Opinion

1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 SOUTHERN DISTRICT OF CALIFORNIA 9 10 UNITED STATES AVIATION Case No.: 21-CV-758 JLS (BLM) UNDERWRITERS INC., a New York 11 corporation, individually and on behalf of ORDER: 12 United States Aircraft Insurance Group, (1) GRANTING IN PART, DENYING 13 Plaintiff, IN PART, AND RESERVING 14 v. RULING IN PART MOTIONS IN LIMINE, AND 15 AEROSPIKE IRON, LLC, a California limited liability company; and CHARLES 16 (2) SETTING STATUS BRANDES, a California resident, CONFERENCE 17 Defendants.

18 (ECF Nos. 164, 165) 19 20 21 22 23 24 25 26 27 28 1 AEROSPIKE IRON, LLC; and 2 CHARLES BRANDES, 3 Counterclaimants, 4 v. 5 UNITED STATES AVIATION 6 UNDERWRITERS INC., individually and on behalf of United States Aircraft 7 Insurance Group; ACE AMERICAN 8 INSURANCE COMPANY; and NATIONAL LIABILITY & FIRE 9 INSURANCE COMPANY, 10 Counterdefendants. 11 12 Presently before the Court are Plaintiff/Counterdefendant United States Aviation 13 Underwriters’ (“USAU”), Counterdefendant Ace American Insurance Company’s 14 (“Ace”), and Counterdefendant National Liability and Fire Insurance Company’s (“NLF”) 15 (collectively, “Plaintiffs”) Motions In Limine (ECF No. 164) and Defendants/ 16 Counterclaimants Aerospike Iron, LLC’s (“Aerospike”) and Charles Brandes’s 17 (collectively, “Defendants”) Motions In Limine (ECF No. 165). Having considered the 18 Parties’ arguments and the applicable law, the Court GRANTS IN PART, DENIES IN 19 PART, and RESERVES RULING IN PART the Parties’ MILs, as discussed below. 20 PLAINTIFFS’ MOTIONS IN LIMINE 21 I. Motion in Limine No. 1 (Exclude Evidence of Documents Related to Other 22 Insurers) 23 In their first Motion, Plaintiffs seek to preclude Defendants from offering evidence 24 or eliciting testimony concerning “documents related to other insurers.” ECF No. 164 at 25 6. Specifically, Plaintiffs seek to exclude the August 19, 2020, Global Aerospace Quote 26 (ECF No. 164, Ex-1) and the August 20, 2020, XL Specialty Insurance Company Quote 27 (ECF No. 164, Ex-2) (collectively, the “Proposals”). The Court DENIES IN PART and 28 RESERVES RULING IN PART the Motion. 1 The Court DENIES the Motion insofar as Plaintiffs argue that the evidence is not 2 relevant under Federal Rule of Evidence 401 or that the evidence is prejudicial under 3 Federal Rule of Evidence 403. ECF No. 164 at 7. Defendants’ use of the Proposals to 4 demonstrate that there is no industry-wide definition of the term “pilot” “has any tendency 5 to make a fact more or less probable than it would be without the evidence” and that fact 6 “is of consequence in determining the action.” FRE 401. Therefore, the Proposals are 7 relevant. Further, Plaintiffs’ argument that the Proposals will lead to jury confusion is 8 unpersuasive, as Defendants state they plan to use the evidence to demonstrate that there 9 is no universal definition of the term “pilot”—not, as Plaintiffs contend, to prove that the 10 additional restrictions in the policies impact who is considered a “pilot.” ECF No. 164 at 11 7; ECF No. 166 at 4–5. 12 The Court RESERVES RULING on the Motion insofar as it argues the evidence is 13 inadmissible for lack of foundation under Federal Rules of Evidence 901 and 902 or 14 hearsay under Federal Rules of Evidence 801 and 802. For the authentication objection, 15 the Court reserves ruling to allow Defendants to properly lay the foundation for and 16 authenticate the Proposals at trial. For the hearsay objection, the Court reserves ruling to 17 allow Defendants to satisfy the conditions of the business records exception under Federal 18 Rule of Evidence 803(6) or another applicable exception. See MRT Const. Inc. v. 19 Hardrives Inc., 158 F.3d 478, 483 (9th Cir. 1998) (“[R]ecords a business receives from 20 others are admissible under Federal Rule of Evidence 803(6) when those records are kept 21 in the regular course of that business, relied upon by that business, and where that business 22 has a substantial interest in the accuracy of the records.”).1 23 / / / 24 / / / 25 26 1 Defendants state in their Supplemental Briefing (ECF No. 188) that they “expect[] to show through the 27 testimony or certification of Mr. Hutter that he kept the other insurers’ proposals in the regular course of 28 his business, he relied upon them in providing services to Aerospike, and he had a substantial interest in 1 II. Motion in Limine No. 2 (Exclude Evidence of Reinsurance) 2 In their second Motion, Plaintiffs seek to preclude Defendants from offering any 3 evidence, testimony, argument, or reference to reinsurance. ECF No. 164 at 8. Plaintiffs 4 contend that “evidence of reinsurance ‘is irrelevant to a policy dispute between a direct 5 insurer and insured.’” Id. at 7 (citing XL Specialty Ins. Co. v. Crawford Tech. Servs., No. 6 CV04-8451-AHM (Mcx), 2006 WL 5112593, at *1 (C.D. Cal. Sept. 11, 2006) (granting 7 insurer’s motion in limine to exclude “Reference, Evidence or Argument Concerning 8 Reinsurance”)). The Court GRANTS the Motion as it is reasonable and unopposed. See 9 ECF No. 166 at 10. 10 III. Motion in Limine No. 3 (Exclude Evidence of ACE and NLF) 11 In their third Motion, Plaintiffs seek to preclude Defendants from offering any 12 evidence, testimony, argument, or reference related to Counterdefendants Ace and NLF 13 (collectively, the “Participating Insurers”) including but not limited to any agreements 14 between them and USAU. ECF No. 164 at 9. The Court DENIES the Motion. The 15 Participating Insurers are parties to this case and their identity and principal/agent 16 relationship with USAU are essential to establish their liability. See U.S. Aviation 17 Underwriters Inc. v. Aerospike Iron, LLC, No. 21-CV-758, 2024 WL 2948626, at *18 (S.D. 18 Cal. June 11, 2024). Further, the Court is not persuaded that a simple agency relationship 19 risks confusing or muddling the issues. 20 IV. Motion in Limine No. 4 (Exclude Evidence Related to USAU’s Loss Reserves in 21 Connection with the Subject Aircraft) 22 In their fourth Motion, Plaintiffs seek to preclude Defendants from offering any 23 evidence, testimony, argument, or reference related to USAU’s loss reserves established in 24 connection with the Subject Aircraft. ECF No. 164 at 12. The Court GRANTS the Motion 25 as it is reasonable and unopposed. See ECF No. 166 at 12. 26 / / / 27 / / / 28 / / / 1 V. Motion in Limine No. 5 (Bifurcate Defendants’ Punitive Damage Claim and 2 Preclude Evidence of USAU’s Financial Condition Until Punitive Damage 3 Phase) 4 In their fifth Motion, Plaintiffs seek to bifurcate Defendants’ punitive damage claim 5 into a separate phase and preclude Defendants from introducing any evidence, argument, 6 or reference to USAU’s financial condition or status until the punitive damage phase of 7 trial. ECF No. 164 at 12. The Court GRANTS the Motion as it is reasonable and 8 unopposed. 9 The Court agrees with Plaintiffs that under FRCP 42(b), a court has broad discretion 10 to order separate trials based on separate issues or claims “[f]or convenience, to avoid 11 prejudice, or to expedite and economize.” De Anda v. City of Long Beach, 7 F.3d 1418, 12 1421 (9th Cir. 1993) (stating “[i]t is clear that Rule 42(b) gives courts the authority to 13 separate trials into liability and damage phases”). Further, the Court finds that evidence of 14 Plaintiffs’ financial condition without first finding the conduct to be “malicious, 15 oppressive[,] or in reckless disregard” of Defendants’ rights may lead to prejudice and jury 16 confusion. See Est. of Nunez v. Cnty. of San Diego, No. 16-CV-01412 BEN (MDD), 2019 17 WL 2238655, at *5 (S.D. Cal. May 23, 2019). 18 VI. Motion in Limine No. 6 (Exclude Evidence of Repairability and Salvage Sale of 19 the Subject Aircraft) 20 In their sixth Motion, Plaintiffs seek to exclude evidence related to the repairability 21 and salvage sale of the Subject Aircraft, including the Exhibits identified by Defendants in 22 their Federal Rule of Civil Procedure 26(a)(3) disclosures—labeled Exhibits AA through 23 AJ. ECF Nos. 164 at 13–14; 116-1 at 5–7. The Court RESERVES RULING on the 24 Motion to consider the admissibility of each Exhibit in context. 25 VII. Motion in Limine No. 7 (Exclude Evidence that USAU Did Not Send Aerospike 26 an Application for Insurance Before Issuing the Insurance Policy) 27 In their seventh Motion, Plaintiffs seek to preclude Defendants from introducing 28 evidence and testimony regarding “the fact that USAU did not send Aerospike an 1 application for insurance before issuing the insurance policy.” ECF No. 164 at 15. The 2 Court GRANTS IN PART and DENIES IN PART the Motion. 3 The Court begins by concluding that Motion in Limine Seven is procedurally proper. 4 The Court agrees with Plaintiffs that the Court’s Order (ECF No. 158) did not prohibit the 5 filing of new motions in limine, and the Court can and should address potential evidentiary 6 issues now “to enable planning and avoid interruptions to [the] jury trial.” United States 7 v. McElmurry, 776 F.3d 1061, 1066 (9th Cir. 2015). 8 The Court GRANTS the Motion insofar as this evidence is tried to the jury. The 9 Court finds that this evidence is only relevant to the rescission claim.2 10 The Court DENIES the Motion insofar as the evidence will be presented to the 11 bench. Defendants correctly point out that “[w]hen determining whether a concealed fact 12 is material, an important consideration involves whether the insurance company inquired 13 as to the fact.” U.S. Aviation Underwriters Inc., 2024 WL 2948626, at *12 (citing Am. 14 Mut. Liab. Ins. Co. v. Goff, 281 F.2d 689, 693–94 (9th Cir. 1960)). Evidence that USAU 15 did not send Aerospike an application for insurance “has any tendency to make a fact more 16 or less probable than it would be without the evidence” and that fact “is of consequence in 17 determining the action.” Fed. R. Evid. 401. 18 VIII. Motion in Limine No. 8 (Exclude Evidence that Scott Kitchens Did Not Know 19 that the FAA Revoked His Pilot’s License) 20 In their eighth Motion, Plaintiffs seek to preclude Defendants from offering any 21 evidence, testimony, or argument that Aerospike’s missing agent and aircraft manager, 22 Scott Kitchens (“Kitchens”), did not know that the FAA had revoked his pilot’s license at 23 the time Aerospike obtained insurance from USAU. ECF No. 164 at 16. The Court 24 RESERVES RULING on the Motion. 25 26 27 28 2 At the Motion in Limine hearing, Defendants’ counsel agreed with the Court that evidence that USAU 1 The Court begins by concluding that Plaintiffs’ Motion in Limine Eight is also 2 procedurally proper based on the reasoning discussed earlier. The Court reserves ruling on 3 the Motion insofar as Plaintiffs object under Federal Rule of Evidence 602. While the 4 Court is aware that Kitchens is missing, the Court is tentatively inclined to reserve ruling 5 to allow Defendants to present witnesses with personal knowledge and consider the 6 evidence as it is introduced. 7 Insofar as Plaintiffs rely on the mailbox rule, the Court reserves ruling to allow 8 Plaintiffs to introduce sufficient evidence of mailing to raise the presumption and allow 9 Defendants an opportunity to rebut. See Schikore v. BankAmerica Supp. Ret. Plan, 269 10 F.3d 956, 961 (9th Cir. 2001) (“[T]he proper and timely mailing of a document raises a 11 rebuttable presumption that the document has been received by the addressee in the usual 12 time.”); see also California Lab. & Workforce Dev. Agency v. CompuCom Sys., Inc., No.

13 21-cv-2327-KJM-KJN, 2022 WL 3142704, at *3 (E.D. Cal. July 27, 2022) (“To rely on 14 the presumption that [a party] received the mailed notice of the company’s new policy, [the 15 party attempting to invoke the mailbox rule] must show the policy was properly mailed 16 and addressed.”). 17 IX. Motion in Limine No. 9 (Exclude Evidence Seeking to Paint the Insurance 18 Industry in a Negative Light) 19 In their ninth Motion, Plaintiffs seek to preclude Defendants from offering any 20 evidence, testimony, argument, or reference that seeks to paint the insurance industry in a 21 negative light. ECF No. 164 at 19. The Court DENIES the Motion. 22 The Court begins by concluding that Plaintiffs’ Motion in Limine Nine is also 23 procedurally proper based on the reasoning discussed earlier. Further, Defendants state 24 that they “do not intend to offer any evidence, testimony, or argument painting the 25 insurance industry, in general, in an unfavorable light,” but only intend to offer such 26 evidence about USAU’s interactions in the circumstances underlying this case. ECF No. 27 166 at 20–21. Plaintiffs state that this Motion only covers evidence concerning the 28 insurance industry generally, and not contentions relating to USAU specifically. ECF No. 1 170 at 9. Therefore, the Parties are in agreement. If, at trial, Defendants introduce evidence 2 painting the insurance industry generally in an unfavorable light, Plaintiffs can object at 3 that time. 4 DEFENDANTS’ MOTIONS IN LIMINE 5 I. Motion in Limine No. 1 (Exclude Evidence of Defendants’ Alleged Concealment 6 of Post-Underwriting Activities) 7 In their first Motion, Defendants seek to exclude evidence, mention, fact, or 8 contention of Defendants’ alleged concealment of post-underwriting activities and to 9 preclude the use of or reference to Nathan Russell’s (“Russell”) December 14, 2020, Pilot 10 Record Form (Plaintiffs’ Exhibit 35) and its email transmittal from Tim Hutter to USAU 11 (Plaintiffs’ Exhibit 109). ECF No. 165 at 8–9. The Court GRANTS IN PART, DENIES 12 IN PART, and RESERVES RULING IN PART the Motion. 13 The Court GRANTS the Motion insofar as the evidence will be presented to the jury 14 in the legal phase of trial. The Court is unpersuaded by Plaintiffs’ argument that this 15 evidence is relevant to the meaning of “pilot,” and the risk of jury confusion substantially 16 outweighs any potential probative value. 17 The Court DENIES the Motion insofar as the evidence will be presented to the 18 bench. In its Summary Judgment Order, the Court relies on evidence of Aerospike’s 19 December 2020 actions when analyzing the materiality element of the concealment claim. 20 See U.S. Aviation Underwriters Inc., 2024 WL 2948626, at *12. While Defendants are 21 correct that Plaintiffs cannot use the post-underwriting actions as the relevant conduct 22 forming the basis of the concealment claim, this evidence may be relevant for other 23 purposes for which it is not foreclosed, i.e., materiality. 24 The Court RESERVES RULING on the Motion insofar as the evidence will be 25 presented during the bad faith phase of trial.3 26 27 3 The Court has not decided how the bad faith claim will be tried—i.e., whether bad faith will be heard in 28 a separate phase. If they are tried together, the Court will consider limiting instructions submitted by the 1 II. Motion in Limine No. 2 (Exclude Alleged Misrepresentations by Defendants 2 During the Application Process) 3 In their second Motion, Defendants seek to exclude any mention, evidence, fact, or 4 contention of alleged misrepresentations by Defendants prior to or during the application 5 process for the Policy. ECF No. 165 at 10. The Court GRANTS IN PART, DENIES IN 6 PART, and RESERVES RULING IN PART the Motion. 7 The Court GRANTS the Motion insofar as Plaintiffs intend to introduce evidence 8 of alleged misrepresentations by Defendants prior to or during the application process for 9 the Policy to the jury in the legal phase of trial. The Court is unpersuaded that this evidence 10 is relevant to the meaning of “pilot” because Aerospike’s understanding of the term “pilot” 11 does not tend to prove what “pilot” means within the customary usage of that term in the 12 aviation insurance industry. 13 Further, the Court GRANTS the Motion insofar as Plaintiffs continue to argue that 14 Defendants’ statements were misrepresentations. In the Court’s Summary Judgment 15 Order, the Court found that “no reasonable jury could find that Defendants’ agents 16 communicated a false representation to Plaintiffs at or before the issuance of the Policy.”4 17 U.S. Aviation Underwriters Inc., 2024 WL 2948626, at *11. Therefore, Plaintiffs cannot 18 continue to argue that these statements (or any pre-Policy statements or actions) are 19 “misrepresentations” as they continue to do in the Amended Pretrial Order and Opposition 20 to Defendants’ Motions in Limine (ECF No. 167). 21 The Court DENIES the Motion insofar as the evidence will be tried to the bench. 22 These facts may be relevant to materiality. While Plaintiffs cannot continue to argue 23 24 4 The three statements addressed in the Summary Judgment Order are: (1) Kitchens gave Hutter the 25 impression that Judd and Eyquem would crew the aircraft going forward, (2) Kitchens told Hutter that Kitchens would not be piloting the Covered Aircraft, and (3) Hutter told USAU Underwriter Drew 26 Whitaker that Eyquem and Judd would come on board as full-time pilots. U.S. Aviation Underwriters Inc., 2024 WL 2948626, at *9. The Court found that, regarding statements 1 and 2, Plaintiffs failed to 27 offer any evidence that Kitchens’ alleged misrepresentations were communicated to them. Id. Regarding 28 statement 3, the Court found that the representation was made to Plaintiffs, but that it was not false— 1 recission based on misrepresentation, Plaintiffs can present the evidence for other issues 2 not decided on summary judgment. 3 The Court RESERVES RULING on the Motion insofar as the evidence will be 4 presented during the bad faith portion of trial. 5 III. Motion in Limine No. 3 (Exclude Testimony by Plaintiffs’ Expert, Morris 6 Smith, Regarding the Alleged Diminished or Fair Market Value of the Subject 7 Aircraft) 8 In their third Motion, Defendants seek to preclude any testimony by Plaintiffs’ 9 expert, Morris Smith (“Smith”), regarding (1) the diminished value of the Subject Aircraft 10 following the accident, (2) the impact of any failure to preserve the engines on the value of 11 the Aircraft following the accident, and (3) the sale of the Subject Aircraft following the 12 accident and whether Aerospike received fair market value. The Court GRANTS IN 13 PART and DENIES IN PART the Motion. 14 The Court GRANTS the Motion insofar as Plaintiffs attempt to reargue the 15 admissibility of Smith’s repairability opinion. See ECF No. 167 at 13–14. In the Court’s 16 Daubert section of its Summary Judgment Order, the Court found that Plaintiffs’ witness, 17 Smith, cannot offer opinion that the Subject Aircraft could be repaired because he did not 18 acquire sufficient information “about the internal/structural conditions of the aircraft and 19 the availability of parts” and therefore “neither had sufficient information nor applied a 20 reliable methodology.” U.S. Aviation Underwriters Inc., 2024 WL 2948626, at *25. 21 Therefore, any argument by Plaintiffs that Smith’s repairability opinion can be used to 22 prove the diminished value of the Subject Aircraft or that Smith can testify regarding the 23 “spoilation of evidence” is not permitted. 24 The Court GRANTS the Motion regarding Smith’s ability to testify as to the exact 25 amount of diminished value of the Subject Aircraft and whether the Subject Aircraft’s 26 engines actually were damaged. In the Court’s Summary Judgment Order, the Court 27 allowed Smith to testify that the Subject Aircraft’s engines were stored open to the 28 elements and that exposure could result in the engines being economically unreasonable to 1 ever return to service or have salvage value. U.S. Aviation Underwriters Inc., 2024 WL 2 2948626, at *26 (citing ECF No. 80, Ex. 10 at 172–73). Smith can opine that this exposure 3 could result in the engines diminishing in value or increasing repair costs. However, Smith 4 cannot testify that the Subject Aircraft’s engines actually were damaged, as he did not 5 observe the engines and testified at deposition that he did not know if a failure to preserve 6 the engines resulted in any damage to the engines here. See ECF No. 171 at 4 (citing ECF 7 No. 171, Ex. L). 8 Additionally, the Court GRANTS the Motion regarding Smith’s ability to testify as 9 to whether Aerospike received fair market value at the sale. Smith testified at his 10 deposition that “he had no idea what happened to the Aircraft following the accident.” See 11 ECF No. 171 at 4. 12 The Court DENIES the Motion insofar as it seeks to exclude Smith’s testimony 13 regarding preservation. The Court follows its previous ruling concluding that Smith’s 14 testimony regarding preservation is admissible and relevant to the failure to mitigate 15 defense. See U.S. Aviation Underwriters Inc., 2024 WL 2948626, at *26 (“Exposure 16 ‘could result in the engines being economically unreasonable to ever return to service or 17 have salvage value.’” (quoting ECF No. 80, Ex. 10 at 172–73)). 18 IV. Motion in Limine No. 4 (Exclude Evidence of Defendant Charles Brandes’ Net 19 Worth or Personal Wealth) 20 In their fourth Motion, Defendants seek to preclude any testimony, mention, or 21 evidence of Defendant Charles Brandes’ (“Brandes”) personal wealth or net worth at trial. 22 ECF No. 165 at 13. The Court DENIES IN PART and GRANTS IN PART the Motion. 23 The Court DENIES the Motion insofar as the evidence will be presented during the 24 punitive damages phase of trial. In the cases cited by Defendants in support of their 25 Motion, the parties explicitly narrowed their motion to exclude the punitive damages phase 26 of trial. See Farris v. Int’l Paper, Inc., No. 2:13-CV-02079-CAS, 2014 WL 6473273, at 27 *22 (C.D. Cal. Nov. 17, 2014) (“Defendant argues that such evidence is not relevant to any 28 of plaintiffs’ claims, especially since plaintiffs are not seeking punitive damages.”); Dubric 1 v. A Cab, LLC, No. 15-cv-2136-RCJ-CWH, 2017 WL 662487, at *4 (D. Nev. Feb. 17, 2 2017) (“Defendants seek to exclude evidence of their net worth unless and until [Plaintiff] 3 establishes a prima facie case for punitive damages.”). The Court is not persuaded by 4 Defendants that the Court should decide otherwise. 5 The Court GRANTS the Motion insofar as the evidence is presented at any other 6 point of trial beyond the punitive damages phase. Consistent with the Court’s ruling on 7 Plaintiffs’ Motion in Limine Five, where the Court precluded evidence of USAU’s financial 8 condition until the punitive damages phase of trial, the Court will do the same here. 9 Defendant Brandes’ financial condition is irrelevant at any other point in trial besides the 10 punitive damages phase. 11 V. Motion in Limine No. 5 (Exclude the National Transportation Safety Board’s 12 Report) 13 In their fifth Motion, Defendants seek to exclude the National Transportation Safety 14 Board’s (“NTSB”) report. ECF No. 165 at 14. This report is marked as Plaintiffs’ Exhibit 15 103. Id., Ex. C. The Court GRANTS the Motion. 16 “The NTSB issues two documents in relation to an investigation of an aircraft 17 accident in the United States: 1) a ‘factual accident report’ and 2) a ‘board accident report.’” 18 Britton v. Dallas Airmotive, Inc., No: 7-cv-547-EJL, 2011 WL 13196592, at *1–2 (D. 19 Idaho May 20, 2011). “The first is prepared by the investigator-in-charge and contains the 20 results of the investigator’s accident investigation.” Id. “The second report is the NTSB’s 21 final determinations of the accident including its probable cause finding.” Id. 22 There is a statutory bar to admission of the NTSB’s report under 49 U.S.C. 23 § 1154(b). Section 1154(b) states: “No part of a report of the Board, related to an accident 24 or an investigation of an accident, may be admitted into evidence or used in a civil action 25 for damages resulting from a matter mentioned in the report.” Section 835.2 of Title 49 of 26 the Code of Federal Regulations defines the “Board accident report” as the “report 27 containing the Board’s determinations, including the probable cause of an accident, issued 28 either as a narrative report or in a computer format.” The regulation also defines the 1 “[f]actual accident report” as “the report containing the results of the investigator’s 2 investigation of the accident” where “there is no statutory bar to . . . admission in litigation.” 3 Id. 4 Here, Plaintiffs’ Exhibit 103 is the entirety of the Board’s accident report—not the 5 investigator’s factual report. See ECF No. 165, Ex. C. Title “49 U.S.C. § 1154(b) does 6 not prohibit [Plaintiffs] from introducing an investigator’s factual incident report.” WM 7 Aviation, LLC v. Cessna Aircraft Co., No. 611-CV-2005-ORL18-GLK, 2013 WL 8 12392461, at *2 (M.D. Fla. July 2, 2013). Plaintiffs contend, while citing to cases holding 9 opposite, that the “factual information” in the Report is admissible. ECF No. 167 at 15 10 (citing WM Aviation, LLC, 2013 WL 12392461, at *2 (finding that the entire Board report 11 was excluded but allowing the investigator’s factual incident report)). This interpretation 12 of the statute, agreed with by some early circuit court opinions, has now been forgone by 13 circuit courts, as it is contrary to the statutory text. Chiron Corp. and PerSeptive Biosys., 14 Inc. v. Nat’l Transp. Safety Bd., 198 F.3d 935, 940 (D.C. Cir. 1999) (citing 49 C.F.R. § 15 835.2). The implementing regulation, 49 C.F.R. § 835.2, states that the “factual accident 16 report” is an investigators report of his investigation of the accident. Id. Therefore, 17 “[b]ecause this report is not ‘a report of the Board,’ it is not barred by the statute and is 18 therefore admissible.” Id. “[T]he only reports that are admissible are the factual reports 19 that investigators do, not the Board’s findings, either factual or probable cause. . . .” Id. 20 (cleaned up); see also Benna v. Reeder Flying Serv., Inc., 578 F.2d 269, 271 (9th Cir. 1978) 21 (“There is no question that it was error for the jury to view [the NTSB] accident report 22 since by statute the report is inadmissible evidence.”). 23 While Plaintiffs cite to one Fifth Circuit opinion, Curry v. Chevron, USA, 779 F.2d 24 272, 274 (5th Cir. 1985), finding the factual portions of the report could be distinguished, 25 the opinion is not “weighty authority, even for the limited rule enunciated, because there 26 are later decisions [from the Fifth Circuit] that adhere to the strict terms of the statute.” 27 Chiron Corp., 198 F.3d at 941; see also Campbell v. Keystone Aerial Surveys, Inc., 138 28 F.3d 996, 1001 (5th Cir. 1998) (“Federal law flatly prohibits the NTSB accident report 1 from being admitted into evidence in any suit for damages arising out of accidents 2 investigated by the NTSB.”). 3 The Court’s conclusion is further bolstered by the fact that the Board report itself 4 states that 49 U.S.C. § 1154(b) precludes the admission of any part of an NTSB report in a 5 civil action for damages related to the report and provides a link to “[a] factual report that 6 may be admissible under 49 U.S.C. § 1154(b).” ECF No. 165, Ex. C at 22; see also 7 Olympic Air, Inc. v. Helicopter Tech. Co., No. C17-1257-RSL, 2022 WL 823545, at *2 8 (W.D. Wash. Mar. 18, 2022) (excluding the entirety of the Board report because, among 9 other things, the factual accident report was separately linked on the NTSB’s database 10 website and the NTSB Report “bears a legend warning that 49 U.S.C. § 1154(b) ‘precludes 11 the admission into evidence or use of any part of an NTSB report related to an incident or 12 accident in a civil action for damages resulting from a matter mentioned in the report’”). 13 Therefore, the NTSB Board report, Exhibit 103, is inadmissible, but Plaintiffs may 14 introduce factual and investigative reports by the NTSB investigator, like the factual report 15 that the link in the Board report leads to, ECF No. 165, Ex C at 22. See Benavidas v. Telsa, 16 Inc., No. 21-cv-21940-BLOOM/Torres, 2025 WL 2029739, at *6 (S.D. Fla. July 20, 2025) 17 (disallowing plaintiffs from relying on any portion of the NTSB report) (collecting cases). 18 VI. Motion in Limine No. 6 (Exclude Use of FAA Records of Kitchens’ Airline 19 Transport Pilot Certificate) 20 In their sixth Motion, Defendants seek to preclude the use of FAA records regarding 21 the revocation of Kitchens’ Airline Transport Pilot certificate. ECF No. 165 at 16. 22 Specifically, Defendants seek to exclude the February 13, 2019, Emergency Order of 23 Revocation (Plaintiffs’ Exhibit 101) and the June 9, 2021, FAA Violation Letter (Plaintiffs’ 24 Exhibit 9). Id., Exs. D, E. The Court GRANTS IN PART, DENIES IN PART, and 25 RESERVES RULING IN PART the Motion. 26 The Court GRANTS the Motion insofar as the evidence will be presented to the jury 27 in the legal phase of trial. Any reference to the facts and circumstances surrounding the 28 February 2019 revocation of Kitchens’ Airline Transport Pilot certificate is irrelevant to 1 the issues to be tried and unduly prejudicial to Defendants under FRE 403. See Britton, 2 2011 WL 13196592, at *6 (finding that statements in an FAA report “do not go to prove 3 or disprove any of the issues the jury in this case will be tasked with deciding and the 4 unsupported inferences that may be drawn from this evidence is clearly unduly 5 prejudicial”). Plaintiffs’ state in their Opposition that this evidence tends to demonstrate 6 how “unethical and shady Scott Kitchens really was”—which is irrelevant to any of the 7 issues to be tried. ECF No. 167 at 16. The Emergency Order of Revocation can still be 8 referenced as evidence of its existence and to satisfy the mailbox rule—if Plaintiffs can 9 make that showing. However, the content of the revocation letter is irrelevant and 10 inadmissible. 11 Regarding the FAA Violation Letter, any probative value of this Exhibit has already 12 been stipulated to by the Parties. See Amended Pretrial Order at 17 (“The Federal Aviation 13 Administration (‘FAA’) had revoked Kitchens’ license on February 13, 2019, and from 14 that date forward he did not hold any certificates or ratings that would allow him to pilot 15 any aircraft.”). Therefore, Exhibit 9 is excluded in its entirety during the legal phase of 16 trial. 17 The Court DENIES the Motion insofar as the evidence will be tried to the bench as 18 this information is relevant to materiality. 19 The Court RESERVES RULING on the Motion insofar as the evidence will be 20 presented in the bad faith phase of trial. 21 VII. Motion in Limine No. 7 (Exclude Use of February 10, 2022, FAA Order of 22 Suspension Report for Russell) 23 In their seventh Motion, Defendants seek to exclude the February 10, 2022, FAA 24 Order of Suspension Report regarding Russell. ECF No. 165 at 18. This report is marked 25 as Plaintiffs’ Exhibit 8. Id., Ex. F. The Court GRANTS IN PART the Motion. 26 Unlike Kitchens, the Parties have not stipulated to the state of Russell’s certificate 27 at the time of the accident—therefore, this exhibit is relevant to whether Russell met the 28 definition of “pilot.” At the hearing, the Parties agreed that certain sections of Plaintiffs’ 1 Exhibit 8 can be redacted. Thus, the statement that “Your actions as described herein were 2 careless so as to endanger the life or property of another” must be redacted. See ECF No. 3 165, Ex. F ¶ 18. Further, any mention of Russell’s certificate suspensions as a result of the 4 accident also must be redacted. See id. at 1 (redacting from “The Federal Aviation 5 Administration (FAA) notified you . . .” to “After considering all the evidence in this matter 6 . . .”) and at 3–5 (redacting from “As a result, you violated the following. . .” to “Please 7 direct all communications to . . .”). The rest of Exhibit 8 is admissible. 8 VIII. Motion in Limine No. 8 (Exclude the Aircraft Operational Control Agreement 9 Between Defendants and Reference to “Competency” of Kitchens and Russell) 10 In their eighth Motion, Defendants seek to preclude any mention, evidence, fact, or 11 contention regarding the Aircraft Operational Control Agreement between Defendants 12 Aerospike and Brandes (Plaintiffs’ Exhibit 107). ECF No. 165 at 19, Ex. G. Defendants 13 also seek to preclude any reference or argument concerning the “competency” of Kitchens 14 and Russell in piloting the Aircraft on the date of the accident. Id. at 20. The Court 15 GRANTS IN PART and DENIES IN PART the Motion. 16 The Court GRANTS the Motion insofar as the evidence is introduced in the legal 17 and bad faith phases of trial. The discussion of Kitchens’ and Russell’s “competency” as 18 pilots—beyond the fact that they did not hold valid certificates on the day of the accident— 19 is irrelevant to any of the issues to be tried and has the potential of confusing the jury that 20 their competence is a prerequisite for coverage. Further, the Operating Agreement is 21 irrelevant to the meaning of “pilot” and the bad faith claim. The risk of jury confusion is 22 extremely high, as the jury may confuse the terms of the Operating Agreement with those 23 in the Policy. At the Motion in Limine hearing, Plaintiffs’ Counsel attempted to argue that 24 because Aerospike and Brandes are “consumers” of aviation insurance, their understanding 25 of the term “pilot” is probative of the meaning of the term in the industry. The Court is 26 unpersuaded by this argument and finds that any probative value is substantially 27 outweighed by the risk of misleading the jury and unfair prejudice. See Fed. R. Evid. 403. 28 1 The Court DENIES the Motion insofar as the evidence is tried to the bench, as it is 2 relevant to materiality. 3 IX. Motion in Limine No. 9 (Exclude Evidence of the Cause of the Accident) 4 In their ninth Motion, Defendants seek to preclude any mention, evidence, fact, or 5 contention regarding the cause of the accident. ECF No. 165 at 21. The Court GRANTS 6 IN PART and RESERVES IN PART. 7 The Court GRANTS the Motion insofar as the evidence is presented to the jury in 8 the legal phase of trial because evidence relating to the cause of the accident is irrelevant 9 and has a high likelihood of confusing the jury. The fact that Kitchens and Russell 10 contributed to the crash does not demonstrate whether Kitchens and Russell were “pilots” 11 within the customary usage of that term in the aviation insurance industry nor does it assist 12 the jury in defining “pilot.” 13 The Court also GRANTS the Motion insofar as the evidence is presented to the 14 bench because the Parties agreed at the Motion in Limine hearing that the cause of the 15 accident is irrelevant to materiality, as the accident occurred after the date of Policy 16 formation. 17 The Court RESERVES RULING on the Motion in so far as the evidence is 18 presented during the bad faith phase of trial. 19 X. Motion in Limine No. 10 (Exclude SOAR Reports and Any Associated 20 Testimony Concerning the Repairability of the Aircraft) 21 In their tenth Motion, Defendants seek to exclude the SOAR Reports and preclude 22 any associated testimony or argument concerning the repairability of the Aircraft and 23 related costs. ECF No. 165 at 22–23. Specifically, the itemization of damage and repair 24 estimate (Plaintiffs’ Exhibit 58) and the damage survey report (Plaintiffs’ Exhibit 59). ECF 25 No. 167 at 21. The Court RESERVES RULING on the Motion. 26 The Court will allow Plaintiffs an opportunity to present a witness with personal 27 knowledge. However, the Court notes that it may find that this evidence is properly the 28 subject of expert testimony. As Defendants point out, Plaintiffs have not designated an 1 expert to discuss the SOAR reports, ECF No. 165 at 23, and Smith has been precluded 2 from providing opinion on the repairability of the aircraft, U.S. Aviation Underwriters Inc., 3 2024 WL 2948626, at *25. See Fed. R. Civ. P. 37(c)(1); Yeti by Molly, Ltd. v. Deckers 4 Outdoor Corp., 259 F.3d 1101, 1106 (9th Cir. 2001) (“Rule 37(c)(1) gives teeth to [the 5 requirements of Rule 26(a)(2)(C)] by forbidding the use at trial of any information required 6 to be disclosed by Rule 26(a) that is not properly disclosed.”). 7 XI. Motion in Limine No. 11 (Exclude Evidence of Russell’s Failed Attempt to 8 Obtain His DA-EASy Type Rating and/or That He Crashed the Simulator) 9 In their eleventh Motion, Defendants seek to preclude any testimony or evidence 10 that Russell failed his initial attempt to obtain his DA-EASy type rating and that he crashed 11 the simulator during his Pilot Initial Training Course for the Subject Aircraft. ECF No. 12 165 at 23. Defendants also seek to exclude the email regarding the Training Center 13 Evaluator waiver request and retest of Russell (Plaintiffs’ Exhibit 5). Id., Ex. K. The Court 14 GRANTS the Motion. 15 This evidence is not relevant to any issue left to be decided and has the potential to 16 confuse the issues and jury. First, the reasons why Russell had limitations on his type rating 17 are irrelevant to whether he qualifies as a “pilot.” Second, the evidence is irrelevant to 18 materiality because at the time of Policy formation—the relevant time-period—the 19 simulator crash and failed attempt had not occurred. See ECF No. 165, Ex. K (showing 20 email date of September 27, 2020); see also U.S. Aviation Underwriters Inc., 2024 WL 21 2948626, at *9 (showing the relevant date for materiality statements/omissions as 22 September 11, 2020). Further, the Parties agreed at the Motion in Limine hearing that this 23 evidence is not relevant to materiality. 24 / / / 25 / / / 26 / / / 27 / / / 28 / / / 1 CONCLUSION 2 In light of the foregoing, the Court GRANTS IN PART, DENIES IN PART, and 3 || RESERVES RULING IN PART the Parties’ Motions in Limine (ECF Nos. 164, 165). 4 || The Court further SETS a telephonic status conference for Thursday, February 12, 2026, 5 || at 10:00 a.m., to discuss setting a trial date in this matter. 6 IT IS SO ORDERED. 7 ||Dated: February 3, 2026 9 on. Janis L. Sammartino 10 United States District Judge 1] 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28