                                                            NOT PRECEDENTIAL

                      UNITED STATES COURT OF APPEALS
                           FOR THE THIRD CIRCUIT
                                ____________

                                     No. 13-3595
                                    ____________

                               VERNON W. HILL, II,

                                                          Appellant

                                         v.

                   TD BANK, NA; COMMERCE BANCORP, LLC



                   On Appeal from the United States District Court
                            for the District of New Jersey
                        (District Court No.: 1-09-cv-03685)
                    District Judge: Honorable Robert B. Kugler


                              Argued September 9, 2014


       Before: RENDELL, GREENAWAY, JR. and SLOVITER, Circuit Judges


                         (Opinion filed: September 24, 2014)


Louis M. Barbone, Esquire
Edwin J. Jacobs, Jr., Esquire (Argued)
Arthur J. Murray, Esquire
Jacobs & Barbone
1125 Pacific Avenue
Atlantic City, NJ 08401

                          Counsel for Appellant
Joseph G. Antinori, Esquire
Susan M. Leming, Esquire
William M. Tambussi, Esquire
Brown & Connery
360 Haddon Avenue
P. O. Box 539
Westmont, NJ 08108

Joshua S. Bolian, Esquire
Mark T. Stancil, Esquire (Argued)
Robbins, Russell, Englert, Orseck, Untereiner & Sauber
1801 K. Street, N.W.
Suite 411-L
Washington, DC 20006

                          Counsel for Appellees




                                    OPINION


RENDELL, Circuit Judge:

      Vernon W. Hill, II (“Hill”), the former chairman and CEO of Commerce Bancorp,

Inc. (now Commerce Bancorp, LLC) (“Bancorp”), and Commerce Bank, N.A. (“Bank”),1

has sued Bancorp and Bank for breach of an employment agreement that triggered a

“golden parachute” payment when Hill was terminated. Bancorp informed Hill that it

could not make the golden parachute payment because it could not comply with the

certification requirement imposed by 12 C.F.R. § 359.4(a)(4) (“Golden Parachute




1
       Bancorp is the holding company; Bank is the wholly owned subsidiary. Bank has
since merged into TD Bank, N.A.
                                          2
Regulation”). After a nine-day jury trial, the jury returned a verdict in Bancorp’s favor.

The District Court denied Hill’s motion for a new trial.

       Hill has appealed several of the District Court’s orders. For the reasons set forth

below, we will affirm the rulings of the District Court.

                                       I. Background

       Because we write primarily for the benefit of the parties, we recite only the facts

necessary to the disposition of this appeal. In December 2006, the Office of the

Comptroller of the Currency (“OCC”) and the Board of Governors of the Federal Reserve

System (“FRB”) notified Bancorp and Bank that the OCC and FRB each were

conducting an investigation. The matters under investigation by the OCC and FRB

included: “[p]otential conflicts of interest arising out of CEO/COB Vernon W. Hill [II],

his relatives, for example Shirley Hill, Robert Hill, Vernon W. Hill [III] and close

business associates as well as other insiders and insider related parties or entities in

branch transactions.” (Suppl. App. 93.) On June 28, 2007, Bank and the OCC entered

into a consent order, and Bancorp terminated Hill (effective July 31, 2007). The consent

order “ensure[s] that actual or apparent conflicts of interest or unsafe or unsound

practices involving the construction or acquisition of branch offices do not occur in the

future” (App. 170), as the OCC was concerned, inter alia, about Bank’s relationship with

Interarch, Inc., which, as Hill has explained, is an architectural and design firm that Hill’s

spouse founded.




                                               3
       Hill thereafter sought his severance payment. Under the Golden Parachute

Regulation, in order for Hill’s severance payment to be made, Bancorp or Hill must

certify to the appropriate federal banking agency:

       [T]hat it does not possess and is not aware of any information, evidence,
       documents or other materials which would indicate that there is a
       reasonable basis to believe, at the time such payment is proposed to be
       made, that:
       (i) [Hill] has committed any fraudulent act or omission, breach of trust or
       fiduciary duty, or insider abuse with regard to [Bank] that has had or is
       likely to have a material adverse effect on [Bank]; [and]
       (ii) [Hill] is substantially responsible for . . . the troubled condition, as
       defined by applicable regulations of the appropriate federal banking
       agency, of [Bank] . . . .

12 C.F.R. § 359.4(a)(4). Once that certification is submitted to the appropriate federal

banking agency, the agency must then determine whether to approve the severance

payment: the agency may decide not to take Bancorp at its word, but rather investigate,

inter alia, whether Hill committed any fraudulent act or omission, breach of trust or

fiduciary duty, or insider abuse with regard to Bank. See id. § 359.4(b)(3). By

regulation, the payment cannot be made without this approval. See id. § 359.4(a)(1).

       Neither Bancorp nor Hill filed a certification to enable Hill to receive his golden

parachute payment, and, in January 2008, Hill filed this lawsuit. By the time of the jury

trial, only two counts remained: breach of contract and contractual indemnification, each

asserted against only Bancorp. Bancorp stipulated that the elements of the breach of

contract claim were satisfied but raised the affirmative defense of legal impossibility,

contending that the Golden Parachute Regulation made it impossible to pay Hill his




                                              4
golden parachute payment. The jury heard evidence relating to this defense and rendered

a verdict in favor of Bancorp.

                                       II. Discussion

       “We review the District Court’s evidentiary rulings principally for abuse of

discretion.” Stecyk v. Bell Helicopter Textron, Inc., 295 F.3d 408, 412 (3d Cir. 2002).

“We review questions of law de novo . . . .” Orabi v. Attorney Gen., 738 F.3d 535, 539

(3d Cir. 2014). Because none of the issues raised by Hill on appeal warrants reversal, we

will affirm.

    A. Whether Expert Testimony Should Have Been Permitted To Discuss
       Bancorp’s Financial Condition

       We will first address Hill’s argument that expert testimony was improperly

excluded from trial. This testimony was offered to show that Bancorp was not in a

“troubled condition.” Hill argues that the District Court erred as a matter of law in

determining, at the summary judgment stage, that Bank was in a “troubled condition” as a

result of the June 2007 OCC consent order, urging that he should have been permitted to

adduce testimony from financial experts Paul Allen Schott and Michael Piracci regarding

the financial condition of Bancorp.2


2
       In his notice of appeal, Hill does not list the March 1, 2012 order denying
summary judgment, notwithstanding that the summary judgment order is what
determined that Bank was in a “troubled condition.” See Fed. R. App. P. 3(c) (“The
notice of appeal must . . . designate the judgment, order, or part thereof being appealed.”).
However, “there are circumstances under which we may review an order not specified in
the notice of appeal . . . .” HIP Heightened Independence & Progress, Inc. v. Port Auth.,
693 F.3d 345, 351 (3d Cir. 2012). “[W]e can exercise jurisdiction over orders not
specified in the Notice of Appeal if: ‘(1) there is a connection between the specified and
unspecified orders; (2) the intention to appeal the unspecified order is apparent; and (3)
                                             5
       Pursuant to the statute on golden parachutes, “troubled condition” is defined at 12

U.S.C. § 1831i(f), which in turn provides that each appropriate federal banking agency

shall define the term by regulation. 12 U.S.C. § 1828(k)(4)(A)(ii)(III). The District

Court concluded that the relevant regulation was a Federal Deposit Insurance Corporation

(“FDIC”) regulation, which defines “troubled condition” as, inter alia, “any insured state

nonmember bank that . . . [i]s subject to a cease-and-desist order or written agreement

issued by either the FDIC or the appropriate state banking authority that requires action to

improve the financial condition of the bank.” 12 C.F.R. § 303.101(c)(3). Hill urges that

the second part of this definition—i.e., “requires action to improve the financial condition

of the bank”—was not met.

       However, we conclude that the District Court applied the wrong regulation in

deciding whether Bank was in a “troubled condition.” Section 303.101(c) applies only

when the FDIC is the appropriate regulatory agency and the bank is a state nonmember




the opposing party is not prejudiced and has a full opportunity to brief the issues.’”
Sulima v. Tobyhanna Army Depot, 602 F.3d 177, 184 (3d Cir. 2010) (quoting Polonski v.
Trump Taj Mahal Assocs., 137 F.3d 139, 144 (3d Cir. 1998)).
       Here, Hill has appealed the order excluding expert testimony, which is inherently
connected with the summary judgment order because it is based on that earlier order’s
determination that Bank was in a “troubled condition.” Hill’s intention to appeal the
summary judgment order is apparent because the section of Hill’s brief on this issue is
focused on whether the summary judgment order was correct in concluding that Bank
was in a “troubled condition.” Bancorp is not prejudiced because Bancorp has fully
briefed this issue. The parties were not even aware of this procedural difficulty until we
mentioned it at oral argument. Thus, we will consider whether Bank was in a “troubled
condition.”
                                             6
bank. Id. § 303.101(c). Here, Bank was not a state nonmember bank. Instead, as Hill

concedes, Bank was a national banking association regulated by the OCC.3

       The District Court’s error does not help Hill, as the correct OCC regulation, 12

C.F.R. § 5.51(c)(6), is more damaging for him than the FDIC regulation. Under the OCC

regulation, “[t]roubled condition” means, inter alia, a “national bank” that “[i]s subject to

a cease and desist order, a consent order, or a formal written agreement, unless otherwise

informed in writing by the OCC.” 12 C.F.R. § 5.51(c)(6)(ii). It contains no caveat

regarding whether the consent order requires the bank to take action to improve its

financial condition. Id. Here, the OCC and Bank entered into a consent order on June

28, 2007, and Bancorp terminated Hill on June 28, 2007, effective July 31, 2007. The

OCC did not inform Bank in writing that Bank was not in a “troubled condition.” Thus,

by definition, Bank was in a “troubled condition.” See id.

       Given the applicable definition, the District Court did not abuse its discretion in

excluding expert testimony that Hill wished to use to cast doubt on whether Bancorp was

in fact in a “troubled condition.”


3
        Hill urges that the OCC regulation does not apply because the OCC does not
regulate Bancorp and because the regulation purportedly relates only to changes in
officers and directors. These arguments are easily dismissed. By virtue of 12 C.F.R.
§ 359.0(b), the OCC regulation also applies to Bancorp. See 12 C.F.R. § 359.0(b)
(applying the golden parachute provisions derivatively to “healthy holding companies
which seek to enter into contracts to pay or to make golden parachute payments to
[institution-affiliated parties] of a troubled insured depository institution subsidiary”).
Hill’s argument that the OCC regulation, 12 C.F.R. § 5.51(c)(6), concerns only changes
in directors and officers under 12 U.S.C. § 1831i is belied by Congress’s decision to
include a cross-reference in the statute on golden parachutes, thereby borrowing the
“definition in the regulations prescribed pursuant to [12 U.S.C. § 1831i(f)].” 12 U.S.C.
§ 1828(k)(4)(A)(ii)(III).
                                              7
   B. Whether the District Court Abused Its Discretion in Permitting Testimony

       Prior to trial, Hill moved to conduct more than ten depositions of Bancorp’s

former directors to explore Bancorp’s impossibility defense. The magistrate judge denied

this motion. After discovery closed, Bancorp sought to call the former directors as trial

witnesses. Hill objected, and the magistrate judge determined that it would be unfair and

prejudicial to permit the directors to testify at trial, considering that a prior ruling had

barred Hill from taking their depositions. The magistrate judge ruled, however, that the

directors could testify for Bancorp at trial if Bancorp allowed Hill to take a two-hour

deposition of each individual witness. The magistrate judge concluded that Hill would

not be prejudiced by permitting the directors to testify if he were allowed to depose them

in advance, as Hill then would not suffer unfair surprise. Hill appealed the magistrate

judge’s decision, and the District Court affirmed.

       Because Hill was permitted to depose the directors and in fact did depose them

before trial, this issue is easily resolved. The magistrate judge and District Court did not

abuse their discretion in allowing the former directors to testify at trial. The magistrate

judge properly applied the five-factor test identified in Meyers v. Pennypack Woods

Home Ownership Ass’n, 559 F.2d 894, 904-05 (3d Cir. 1977), overruled on other

grounds by Goodman v. Lukens Steel Co., 777 F.2d 113 (3d Cir. 1985) in deciding

ultimately to permit the directors’ testimony, considering: (1) the prejudice or surprise to

the party against whom the evidence was offered; (2) the ability of the injured party to

cure the prejudice; (3) the likelihood the admission of the late evidence would disrupt the

orderly and efficient trial of the case or of other cases in the court; (4) the bad faith or

                                               8
willfulness in failing to comply with the District Court’s orders; and (5) the importance of

the evidence to the proffering party. He also considered, “the fact that ‘[t]he Third

Circuit has, on several occasions, manifested a distinct aversion to the exclusion of

important testimony absent evidence of extreme neglect or bad faith on the part of the

proponent of the testimony.” (App. 9 (quoting ABB Air Preheater, Inc. v. Regenerative

Envtl. Equip. Co., 167 F.R.D. 669, 671 (D.N.J. 1996)).)

       On appeal, Hill focuses exclusively on one of these five factors: bad faith in

preventing Hill from deposing the directors earlier.4 We find no evidence of bad faith in

the record and would, in any event, be hard-pressed to reverse for abuse of discretion

based on one factor of a five-factor test. The magistrate judge’s requirement that Hill

first be permitted to depose the directors before they testified cured any prejudice, and the

trial was not disrupted. The District Court did not abuse its discretion in affirming the

magistrate judge’s ruling.

    C. Whether Denying the Motion To Amend the Final Pretrial Order Was an
       Abuse of Discretion

       Hill argues that the District Court abused its discretion in denying Hill’s motion to

amend the final pretrial order to include the former directors as witnesses in Hill’s case-

in-chief. The magistrate judge concluded that what the former directors said in their

depositions was “not a surprise” and that the directors’ testimony provided “just


4
       Specifically, Hill alleges that Bancorp engaged in a “bait and switch” tactic by
objecting to Hill’s earlier request to depose the directors. Originally unable to depose the
directors, Hill instead deposed Bancorp’s Rule 30(b)(6) representative. Hill claims that
the directors’ testimony contradicted the Rule 30(b)(6) representative’s testimony.
Bancorp persuasively argues that the witnesses’ testimony was not contradictory.
                                             9
cumulative evidence, in the Court’s view.” (Suppl. App. 90.) The District Court

affirmed, finding that Hill had known “for years that these members of the Board would

say that they wanted the Bank to pay Mr. Hill.” (Id. at 104.)

       A court may grant leave to amend a final pretrial order “only to prevent manifest

injustice.” Fed. R. Civ. P. 16(e). Here, Hill has failed to show that manifest injustice

ensued. Bancorp had identified the former directors in its Rule 26 disclosures, and Hill

was still able to cross-examine the directors at trial. Considering that Hill’s motion to

amend was made on the eve of trial, we hold that the refusal to amend the final pretrial

order was not an abuse of discretion.

   D. Whether Giving the Supplemental Jury Instruction Was an Abuse of
      Discretion

       The District Court’s jury instructions provided that Bancorp “may make a Golden

Parachute payment to plaintiff, Vernon Hill, of the monies owed Mr. Hill under the

party’s employment agreement only if the applicable Federal banking agencies determine

that the payment is permissible.” (2d Suppl. App. 33.) After hearing this and other

instructions, the jury began deliberations. More than an hour into the jury’s deliberation,

the jury came to the Court with a question: “If we award for the plaintiff does this bypass

federal approval?” (Suppl. App. 234.) The District Court called the jury back into court

and stated, “The best way to answer that question is to tell you [12 C.F.R. §] 359 of

which you’re all experts now, states that the Bank cannot pay money to Mr. Hill without

approval of the Federal regulators. I hope that answers your question.” (Id. at 236.) Hill




                                             10
urged that this instruction was error and that a new trial was required. The District Court

disagreed.

       This Court reviews supplemental jury instructions for abuse of discretion, meaning

that Hill “must show that the [District] Court’s action was ‘arbitrary, fanciful or clearly

unreasonable.’” United States v. Jackson, 443 F.3d 293, 297 (3d Cir. 2006) (quoting

Stich v. United States, 730 F.2d 115, 118 (3d Cir. 1984)). We “review the supplemental

instruction given not in artificial isolation, but . . . in the context of the overall charge.”

Id. (alteration in original) (quoting United States v. Brennan, 326 F.3d 176, 192 (3d Cir.

2003)) (internal quotation marks omitted).

       In denying Hill’s motion for new trial, the District Court gave myriad reasons to

explain why the supplemental jury instruction was not improper. For instance, the

supplemental jury instruction did not inject an irrelevant issue into the case, as “[t]he one

thing that’s crystal clear about this case is that everybody talked about [12 C.F.R.

§] 359.” (Suppl. App. 239.) Further, “there’s absolutely no evidence whatsoever that the

answer that [the District Court] gave in any way had any bearing whatsoever on the

[verdict],” and “[n]o evidence whatsoever” that the supplemental jury instruction was

incorrect. (Id. at 239-40.) According to the District Court, the supplemental jury

instruction served a purpose of correcting a statement that Hill’s counsel made at the end

of his summation that the jurors could have misinterpreted as “an invitation to ignore

[§] 359’s prohibition,” which would have been impermissible. (Id. at 241.) Further, “I

don’t know how the jury could possibly feel that I was telling them they couldn’t award a

verdict on monetary damages . . . .” (Id.)

                                               11
       The District Court did not abuse its discretion in giving the supplemental jury

instruction. The District Court’s supplemental jury instruction was consistent with a

prior jury instruction—specifically that Bancorp “may make a Golden Parachute payment

to [Hill] of the monies owed [Hill] under the party’s employment agreement only if the

applicable Federal banking agencies determine that the payment is permissible.” (2d

Suppl. App. 33.) Hill never objected to this prior jury instruction, nor did he offer an

instruction in order to elucidate to the jury Hill’s position that there was an alternative

way by which Hill could be paid. Considering the full context and prior jury instruction,

the District Court’s reference to the regulation that was central to the trial is not so

arbitrary, fanciful, or unreasonable as to constitute an abuse of discretion.

                                       III. Conclusion

       We affirm: (1) the August 1, 2013 order denying Hill’s motion for a new trial; (2)

the May 22, 2013 order entering final judgment in favor of Bancorp on the jury verdict;

(3) the District Court’s trial rulings regarding admission of evidence, jury instructions

and the jurors’ question; (4) the April 25, 2013 order denying Hill leave to file for

summary judgment; (5) the April 19, 24, and 26, 2013 orders denying Hill’s motions to

amend the joint final pre-trial order; (6) the February 15, 2013 order denying Hill’s

motion for reconsideration and ordering other relief; and (7) the April 26, 2012 order

regarding admissibility of expert testimony. Further, we affirm the March 1, 2012 order

deciding summary judgment to the extent that it is at issue in this appeal.




                                              12
