity that would purchase QLS and QLRS. Rocaceia was owned by a group of investors led by Allan Martin.

         Pursuant to the terms of the Purchase Agreement and through a series of transactions, Michael Mobley and Yvette Mobley transferred 80% of their interest in QLS and QLRS in exchange for approximately $40 million in cash and a $20 million promissory note. Michael Mobley entered into an employment agreement with QLRH (“Employment Agreement”) to serve as the President of QLRH. Yvette Mobley and sons David Russell Mobley and Cody Blane Mobley were at-will employees of QLRH. The Purchase Agreement contained certain covenants to prevent Michael Mobley and Yvette Mobley from competing with or interfering in the business of QLRH.[3]

         QCE was not included in the Purchase Agreement. Michael Mobley continued to operate QCE and other Mobley-controlled companies.

         Soon after the sale of QLS and QLRS to QLRH was completed, Allan Martin complained that Michael Mobley was devoting his time and attention to QCE, and that he was using QCE to compete with QLRH.

         On March 22, 2013, David Russell Mobley and Cody Blane Mobley formed SLS. On April 5, 2013, they resigned from their employment with QLRH. On April 6, 2013, Yvette Mobley was fired by QLRH and Michael Mobley was placed on administrative leave. On April 17, 2013, the Mobley sons, through SLS, purchased QCE from their parents for $3.6 million. On April 19, 2013, the Mobley sons formed SLRS which, together with SLS, performed services similar to those provided by QLRH.

         Following the purchase of QLS and QLRS, net sales by QLRH fell $16 million from net sales by the composite companies the prior year, and QLRH's EBITDA[4] fell $12.1 million. QCE's total invoiced work, on the other hand, increased dramatically. Almost all of the increase in QCE's business was attributable to services that were offered by QLRH.

         Debtors filed a Chapter 11 bankruptcy petition on October 1, 2014. On October 8, 2014, a lawsuit filed in Texas state court by some of the Mobley Parties was removed as this adversary proceeding. In connection with this adversary proceeding, Debtors filed a counterclaim against the Mobley Parties and designated E. Allen Jacobs as an expert witness on Debtors' alleged damages and on causation. Jacobs submitted an extensive Expert Report (“Original Report”) dated July 25, 2018, attached as Exhibit B to the Response. On October 22, 2018, Jacobs submitted a Rebuttal Report, attached as Exhibit C to the Response.

         While the Adversary Proceeding was pending before the Bankruptcy Court, the Mobley Parties and the Third Party Defendants moved to exclude Jacobs as an expert witness. By Order [Doc. # 328 in Adv. No. 14-6005] entered May 15, 2019, the Bankruptcy Court denied the motion to exclude. Although the Bankruptcy Court's ruling is not binding on this Court, it is well-reasoned and persuasive.

         Following withdrawal of the reference to the Bankruptcy Court and reinstatement of the case on this Court's active docket, see Order [Doc. # 23], the Mobley Parties and Third Party Defendants filed their Renewed Motion to Exclude E. Allen Jacobs [Doc. # 35]. The Motion has been fully briefed. The Court has reviewed the record on the Motion to Exclude, and all pertinent documents. The Motion is now ripe for decision.

         II. APPLICABLE LEGAL STANDARD

         Witnesses who are qualified by “knowledge, skill, experience, training or education” may present opinion testimony to the jury. Fed.R.Evid. 702; see, e.g., Whole Woman's Health v. Hellerstedt, __ U.S. __, 136 S.Ct. 2292, 2316 (2016); Moore v. Ashland Chem., Inc., 151 F.3d 269, 276 (5th Cir. 1998) (en banc); Huss v. Gayden, 571 F.3d 442, 452 (5th Cir. 2009). To be admissible, an expert's proffered testimony must be both relevant and reliable. See Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 591-92 (1993); Carlson v. Bioremedi Therapeutic Sys., Inc., 822 F.3d 194, 199 (5th Cir. 2016).

         The expert testimony must be relevant and the expert's proposed opinion must be one that would assist the trier of fact to understand or decide a fact in issue. See Weiser-Brown Operating Co. v. St. Paul Surplus Lines Ins. Co., 801 F.3d 512, 529 (5th Cir. 2015); Bocanegra v. Vicar Servs., Inc., 320 F.3d 581, 584 (5th Cir. 2003) (citing Daubert, 509 U.S. at 591-92). “A party seeking to introduce expert testimony must show (1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.