Plaintiffs Nathan Connolly and the Estate of Shani Mott (collectively “Plaintiffs”) alleged that Defendants Shane Lanham and 20/20 Valuations, LLC (collectively “Defendants”) racially discriminated while performing an appraisal of Plaintiffs’ home.
Defendants have counter-sued for defamation. Each party has offered an expert to provide testimony regarding the propriety of Defendants’ appraisal of Plaintiffs’ home. Plaintiffs sought to strike what they believe is an impermissible sur-rebuttal by Defendants’ appraisal expert, Tobias Peter. Defendants sought to exclude the opinions of Plaintiffs’ appraisal expert, Dr. Junia Howell in their entirety.
Housing Expert Witness
Tobias Peter is a senior fellow and the codirector of the American Enterprise Institute’s Housing Center, where he focuses on housing risk and mortgage markets. Working closely with Edward Pinto, codirector of the AEI Housing Center, Peter has coauthored a variety of reports on housing policy, specifically on the impact of federal policy on housing demand and homeownership, housing finance risks, and first-time home buyers.
He has a master’s in public policy from the Harvard Kennedy School and a bachelor’s degree in history and applied economics from the College of St. Scholastica.
Sociology Expert Witness
Dr. Junia Howell is a visiting Assistant Professor of Sociology at the
University of Illinois, Chicago. She obtained a Ph.D. in Sociology from Rice
University in 2017.
Her research interests include urban sociology, race and ethnicity,
inequality and mobility, and quantitative methodology. She has published several articles about race and housing.
Discussion by the Court
Plaintiffs’ Motion To Strike
Plaintiffs have asked this Court to strike a supplemental report by Defendants’ appraisal expert, Tobias Peter, as an improper sur-rebuttal.
Plaintiff’s rebuttal expert reports— including a report written by Junia Howell in rebuttal to a report by Defendants’ expert, Peter—were due on September 4, 2024.
Howell’s rebuttal report, which featured substantial data analysis, and its underlying materials was submitted to the Defendants on the due date. Defendants deposed Howell on September 11, 2024. The following day, September 12, 2024, Defendants sent Plaintiffs a thirteen-page document styled as a “supplement” by Peter, which responded to Howell’s data analysis.
Howell filed her opening report in June, 2024, which consisted of an analysis of Defendants’ appraisals over several years, comparing their work in White neighborhoods to their work in otherwise similar non-White neighborhoods. Defendants’ opening expert reports were due in August, 2024. Their expert, Peter, refuted Howell’s analysis by comparing it to an automated valuation model (“ AVM”) and stating that he believed her findings were without foundation.
Defendants also provided Peter’s underlying data to Plaintiffs. In her September 4, 2024 rebuttal report, Howell used AVM data she created from publicly available information from Zillow.com (Zestimates).
Analysis
Essentially, Defendants argued, “it was not possible for Defendants’ expert to address and rebut Plaintiffs’ expert’s opinions on the Zillow AVM data until after Plaintiffs’ expert disclosed her opinions.” But perhaps more important, the deadline to supplement Rule 26(e)(2) expert disclosures was one week after the last expert deposition. The Defense provided Plaintiffs with Peter’s supplement well before that deadline, and over a month before Peter’s deposition.
This Court agreed that the supplement was both timely given the parties’ agreed-upon schedule and appropriate under the circumstances. Peter responded to previously unraised arguments that he could not have responded to in his initial report. By submitting his supplement well before his own deposition, Plaintiffs had the opportunity to question him regarding the supplement.
Defendants’ Motion To Exclude
Howell issued her opening report on June 21, 2024. She conducted a data analysis of 1,996 appraisals performed by Defendants and compared them with each other and with other appraisers’ work.
Howell described her report as essentially divided in three sections:
“So the first bucket is looking just at Lanham’s appraisals and looking to what extent there is a racial difference.
The second bucket is looking at his appraisals compared to another evaluation of the neighborhood. And that has like — that has four different ways of looking at that. One of those is FHFA data. One is his own evaluations of neighborhood median income. One is now added from the rebuttal, the AVM, and the fourth is the contract price. So that’s that middle bucket.
The third bucket are examining to what extent his patterns of behavior in selecting comps and making adjustments are also racialized.”
“Buckets” One and Two
Defendants argued that errors in Howell’s analysis rendered her conclusions irrelevant, and they thus should be excluded under Rule 702.
Howell used a regression model to conclude that “Defendant[s] systematically appraised homes in census blocks of color as less valuable than comparable homes in comparable White census blocks.”
As a general matter, Howell found, homes in predominantly White neighborhoods in the Baltimore area sold for $165,000 more than comparable homes in neighborhoods predominantly populated by non-White people. Howell’s first opinion was, essentially, that Defendants generally appraised homes in White neighborhoods as more valuable than comparable homes in non-White neighborhoods.
Howell offered five opinions within her second “bucket.” Each of those opinions tends to support the theory that Defendants appraised homes in non-White neighborhoods at a lower value than average, and homes in White neighborhoods at a higher value than average.
Defendants argued that to the extent there is a differential between Defendants’ appraisals in White and non-White neighborhoods, such a differential exists for all appraisals, and it is therefore misleading to use this statistic alone to suggest that Defendants discriminated against non-White homeowners.
Rather than striking her testimony, the Court believed the better course of action is to weigh at summary judgment if Howell’s analysis is sufficient to create a genuine issue of material fact regarding whether the Defendants appraised Plaintiffs’ home in a racially discriminatory manner.
“Bucket” Three
Howell opined that Defendants did not comply with the Uniform Standards of Professional Appraisal Practice (USPAP), which Maryland appraisers are required to follow, and their own practices in other appraisals.
She continued that had they followed USPAP and their own standard practices, their valuation would have been over $600,000.
Plaintiffs rejoin that Howell’s research on housing qualifies her to opine on appraisals. Because she is a leading expert on racial inequities in housing, they continue, and her research has included studies of appraisal practices, she has the experience required to opine on appraisals. She has spoken at conferences and written articles discussing appraisal.
While this Court does not diminish Howell’s substantial expertise in housing, and even some aspects of appraisal, she is a sociologist, not an appraiser. While she certainly has expertise in sociology such that it is proper for her to offer statistical analysis regarding appraisals, she is not qualified to offer opinions on the propriety of an appraisal (including the specific selection of comparative properties and making adjustments) or an appraisal’s compliance with professional standards.
By contrast, the Court held that Howell may permissibly opine that, based on her statistical analysis, Defendants deviated from their general practices in conducting this appraisal. She of course may not opine as to what Defendants should have done in the appraisal, but Plaintiffs made clear that she is not making any normative argument. As above, Defendants’ critiques of the approach Howell took in her assessment bear on its usefulness in determining whether summary judgment is warranted, and potentially whether liability is appropriate. The Court will consider those arguments in assessing whether Howell’s opinion contributes to the creation of a genuine issue of material fact.
Held
- The Court denied the Plaintiffs’ motion to strike a supplemental report by Defendants’ appraisal expert, Tobias Peter, as an improper sur-rebuttal.
- The Court granted the motion to exclude Junia Howell’s opinions insofar as it applied to Howell opining on the validity of the appraisal of Plaintiffs’ home and whether that appraisal comported with professional standards or norms for appraisers. The motion was denied as to Howell’s opinions based on her statistical analysis comparing Defendants’ work in White neighborhoods with their own work in non-White neighborhoods and comparing Defendant’s work in non-White neighborhoods to the work of other appraisers.
Key Takeaway:
This Court does not find that an expert must always be a certified appraiser to opine on any facet of appraising. But even under a standard favoring inclusion, this Court cannot find that Howell is qualified to assess whether an appraisal was done in a manner consistent with professional standards and regulations without having ever conducted an appraisal or been subject to those standards.
Case Details:
| Case Caption: | Connolly Et Al V. Lanham Et Al |
| Docket Number: | 1:22cv2048 |
| Court Name: | United States District Court, Maryland |
| Order Date: | April 17, 2025 |
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