Expert Witness Profiler

Tag: Damages

  • Insurance Coverage Expert Witness Not Allowed to Opine on the Specific Costs He Identified in his Estimate

    Insurance Coverage Expert Witness Not Allowed to Opine on the Specific Costs He Identified in his Estimate

    In March 2019, Zeqa, the Plaintiff bought a two-story home on 3 acres in Lincoln Park, New Jersey, for $310,000. Before the purchase, an inspection revealed pre-existing water damage, which remained unaddressed after Zeqa took ownership. Hanover, the Defendant insured the property under a homeowner’s policy, covering the dwelling, personal property, and living expenses, with specific coverage limits. The policy took effect on March 29, 2019. 

    On October 2, 2019, the property experienced water damage from ruptured supply lines connected to bidet attachments. The increased water pressure was caused by the Water Authority’s seasonal fire hydrant flushing. Zeqa promptly notified Hanover, who hired ServPro for remediation. However, ServPro was released due to electrical issues before completing any work. Zeqa then hired Quality Air Care (QAC) for remediation without Hanover’s explicit authorization. 

    The parties disagreed on the damage extent and necessary repairs. Hanover argued that QAC’s work was excessive and unauthorized, while Zeqa claimed it was essential to mitigate damage under the policy. Hanover paid Zeqa a total of $100,280.55 for various damages and offered additional amounts for emergency water mitigation and replacement costs. The dispute centered on the scope of covered losses and the necessity of QAC’s extensive remediation work. Zeqa contended that Hanover’s payments were insufficient and that additional funds should have been released. Furthermore, Hanover argued that Kevin Kaufmann, Zeqa’s public adjuster expert, should be excluded under Federal Rule of Evidence 702, challenging his qualifications to opine on causation and coverage. 

    Insurance Coverage Expert Witness 

    Kevin Kaufmann is a seasoned expert in property adjustment with extensive experience in the field. He completed his Bachelor of Business Administration (B.B.A.) from Temple University in 1987, following his Associate’s degree in Liberal Arts from Bucks County Community College. 

    Kaufmann has been serving as the President of Property Adjustment Corporation since November 1989, where he has been instrumental in leading the company’s operations and providing expert property adjustment services.

    Fortify your strategy by reviewing a Challenge Study detailing grounds for excluding Kevin Kaufmann’s expert testimony. 

    Discussion By the Court 

    1. Qualifications of the Expert 

    The Court addressed Hanover’s argument that Zeqa’s public adjuster expert, Kevin Kaufmann, was not qualified to opine on causation or coverage. It disagreed, noting that the “specialized knowledge” required for an expert could encompass a broad range of knowledge, skills, and training in the subject matter. The Court found Kaufmann to possess such qualifications. Specifically, it highlighted that Kaufmann had worked as a licensed public adjuster since 1990 and as a claims adjuster for two insurance companies from 1987 to 1989. The Court recognized that Kaufmann had investigated hundreds of water damage claims to determine the cause of damage and coverage under insurance policies. It also noted his significant education and training, including courses in building damage restoration and property claims. 

    The Court dismissed Hanover’s argument that Kaufmann should be excluded because he was not an engineer. It cited the standard that an expert need only have “skill or knowledge greater than the average layman” to opine on the issues in his report. The Court found that Kaufmann easily met this standard. It also addressed Hanover’s reference to the Balu v. Cincinnati Ins. Co. case, finding it unpersuasive. The Court distinguished Balu, noting that unlike the expert in that case, Kaufmann did have expertise in identifying the cause of damage. 

    Furthermore, the Court rejected Hanover’s unsupported claim that Kaufmann’s expertise was limited to evaluating repair costs rather than determining how property was damaged. It noted that Kaufmann’s own statements contradicted this assertion. Lastly, the Court dismissed Hanover’s argument about Kaufmann’s use of the phrase “sudden and accidental,” stating that this went to credibility rather than qualifications and could be addressed through cross-examination. 

    2. Reliability of Causation Analysis 

    Despite finding Kaufmann qualified, the Court agreed with Hanover that his causation analysis was unreliable and would not assist the trier of fact. The Court identified a significant flaw in Kaufmann’s methodology. It noted that Kaufmann had inspected the property after remediation work had started and the house had been “gutted.” In his deposition, Kaufmann admitted he could not confirm if all the gutted areas had been damaged and needed repair due to water intrusion. Despite this uncertainty, Kaufmann included all these repairs in his estimate and opined that they all related to the Incident. 

    Based on this admission, the Court found that Kaufmann had no reliable basis to opine that all the repair work included in his estimate related to the Incident. The Court concluded that Kaufmann’s opinion on causation was unreliable and would not be helpful to the jury. Consequently, it ruled that Kaufmann could not testify about whether all the repair work in his estimate was caused by the water intrusion. 

    3. Opinion on Policy Coverage 

    The Court’s analysis of Kaufmann’s opinions on policy coverage was nuanced. It disagreed with Hanover’s argument that Kaufmann should be precluded from testifying that the loss he identified was covered by the Policy because it constituted an inadmissible legal conclusion. The Court noted that while Rule 704 prohibits experts from opining about ultimate legal conclusions or legal standards, Kaufmann’s opinions did not cross this line. His statements about policy coverage did not invade the Court’s role in instructing the jury on the law. 

    However, the Court did find that Kaufmann’s opinion on whether the specific costs he identified were covered under the Policy was inadmissible under Rule 702. The Court made several distinctions in its ruling. It determined that Kaufmann could testify about his observations and findings from his review and inspection of the Property. He could discuss the types of losses covered under the Policy and opine on whether damage caused by the Incident qualifies as a covered loss in general terms. However, Kaufmann could not testify about what specific damage was caused by the Incident, nor could he opine on whether the specific costs he identified in his estimate were covered under the Policy. 

    Held 

    The Court found Kaufmann qualified to testify as an expert based on his experience as a public adjuster but excluded parts of his testimony. It ruled his causation analysis unreliable since he inspected the property after remediation work started, making it difficult to confirm damage from the Incident. Kaufmann was allowed to testify on general policy coverage but barred from discussing specific damage or costs due to his inadmissible causation opinion. The Court limited his testimony to ensure reliability and usefulness to the jury. 

    Key Takeaways: 

    1. Pre-existing property damage can heavily impact insurance claims and disputes. 
    1. Expert testimony may be limited if deemed unreliable, even with qualified experts. 
    1. Inspections after remediation work can compromise the ability to assess original damage. 
    1. Clear communication between insurers and policyholders about repairs is crucial. 
    1. Differentiating incident-related damage from pre-existing issues is vital in insurance claims. 

    Case Details:

    Case Caption: Zeqa V. The Hanover Insurance Company
    Docket Number: 2:21cv10066
    Court: United States District Court for the District of New Jersey
    Order Date: September 9, 2024
  • Accident Reconstruction Expert Barred From Testifying Due to Surprise Opinions

    Accident Reconstruction Expert Barred From Testifying Due to Surprise Opinions

    Elmedin Tinjak has been a life-long cyclist. On June 20, 2020, the carbon fiber fork of his brand-new Bianchi bicycle failed, causing him to crash face-first on the pavement. Tinjak was taken to Riverside Methodist Hospital, where he was treated for a concussion, chest contusions, a fractured vertebra, and multiple complex facial lacerations. 

    The injuries Tinjak sustained that day continue to affect him. He struggles to do things he was once able to do, such as ski and play golf. He can no longer ride his bike for long periods of time, play sports with his kids for long periods of time, or stand for more than 30-45 minutes. The Tinjaks filed suit against the against the bike’s manufacturer, Cycleurope USA, Inc. dba Bianchi USA., seeking damages for economic and non-economic loss suffered as a result of the crash.

    The Tinjaks sought to exclude Greg Dubois as an expert witness for failure to comply with the expert disclosure requirements. 

    Accident Reconstruction Expert Witness

    Greg DuBois manages the Materials and Product Testing Department of CTL Engineering and provides consulting services in the areas of failure analysis, accident reconstruction and product testing.

    Want to know more about the challenges Greg DuBois has faced? Get the full details with our Challenge Study report. 

    Discussion by the Court

    Courts within the Sixth Circuit consider five factors to determine whether a party’s noncompliant disclosure was harmless or substantially justified:

    (1) Surprise to the party against whom the evidence would be offered;

    (2) Ability of that party to cure the surprise;

    (3) Extent to which allowing the evidence would disrupt the trial;

    (4) Importance of the evidence; and

    (5) Non-disclosing party’s explanation for its failure to disclose the evidence.

    Bianchi does not address any of the above mentioned factors; instead, it stresses that the Tinjaks knew Dubois had been retained as an expert as early as August 2020.  Although Bianchi asserted that its counsel “was of the impression that [Dubois’s December 18, 2020 report] had been supplied to Plaintiff counsel prior to [his] involvement in the litigation,” it offered no facts that would justify counsel’s mistaken impression.

    The Court’s own consideration of the five factors leads it to conclude that Bianchi’s noncompliance with the expert disclosure requirements of Rule 26(a) and the Court’s Preliminary Pretrial Order was neither harmless nor substantially justified. First, the Tinjaks were surprised by the substance of Dubois’ opinions, even if they were not surprised by his identity. Second, because the opinions were disclosed after the discovery period closed, the Tinjaks were unable to cure the surprise. Third, allowing Dubois’ opinions would fairly require the Court to re-open discovery in this years-old case. Fourth, although the underlying facts are such that expert testimony would likely be very important, Bianchi offers the Court no insight into the substance of Dubois’ primary opinions. And finally, Bianchi’s earlier-discussed explanation for its failure to comply is grossly insufficient.

    Held

    The Court excluded Greg Dubois as an expert witness for failing to comply with the expert disclosure requirements. 

    Key Takeaway:

    Expert disclosures go beyond just the expert’s identity; a party must also disclose the expert’s written report. When a party fails to comply with Rule 26(a)’s expert disclosure requirements, Rule 37(c) precludes the noncompliant party from using the “information or witness to supply evidence on a motion, at a hearing, or at a trial, unless the failure was substantially justified or is harmless.” The party seeking to avoid the Rule 37(c) sanction—here, Bianchi—bears the burden of showing that its failure to comply with the expert disclosure requirements was harmless or substantially justified. However, Bianchi’s explanation for its failure to comply is grossly insufficient.

    Case Details:

    Case Caption: Tinjak Et Al V. Bianchi Usa Inc/Cycleurope Usa Incs Et Al
    Docket Number: 2:22cv2853
    Court: United States District Court, Ohio Southern
    Order Date: September 16, 2024
  • Accounting Expert Witness’ Testimony is Not Relevant to Any Claim for Damages 

    Accounting Expert Witness’ Testimony is Not Relevant to Any Claim for Damages 

    Defendants Dahv Kliner and Roger Farrow were former employees of JDS Uniphase, Plaintiff Lumentum’s predecessor. They had signed an “Employee Proprietary Information and Inventions Agreement” with the company which prohibited them from disclosing JDS Uniphase’s proprietary information to anyone outside the company.

    Kliner and Farrow left JDS Uniphase in 2012 and 2013, respectively, to join Defendant nLIGHT. Plaintiff Lumentum later claimed that Kliner and Farrow used JDS Uniphase’s proprietary information to help nLIGHT secure two types of patents: the “adjustable beam patents” and the “triple-clad fiber patents.” Lumentum also alleged that nLIGHT used these patents to develop fiber laser products, including the “Corona” and “AFX” models.

    In 2022, Lumentum filed a lawsuit, asserting breach-of-contract claims against Kliner and Farrow.

    To support its breach-of-contract claims, Lumentum intended to present testimony from its damages expert witness, Donald Gorowsky, on three topics:

    (1) Kliner and Farrow’s total compensation from JDS Uniphase,

    (2) their compensation from nLIGHT, and

    (3) the total revenues and gross profits from nLIGHT’s Corona fiber laser products.

    Defendants nLIGHT, Dahv Kliner, and Roger Farrow moved to exclude Gorowsky’s testimony, arguing that it is unnecessary and unreliable.

    Accounting Expert Witness

    Donald Alan Gorowsky, C.P.A., J.D., has more than 40 years of combined experience in audit, accounting, finance, general management, financial consulting, and expert witness services. Gorowsky has specialized in financial consulting and expert witness services since 1990. As a financial expert on damages, Gorowsky provides assistance to attorneys in a variety of litigation matters and disputes involving many types of claims including business litigation, employment, intellectual property infringement, misappropriation of trade secrets, breach of contract, insurance claims and forensic accounting. Don also has significant experience with employment disputes involving financial advisors in the securities industry (FINRA).

    Want to know more about the challenges Donald Alan Gorowsky has faced? Get the full details with our Challenge Study report. 

    Discussion by the Court

    A. Defendants’ Argument

    Defendants sought to exclude Gorowsky’s testimony, arguing it was both unnecessary and unreliable. They contended that Gorowsky’s opinions were irrelevant since Lumentum could not legally claim the types of damages Gorowsky would address. They also pointed out that there was no claim for monetary damages against nLIGHT. Consequently, Gorowsky’s opinions on nLIGHT’s revenues and profits could be misinterpreted as evidence of damages against nLIGHT, rather than the individuals involved in the breach of contract.

    B. Plaintiff’s Counterargument

    Lumentum countered that Gorowsky’s testimony was essential for proving damages related to unjust enrichment. Lumentum claimed it was entitled to some of Kliner’s and Farrow’s compensation from JDS Uniphase and nLIGHT due to their alleged breach of non-disclosure agreements and the subsequent use of proprietary information. They argued that Gorowsky’s insights on calculating compensation and revenues would assist the jury in determining damages.

    C. Defendants’ Rebuttal

    Defendants argued that Gorowsky’s testimony was irrelevant and unsupported by both law and fact. They maintained that California law did not allow for recovery of compensation earned during employment for breaches occurring afterward. Additionally, they stated that nLIGHT’s profits did not benefit Kliner and Farrow, and no evidence suggested they received a portion of nLIGHT’s profits.

    D. Court’s Analysis

    i) Kliner and Farrow’s total compensation from JDS Uniphase

    The Court observed that Lumentum’s request could set a troubling precedent by seeking to recover salaries and benefits paid over a decade ago based on a single breached provision. California’s Labor Code prohibits employers from reclaiming wages already paid. The statute broadly defines wages to include all forms of compensation and benefits, and Section 221 prevents recovery of these from past employment.

    A relevant case, DHR Int’l Inc. v. Charlson, illustrated that recovery of paid bonuses was barred by the same legal principle. Similarly, since Kliner and Farrow had earned their salaries and benefits from JDS Uniphase, Lumentum could not reclaim these amounts as damages.

    The Court also noted that contract damages are generally limited to what was foreseeable at the time the contract was made. California law supports the notion that employers cannot recover wages paid during the period of employment unless expressly stated in the contract. Thus, Lumentum could not claim these as damages.

    ii) Kliner and Farrow’s compensation from nLIGHT

    Lumentum’s claim for unjust enrichment was also addressed. California law does not support an unjust enrichment claim when an enforceable express contract exists. Lumentum’s complaint did not include a claim under California’s Uniform Trade Secrets Act, nor did it request unjust enrichment damages explicitly. Therefore, Lumentum could not pursue unjust enrichment damages based on the current claims.

    Furthermore, Lumentum failed to provide sufficient evidence to support an unjust enrichment claim. Lumentum wanted Gorowsky to testify about the salaries and benefits paid to Kliner and Farrow by nLIGHT. Lumentum would need to prove how much of these payments were related to the intellectual property in dispute. On the existing record, a jury would need to speculate as to how much, if at all, Kliner and Farrow were unjustly enriched by the disclosure of the disputed information. This lack of clarity was insufficient to establish a factual issue for trial.

    iii) Kliner and Farrow’s total revenues and gross profits from nLIGHT’s Corona fiber laser products

    Lumentum aimed to have Gorowsky testify about nLIGHT’s revenues and gross profits from the Corona series fiber laser products. However, this request was also impermissible. Defendants pointed out that there was no evidence showing that Kliner and Farrow received any portion of the nLIGHT profits that Lumentum sought to reclaim. They emphasized that these benefits belonged to nLIGHT, which was neither a party to the contracts in question nor a defendant in the breach of contract claims. Gorowsky’s testimony regarding nLIGHT’s revenues and profits was deemed irrelevant.

    The Court granted the motion to exclude Gorowsky’s testimony as it did not pertain to any claim for damages in this case. However, this decision did not affect the potential for Lumentum to pursue other claims, including nominal damages for breach of contract.

    Held

    The Court granted the Defendants’ motion to exclude Plaintiff’s damages expert witness, Donald Gorowsky’s testimony.

    Key Takeaway:

    The Court deemed Gorowsky’s testimony on Kliner and Farrow’s compensation and nLIGHT’s revenues irrelevant to the breach-of-contract claims. California’s Labor Code bars recovering wages and benefits already paid during employment.

    Lumentum’s unjust enrichment claim was also invalid, as it neither invoked California’s Uniform Trade Secrets Act nor requested unjust enrichment damages. Furthermore, Lumentum failed to prove how Kliner and Farrow were unjustly enriched, making Gorowsky’s testimony speculative.

    The Court excluded Gorowsky’s opinions on nLIGHT’s profits because there was no evidence linking those profits to Kliner and Farrow, and nLIGHT was not a party to the breach-of-contract claims.

    In conclusion, the Court held that Gorowsky’s testimony did not pertain to the permissible claims for damages in this case and granted the motion to exclude his testimony.

    Case Details:

    Case Caption: Lumentum Operations LLC V. nLIGHT, Inc.
    Docket Number: 3:22cv5186
    Court Name: United States District Court for the Western District of Washington
    Order Date: September 6, 2024
  • Economics Expert Witness’ Opinions of the Purported Economic Loss of Each Plaintiff Admitted

    Economics Expert Witness’ Opinions of the Purported Economic Loss of Each Plaintiff Admitted

    This case arises out of Plaintiffs’ employment with McKesson and their allegation that McKesson discriminated and retaliated against them by denying them religious accommodations to McKesson’s COVID-19 Vaccination Protocol and terminating their employment. Plaintiffs sought damages which, including lost wages, in the form of back pay and front pay, and fringe benefits.

    Plaintiffs retained Larry D. Stokes, Ph.D., of Beta Business Consulting, LLC, as an expert witness to provide his opinions of the economic losses purportedly suffered by each Plaintiff.

    Defendants claimed that Stokes’ reports and testimony are inadmissible because his lack of knowledge reveals them to be wholly unreliable.

    Economics Expert Witness

    Larry D. Stokes is a forensic economist with over 40 years of experience in litigation related economics. He founded the Beta Business
    Consulting, LLC which provides provides economic analysis reports, research and expert testimony for economic damage claims involving personal injury, wrongful death, employment (loss of earning capacity) and more.

    Want to know more about the challenges Larry Stokes has faced? Get the full details with our Challenge Study report. 

    Discussion by the Court

    Stokes based his opinions on Plaintiffs’ earnings history, including the value of fringe benefits. To begin with, economists typically rely on W-2’s, personal information supplied by Plaintiffs in answers to economists’ questionaries, and employers’ information about compensation.

    The Court found that Defendants’ motion lists seven items Stokes did not recall at his deposition. However, Defendants have not shown that these seven items are information essential to Stokes’ opinions. For example, Defendants argue that “Stokes did not know how he was retained for this case or when he began working on the analysis,” but fail to explain how this information is necessary foundation for his opinions.

    Defendants have not addressed the facts and data Stokes used in reaching his opinions. That he did not remember at his deposition seven questions asked by Defense counsel might make for fruitful cross-examination, but the Court held that his failure to remember when he was employed or what information was requested of Plaintiffs does not show he lacked reliable data.

    Defendants also argued that Stokes’ opinions should be excluded at trial because he “conceded that there were multiple errors in his initial reports at least one of which was a ‘pretty obvious mistake’ which ‘had a substantial impact.”’ However, the Court found that Stokes’ initial reports were revised, and the conceded errors were corrected.

    The motion also sought exclusion of Stokes’ opinions from trial because he relied on unverified information provided by Plaintiffs or their counsel. However, the Court held that there is no basis to expect an expert to personally interview Plaintiffs and verify their history. To the contrary, Fed. R. Evid. Rule 703 specifically authorizes experts to base opinions “on facts or data in the case that the expert has been made aware of or personally observed.”

    Held

    The Court denied the Defendants’ motion to strike the expert testimony and report of Plaintiffs’ expert witness Larry D. Stokes.

    Key Takeaways:

    • Expert reports are hearsay and normally not admitted at trial, absent stipulation. Experts are expected to be prepared to discuss their opinions and the basis of their opinions when they are deposed. But if an expert does not remember how the data was gathered or who prepared what portion of a report, his opinion is not discarded if the report sufficiently details the information he relied on in reaching his opinions. Typically, the expert is allowed to review his report and refresh his memory.
    • That an expert makes errors that are later corrected in supplemental reports does not show that the expert’s opinions lack sufficient facts or data. A few inconsequential errors in an initial report that was later revised to correct the errors do not warrant the exclusion of the expert’s opinions.

    Case Details:

    Case Caption: Loyd Et Al V. Mckesson Corporation Et Al
    Docket Number: 2:22cv2065
    Court: United States District Court, Arizona
    Order Date: September 12, 2024
  • Business Valuation Expert Witness’ Opinion as to the Gross Profit Margin of a Resale Transaction Admitted

    Business Valuation Expert Witness’ Opinion as to the Gross Profit Margin of a Resale Transaction Admitted

    In March 2021, United States Department of Health and Human Services (“DHHS”) awarded Airboss Defense Group (“ADG”) a contract to supply 18,200,000 boxes of nitrile gloves by March 15, 2022. Under the contract, the government would pay ADG $12.98 per box of gloves and transportation costs of $2.85 per box. The total contract price was $288,106,000.  Shortly after the contract award, Hutchins & Hutchins, Inc. (“H&H”), which represented various glove manufacturers, contacted ADG, and offered to assist ADG in meeting its obligations under the contract. Specifically, H&H arranged meetings between ADG and the glove manufacturer, Halyard.

    On April 29, 2021, the two parties entered into an Non-Disclosure Agreement  prepared by ADG. The negotiations which H&H facilitated between Halyard and ADG were initially unsuccessful and ADG purchased nitrile gloves from two other companies. But, in March 2022, ADG and Halyard entered into a contract for the purchase of nitrile gloves to fill a gap in deliveries from one of ADG’s other vendors. The company did not include H&H in its March 2022 deal with Halyard or obtain H&H’s permission to conclude any purchase of nitrile gloves. Because H&H “introduced” Halyard to ADG, and because ADG contracted with Halyard without first obtaining H&H’s written consent, the company alleges ADG violated the NDA’s non-circumvention provision and deprived H&H of profits it would have otherwise received through a finder’s fee or a resale. 

    Airboss Defense Group, LLC, filed a motion in limine to exclude expert testimony relating to (1) the total amount of damages and the calculation of such damages resulting from the alleged breach, (2) the opinions set forth in expert witness Roland Davis’ (“Davis”) supplemental report using the “Lehman Formula,” and (3) Davis’ testimony on the applicable gross profit margin. 

    Roland Davis’ Expert Reports

    Davis opined that an 11.4%-13.4% gross margin from the ADG and Halyard transaction would have been “reasonable by the relevant industry standards” because the Waterstone Transaction gross margin “is well below Industry Standard Gross Margins.” In Davis’ second opinion, he opined that ADG would have expected that H&H would have benefited from the transaction between ADG and Halyard given the NDA, either through a resale of the product or through a finder’s fee.

    On February 7, 2024, Davis supplemented his first expert report with a second report, rebutting ADG’s expert. In this supplemental report, Davis “opine[d] on accepted industry standards for calculating finder’s fees paid to intermediaries who bring businesses together and/or facilitate multimillion dollar commercial transactions between them.” Specifically, Davis opined that the “Lehman Formula” represents a standard method for calculating finder’s fees, although it is “often used in the mergers and acquisitions context.

    Finally, Davis submitted two surrebuttal reports dated October 13, 2023, and June 25, 2024. These reports did not modify any of Davis’ prior opinions but responded to issues previously raised by ADG’s expert. Davis clarified the scope of his testimony in deposition, expressly stating that he would not be applying his gross profit margin opinion to any final calculation of damages. He also stated that his use of the Lehman Formula to determine an alternate value for the finder’s fee was urged on him by counsel and not something he independently would apply to a wholesale transaction like ADG’s glove purchase from Halyard.

    Current Motion

    ADG moved to exclude Davis’ testimony in its entirety. The company first argues that Davis should be precluded from opining on an amount of damages because Davis’ expert report does not include an opinion as to the total dollar amount of damages, and because Davis admitted in his deposition that he was not retained to provide a complete damages analysis. ADG also moved to exclude Davis’ opinions in his supplemental report, namely his use of the Lehman Formula.

    ADG also moved to exclude testimony on the applicable gross profit margin, claiming that Davis’ opinion is not based on sufficient facts or data, is not the product of reliable principles and methods, and is based on cherry-picked data.

    Business Valuation Expert Witness

    Roland Davis serves as President of Davis Business Appraisers, Inc., where the company provides consulting services, business valuations, and machinery and equipment appraisals. Davis has decades of experience selling products to government agencies and appraising and valuing businesses engaged in similar government contract work. 

    He previously owned a company that sold products to the federal government as a wholesaler, and has twenty years of experience of M&A sales with experience selling federal government contractors and nine years of experience valuing private corporations, including government contractors and wholesalers.

    Want to know more about the challenges Roland Davis has faced? Get the full details with our Challenge Study report. 

    Discussion by the Court

    I. Davis is Precluded from Opining on the Calculation of Damages or the Total Amount of Damages

    H&H conceded that “H&H did not retain Davis to offer an opinion as to what H&H’s ‘total dollar amounts of damages’ are or the calculation of those amounts.” Further, H&H stated that Davis “has not offered and will not offer an opinion as to what H&H’s total damages are or any calculations of those total damages.”

    Given H&H’s assertions both in writing and at the hearing, the Court granted ADG’s motion, precluding Davis from providing any opinion as to the total calculation of damages or the precise calculation of what H&H’s damages would be. However, the Court permitted Davis to testify as to certain gross profit margin percentages, which—depending on other evidence—may be relevant to H&H’s claimed damages.

    II. Davis is Precluded from Opining About Finder’s Fees Using the Lehman Formula 

    ADG argued that Davis’ use of the Lehman Formula to calculate a finder’s fee must be excluded because Davis disavowed this opinion at his deposition. ADG also argued that Davis’ Lehman Formula testimony should be excluded because the formula is most often used in the mergers and acquisitions context, not in transactions concerning the sale of personal protective equipment.

    The Court held that Davis did not reach this conclusion by his own independent analysis. If his testimony were admitted solely on the basis of a lawyer’s instruction, it would leave ADG without any ability to test the reliability of his opinion before the jury. Because Davis testified that the Lehman Formula was an inappropriate measure of damages, his expert opinion that the Lehman Formula could be used to calculate a finder’s fee must be excluded.

    III. Davis’ Opinions on the Gross Profit Margin as it Applies to an Intermediary in the Sale of Goods are Sufficiently Reliable under Federal Rule of Evidence 702

    ADG took issue with several aspects of Davis’ gross profit margin testimony as it applies to both a resale transaction and a transaction including a finder’s fee, arguing that the testimony should be excluded as to both types of transactions. ADG also argued that Davis should be precluded from testifying about ADG’s expectations surrounding the transaction in entering into the NDA with H&H.

    The Court held that Davis is permitted to opine as to what an applicable, reasonable, and below industry standard gross profit margin would be with respect to a resale transaction. However, Davis is precluded from testifying as to how this same gross profit margin calculation would apply to a transaction including a finder’s fee. Finally, Davis is precluded from opining on ADG’s expectations in entering into the NDA with H&H.

    A. Testimony About the Gross Profit Margin as it Relates to a Resale Transaction

    Regarding Davis’ resale transaction conclusion, ADG broadly asserted that Davis’ testimony on the applicable gross profit margin must be excluded because Davis is not a qualified expert, his opinion is not based on sufficient facts or data, his opinion is based on both cherry-picked and overbroad data, and his testimony is not the product of reliable principles and methods. 

    First, ADG claimed that Davis is not qualified to testify to the applicable gross profit margin as he lacks experience in the area of government contracts or the sale of medical supplies. Davis has significant experience as a business owner and appraiser. He evaluated, sold, and appraised wholesalers and became familiar with the terms of transactions similar to the present case over a period of many years.

    Davis examined many transactions but selected the Waterstone Transaction as his closest comparator

    Davis properly cited this experience in support of his opinions. At the outset, his report explained that the following opinions were “based on [his] review of the documents above, literature, financial data given to [him] by H&H, and his education and experience.” Davis relied on his experience several times throughout his deposition, backing his responses to questions ranging from pricing to financial data.

    Further, Davis did not produce the 11.4%-13.4% gross profit margin range based on the Waterstone Transaction alone. In fact, as outlined in his report, Davis explained that his opinion about the gross profit margin range “is justified by two different sources.” He cited a higher average gross profit margin percentage from companies comparable in size to H&H of 27.15% in 2021 and 26.46% in 2022 as revealed from the Bizminer’s financial report to inform his opinion. 

    Additionally, he relied on the DealStats financial report to inform his conclusion. This financial report examined wholesalers within NAICS code 423450, the same code H&H falls within, compiling data from December 4, 1998, to December 28, 2018.

    Davis singled out the Waterstone Transaction in his analysis because he believed it was the “most credible comparator available from H&H’s resale history.”

    This Court recognized that Davis’ testimony is not perfect. But these flaws do not render otherwise admissible expert testimony inadmissible.

    B. Testimony About the Gross Profit Margin as it Relates to a Finder’s Fee and ADG’s Expectations in Entering into the NDA

    Regarding Davis’ finder’s fee conclusion, ADG asserted that this opinion should be excluded because it is based on an improper and unsupported assumption that the 11.4%-13.4% gross profit margin would be applicable to two different types of transactions, “whether the ultimate transaction was (a) a resale transaction in which H&H purchased nitrile gloves from Halyard and resold them to ADG or (b) if ADG purchased nitrile gloves directly from Halyard and H&H would have received some sort of finder’s fee.”

    ADG also argued that this Court should exclude any testimony Davis provided speculating as to what ADG’s expectations would have been or were concerning the NDA because Davis provided no analysis or independent basis in reaching this conclusion. 

    After arriving at his opinion on gross margin and without any reliable explanation, Davis equated the gross profit margin for a resale transaction and for a transaction involving a finder’s fee, failing to distinguish between each type of transaction. The Court held that Davis did not have any cited basis to conclude that a finder’s fee would have been calculated in the same way as a resale gross profit margin estimate. Further, Davis cannot testify that in entering the NDA, ADG would have expected to pay H&H any finder’s fee, much less what that finder’s fee would have been. 

    Held

    The Court granted in part and denied in part Defendant’s motion in limine to exclude the testimony of Plaintiff’s damages expert Roland Davis.

    Key Takeaway:

    The Court held that Davis’ gross profit margin opinion is rooted in data from H&H’s business practices and industry sources, and is therefore admissible.

    The Court held that because of Davis’ reliance on financial reports, H&H’s financials, and his own experience, the reasoning underlying his proffered opinion is reliable, and his opinion as to the gross profit margin of a resale transaction may be relevant to facts at issue.

    However, Davis cannot testify that in entering the NDA, ADG would have expected to pay H&H any finder’s fee, much less what that finder’s fee would have been. 

    The Court held that this testimony is unsupported by data or Davis’ relevant experience. Because Davis put forth such assertions with no independent analysis and with insufficient support, Davis is precluded from testifying that a 11.4%-13.4% gross profit margin would apply to a finder’s fee, or that ADG would have expected to pay H&H a finder’s fee of any kind in entering into the NDA.

    Case Details:

    Case Caption: Hutchins & Hutchins, Inc. V. Airboss Defense Group, LLC
    Docket Number: 2:23cv67
    Court: United States District Court, Virginia Eastern
    Order Date: September 6, 2024
  • Economics Expert Witness’ Conclusions Regarding Lost Profits Damages Admitted

    Economics Expert Witness’ Conclusions Regarding Lost Profits Damages Admitted

    In this action, the Frazier Parties alleged that the Eagle Air Parties lacked probable cause to sue them for defamation and other similar claims in an underlying lawsuit that concluded in 2020 (the “Underlying Action”). The Frazier Parties claimed that the Underlying Action damaged Sentinel’s existing or prospective client relationships, resulting in lost profits of at least several million dollars.

    Defendants Eagle Air Med Corporation and Valley Med Flight, Inc. filed a motion to exclude the testimony of proposed expert witness Dr. Ronald Luke, who was retained by Plaintiffs Jeffrey Frazier and Sentinel Air Medical Alliance, LLC under Fed. R. Evid. 702.

    Economics Expert Witness

    Ronald T. Luke has developed Research & Planning Consultants as an inter-disciplinary firm providing economic, financial, and public policy studies. As President and owner, he supervises RPC’s professional staff and maintains high standards for the firm’s work products. Also, he has been accepted as an expert in economics, socioeconomic impact analysis, and policy analysis by state and federal courts, and state administrative agencies.

    Get the full story on challenges to Ronald Luke’s expert opinions and testimony with an in-depth Challenge Study. 

    Discussion by the Court

    To begin with, Defendants’ motion primarily addressed the reliability of Luke’s expert testimony and did not challenge the qualifications of Luke. Defendants argued that (1) “Luke’s opinions regarding Sentinel’s lost profits damages are unreliable and inadmissible under Rule 702[,]” and (2) “any opinion [Luke] might try to offer on the litigation-related damages would be unhelpful and inadmissible.”

    Also, Defendants argued that “Luke’s lost profit opinions rests on unreasonable assumptions that are unsupported by the record” and “Luke failed to properly account for other factors that might affect the amount and existence of Sentinel’s alleged lost profits.” According to Defendants, Luke did not use a discount rate that accounted for certain risk factors in his calculations that other experts use in similar analyses, and he used a ten-year time period for his calculations.

    The Court held that the fact that Luke’s opinion and analysis take into account facts that are still in dispute does not justify exclusion of his expert testimony and report.

    As for the litigation expense damages, Defendants sought to exclude Luke’s inclusion of the litigation expense damages because he did not calculate, analyze, or offer expert opinion related to these damages. There is no indication in the report that Luke himself calculated the litigation expense damages; rather, he merely included the previously calculated litigation expenses in his lost profits analysis based on the other information in the record. Defendants did not dispute that there is evidence in the record supporting the litigation expenses. Therefore, Defendants did not provide grounds for the exclusion of litigation expenses in Luke’s report at that point.

    The Court reviewed Luke’s expert report and found that he had a reasonable basis for reaching his conclusions regarding Sentinel’s lost profits damages.

    Held

    The Court denied Defendants’ motion to exclude the testimony of Plaintiffs’ proposed expert Ronald Luke.

    Key Takeaway:

    • Exclusion is not warranted just because Luke’s opinion and analysis take into account facts that are still in dispute
    • Luke’s inclusion of the litigation expense damages was not excluded due to evidence in the record supporting the litigation expenses. 

    Please refer to the blog previously published about this case: Law And Legal Expert Witness’ Testimony as to the Existence of Probable Cause Excluded

    Case Details:

    Case Caption: Frazier Et Al V. Eagle Air Med Corporation Et Al
    Docket Number: 2:22cv300
    Court: United States District Court, Utah
    Order Date: August 27, 2024
  • Testimony of Economics Expert Witness Excluded Because of his Inability To Produce a Coherent Model

    Testimony of Economics Expert Witness Excluded Because of his Inability To Produce a Coherent Model

    Plaintiffs brought an antitrust lawsuit against Defendants, asserting that Defendants entered a set of agreements with each other and their broadcast partners that suppressed the output of telecasts of out-of-market professional football games, resulting in higher prices for Sunday Ticket.

    Since Judge Philip Gutierrez decided the opinions provided by the Plaintiffs’ expert witnesses regarding financial damages were not reliable, the Sunday Ticket Plaintiffs won’t be getting a mulligan on damages, at least not for now.

    Daniel Rascher, one of the expert witnesses whose testimony was allowed until it wasn’t, crafted a model based on the NFL ditching Sunday Ticket and selling the out-of-market games to various networks that would broadcast the feeds from CBS and Fox.

    Economics Expert Witness

    Daniel Rascher has taught sports economics and finance, business research methods, and master’s project. As President of SportsEconomics, his clients have included organizations involved in the NBA, NFL, MLB, NHL, NCAA, NASCAR, MLS, PGA, WTA, media, sporting goods and apparel, professional boxing, mixed martial arts, minor league baseball, NHRA, AHL, Formula 1. He has authored articles for academic and professional journals, book chapters, and a text book in the sport management and economics fields, has been interviewed hundreds of times by the media for his opinion on various aspects of the business of sports, and has given over fifty presentations at professional and academic conferences.

    Get the full story on challenges to Daniel Rascher’s expert opinions and testimony with an in-depth Challenge Study. 

    Discussion by the Court

    Rascher used college football as his model of what would happen in the absence of the competitive restraints at issue in the case (“college football but-for world”). He opined that if the NFL Teams stopped “colluding and selling” their out-of-market games through the NFL, but sold them either independently or in divisions, the result would be like college football as the games would “become available, just like on Saturday, on over-the-air channels and . . . basic sport cable channels” and customers would not “pay anything extra above what they were already paying for their TV package.”

    Judge Gutierrez held that Rascher’s failure to produce a coherent model is particularly problematic as there are significant differences between college football and the outcome in his college football but-for world. Unlike Rascher’s college but-for world, not all college football games are available on over-the-air networks and on the major cable stations as some college football games—including games of top 25 ranked teams—were available only by purchasing premium offerings like the Pac 12, SEC, or ACC network packages or viewable only on local regional networks.

    The judge upheld the finding that Sunday Ticket, as constructed, violated federal antitrust laws. 

    From June 5, 2024 to June 26, 2024, a trial took place, where the jury found that Defendants’ conduct violated § 1 and § 2 of the Sherman Act. The jury awarded the Commercial Class $96,928,272.90 and the Residential Class $4,610,331,671.74 in damages.

    Judge Gutierrez specifically found that there was enough evidence to justify the verdict as to the issue of liability. He threw the verdict out because he determined that the expert witnesses he allowed to testify weren’t reliable.

    Held

    The Court excluded Daniel Rascher’s testimony under FRE 702 because it relied on a college football model that was developed based on speculation and ipse dixit opinion.

    Key Takeaway:

    After review of Rascher’s testimony, the Court finds that his college but-for world was not based on a reliable methodology but rather ipse dixit opinion untethered to an economic analysis of what would have likely occurred in the but-for world and must be excluded. Rascher had to present a but-for world grounded in economic rationality.

    Case Details:

    Case Caption: In re: NFL “Sunday Ticket” Antitrust Litigation
    Docket Number: 2:15ml2668
    Court: United States District Court for the Central District of California
    Order Date: August 01, 2024
  • Economics Expert Witness Employs a “Before and After” Methodology to Quantify Plaintiff’s Damages

    Economics Expert Witness Employs a “Before and After” Methodology to Quantify Plaintiff’s Damages

    This action arises out of an alleged October 22, 2016 arrest and subsequent criminal prosecution of Plaintiff, which concluded with Plaintiff’s conviction for misdemeanor battery upon Officer Ermeri.

    On October 20, 2020, Plaintiff Richard John Lucibella (“Lucibella”) filed a nine-count complaint in state court against Officer Richard Ermeri (“Ermeri”), Officer Savino (“Savino”), and the Town of Ocean Ridge (“the Town”).

    Defendants filed a motion to strike a supplemental report provided by Fishkind, arguing that Plaintiff cannot establish substantial justification for the untimely disclosure, that the disclosure constitutes unfair surprise, and that the disclosure is inherently harmful.

    Defendants also filed a Daubert motion to exclude testimony and opinions of Plaintiff’s purported expert witness, Henry Hank Fishkind. The crux of the motion to exclude Fishkind’s opinion testimony contended that he did not have the qualifications and experience necessary to render expert opinions on health care economics and that his methodology is neither reliable nor helpful to the jury. 

    Economics Expert Witness

    Henry Hank Fishkind is widely regarded as one of Florida’s premier economists and financial advisors. Fishkind’s career began in the public sector where he worked as an economist and associate professor at the University of Florida. In 1980, Fishkind became the associate director for programs at the University of Florida’s Bureau of Economic and Business Research. During his tenure at the university, Fishkind served from 1979-1981 on the governor’s economic advisory board. He began his career as a private sector consultant when he became president of M.G. Lewis Econometrics in Winter Park, Florida. In 1988, Fishkind formed Fishkind & Associates, Inc. as a full service economic and financial consulting firm.

    He has a Ph.D. in economics with specialties in Urban and Regional
    Economics and in Econometrics.

    Want to know more about the challenges Henry Hank Fishkind has faced? Get the full details with our Challenge Study report. 

    Discussion by the Court

    Defendants’ Motion To Strike Plaintiff’s Untimely Expert Disclosure

    The Court held that Fishkind was justified in providing the late-disclosed November Report because he did not have the necessary information, which was disclosed by Defendants after Fishkind’s initial report disclosure.

    The remainder of Fishkind’s November Report consisted of information that district courts in the Southern District of Florida have deemed admissible routinely. 

    Fishkind informed Defendants in his deposition that he would need to produce a supplemental report, and Fishkind’s tardy disclosure was justified based on the aforementioned difficulties with obtaining information, documents, and deposition testimony.

    The Court found that the untimely disclosure of Fishkind’s November Report was substantially justified, harmless, and that Defendants are not unfairly prejudiced by the untimely disclosure—thereby satisfying Rule 37‘s admissibility standard.

    Defendant’s Motion To Exclude The Testimony And Opinions Of Hank Fishkind

    Qualifications

    Defendants argued that Fishkind is not qualified to testify with respect to the subject-matter proffered by Plaintiff. The Court disagreed. Fishkind reviewed thousands of pages of financial and other records in this case.

    While Defendants argued that Fishkind lacked the qualifications and experience necessary to render opinions about health care economics, the Eleventh Circuit has allowed expert testimony in similar situations.

    Reliability and Helpfulness

    Fishkind used a “before and after” methodology to quantify Lucibella’s economic damages. 

    In calculating economic damages using the “before and after” method, Fishkind measured other factors such as economic considerations, regulatory changes, and Centers for Medicare & Medicaid Services policy changes, all of which could have explained the deterioration of the financial performance of Lucibella’s business outside of the impacts stemming from alleged wrongful acts. Fishkind’s report also supplied methodology explaining how he calculated the deterioration in risk rating of Lucibella’s business. 

    The Court found that most of the facts and/or data that Fishkind relied upon in calculating economic damages are the kind of information that economic experts would reasonably rely on in their field of expertise and in accordance with Federal Rule of Evidence 703.

    The Court, however, held that Fishkind’s report contains two specific opinions that are not rooted in well-established and reliable methodology and are therefore inadmissible. Fishkind merely relied on Lucibella’s own statements, never quantified the impact of Lucibella’s defense on the management of his business, and never quantified the amount of time that Lucibella devoted to his defense. 

    Finally, as it relates to the remaining claims in this matter—excessive force (Count II) and unlawful search of property (Count VII)—the Court found a sufficient nexus between the alleged acts from the date of the subject incident, the State of Florida disqualifying Lucibella from employment with State-licensed healthcare providers and the State’s Medicaid Program, and Fishkind’s economic calculations.

    Held

    The Court granted in part and denied in part the Defendant’s Daubert motion to exclude testimony and opinions of Plaintiff’s purported expert witness Hank Fishkind.

    Key Takeaway:

    • Fishkind’s expert report utilized metrics such as (1) risk rating impact and (2) reduction in growth rate to quantify his “before and after” methodology. The Court found Fishkind’s reasoning and usage of the “before and after” methodology sufficient to withstand Daubert scrutiny.
    • In calculating economic damages using the “before and after” method, Fishkind reviewed tax returns for Lucibella’s umbrella company along with detailed profit/loss statements for the underlying businesses. Additionally, Fishkind analyzed financial documents from 2012 to 2020 related to Lucibella’s businesses.
    • Fishkind’s damages opinion that relies upon the economic impact of the State’s disqualification is admissible—provided that sufficient facts are adduced and found at trial to support the existence of the alleged acts, the disqualification of Lucibella’s business, and causation that connects them.

    Case Details:

    Case Caption: Lucibella V. Town Of Ocean Ridge Et Al
    Docket Number: 9:20cv82156
    Court: United States District Court, Florida Southern
    Order Date: August 13, 2024
  • Business Valuation Expert Witness’ Alternative Bases of Calculating Alleged Damages Partly Rejected

    Business Valuation Expert Witness’ Alternative Bases of Calculating Alleged Damages Partly Rejected

    In this trademark infringement action, Plaintiffs, Makina Ve Kimya Endustrisi AS (“MKE”) accused the Defendants, A.S.A.P. Logistics Ltd. of engaging in massive fraud when they offered to sell millions of rounds of Plaintiff’s military goods, to multiple purchasers, without permission or right.

    MKE’s damages expert, Pamela O’Neill, opined that MKE suffered millions of dollars in damages. She offered three alternative bases of calculating MKE’s alleged damages: $11.175 million for a reasonable royalty, $7.4 to $8.1 million for corrective advertising costs, or a “floor calculation” of $4.34 million for lost profits from a single customer. Defendants moved to have O’Neill’s opinions excluded.

    Reasonable royalties are an especially bad fit here, where there was no licensing agreement ever contemplated between the parties, no sales related to the infringing use, and no rationale for why a licensing agreement would have ever been agreed to.

    Business Valuation Expert Witness

    Pamela O’Neill has spent more than 30 years as a valuation professional and has directed more than 900 valuation assignments. Early in her career, she was called to testify before the New York Stock Exchange Arbitration Panel and was cited by the Panel as “an excellent expert witness”.

    Her international valuation career has included significant assignments in North America, South America, Europe, Asia, the Middle East, Australia, and New Zealand. She has prepared expert reports for litigation purposes as well as for financial and tax reporting, dispute resolution, investigations, antitrust matters, negotiations, acquisitions, divestitures, reorganizations, solvency and bankruptcy.

    Get the full story on challenges to Pamela O’Neill’s expert opinions and testimony with an in-depth Challenge Study. 

    Discussion by the Court

    Reasonable Royalties

    The Court held that O’Neill’s use of a reasonable-royalty model is not a fit for the facts of this case.

    In addition, her calculation of the royalty rate is plainly unreliable. Since O’Neill could not rely on a licensing agreement that the parties had with each other or with third parties, she attempted to identify comparable licensing agreements. But the six licensing agreements she cites are far from comparable. O’Neill did not actually review the licensing agreements themselves. Instead, she reviewed summaries of transactions available on a database. Also, Defendants say that two other transactions involved celebrity endorsement deals. O’Neill’s report does not acknowledge any of these differences or explain how she accounted for them in her calculation.

    O’Neill applied a royalty rate of 5% (gleaned from these allegedly comparable licenses) not to Defendants’ sales—because there were none—but rather to two transactions that resulted in no sales: an unsigned contract with TD Group for $216 million, and an unfulfilled $7.5 million purchase order and invoice relating to M42, resulting in a calculation of $11.175 million in damages.

    In selecting these transactions, her report simply states that they were chosen because TD Group and M42 “intended to enter into and be bound by these contracts.” O’Neill does not point to any evidence that a hypothetical negotiation between the parties would have been informed by these deals (which arose after the infringement commenced), anything in the parties’ dealings with each other or third parties that would support their use, or anything from the allegedly comparable licenses to support this kind of royalty base. Plus, O’Neill does not even address the fact (which MKE does not dispute) that the TD Group contract allowed the purchase of “up to” $216 million in ammunition but did not have any minimum purchase requirement.

    Lost Profits

    Defendants did not put forward a traditional lost-profits model of damages, and O’Neill confirmed that there was insufficient evidence to support such a model.

    MKE pointed to O’Neill’s expert report, which it says “directly ties Defendants’ misconduct to MKE’s lost profit damages.” MKE says that O’Neill relied on an interview she did with John Sharpley, the individual who handles procurement and contractual issues for non-party Shawnee Outdoors, in reaching her conclusions. Sharpley allegedly told O’Neill that he had conversations with Bear Tactical’s CEO. But “a party cannot call an expert simply as a conduit for introducing hearsay under the guise that the testifying expert used the hearsay as the basis of his testimony.”

    MKE contended that O’Neill may properly rely on otherwise inadmissible “facts or data” as a basis for her opinion. But here MKE is just using O’Neill to skirt the rules of evidence by having her relay double hearsay to the jury on an issue of historical fact as to which her expert opinion would not be permitted—the reasons for Bear Tactical’s termination of its contract. O’Neill’s testimony cannot serve as factual support that MKE’s lost profits from Bear Tactical can be attributed to Defendants.

    Due to the lack of admissible evidence linking MKE’s claimed lost profits to Defendants, the Court did not consider Defendants’ motion to exclude O’Neill’s lost-profits calculations.

    Corrective Advertising

    The Court held that O’Neill’s so-called expert analysis simply involved a calculation of the relative increase in MKE’s “Marketing, Sales & Distribution” expenses for the first half of 2022. As a threshold matter, the Court notes that while O’Neill’s report was required to include “a complete statement of all opinions the witness will express and the basis and reasons for them,” her discussion of corrective advertising damages is limited to two paragraphs and a related exhibit containing calculations. Those paragraphs and the exhibit don’t explain the specifics of what the “Marketing, Sales & Distribution” category contains, does not explain why advertising—as opposed to some other factor—accounted for the increase in that line-item for 2022, and provides no basis—not even explaining conversations had with MKE—to attribute that increase to corrective advertising due to Defendants’ conduct.

    O’Neill admitted that she did not know what was encompassed within the sales component or the distribution component of the figure and said the expenses that these categories may include are different for each company.

    The Court held that O’Neill therefore lacked reliable basis to conclude that the increase of the “Marketing, Sales & Distribution” figure (which may or may not have included MKE’s advertising that may or may not have taken place in response to Defendants’ conduct) was an accurate approximation of corrective advertisement in this case.

    As the Court can see, O’Neill did not rely on any information, such as the underlying expenses that made up the financial data. In fact, MKE never provided O’Neill that data despite her specific requests.

    Held

    The Court granted in part the Defendants’ motion to exclude Pamela O’Neill’s opinions.

    Key Takeaway:

    The Court cannot ignore the limited number of licensing agreements that O’Neill considered, the differences identified between those licensing agreements and the alleged hypothetical negotiation here, and O’Neill’s failure to acknowledge or account for these differences in her report. 

    The Court noted that O’Neill was left to rely on MKE’s sayso that calculating the change in the “Marketing, Sales & Distribution” expenditure would measure corrective advertisement. And since the Court does not even know who provided O’Neill these assurances, the Court cannot verify just how reliable that source of information was. All to say, as an expert witness, O’Neill was not permitted to simply rely on her client’s assurances that it expended money.

    Case Details:

    Case Caption: Makina Ve Kimya Endustrisi A.S V. A.S.A.P. Logistics Ltd Et Al
    Docket Number: 1:22cv3933
    Court: United States District Court, New York Southern
    Order Date: August 2, 2024

  • Scope of Damages Identified by Insurance Expert Witness Admitted

    Scope of Damages Identified by Insurance Expert Witness Admitted

    This suit arises from alleged damage to Plaintiff, Curt Marcantel’s primary residence in Lake Charles, Louisiana, and his ranch in Singer, Louisiana, during Hurricane Laura. At all relevant times the properties were insured under policies issued by State Farm. Plaintiff filed suit in this court on June 6, 2022, alleging that State Farm had not timely or adequately compensated him for his covered losses. Accordingly, he raised claims for breach of insurance contract and bad faith under Louisiana law.

    State Farm filed a motion to exclude or limit the testimony of Plaintiff’s expert Stevephen Lott. In particular, State Farm argued that Lott’s opinions based on moisture meter readings conducted by Plaintiff’s expert Charles Norman do not meet the standards laid out in Federal Rule of Evidence 702 and Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 579 (1995).

    Insurance Expert Witness

    Stevephen Lott has been providing professional public adjuster & consulting services to Insureds and Clients across the country. Prior to this, he spent 10 years working claims for several large Insurance Carriers on the other side of the aisle. He started Integrity Claims Consultants out of a strong belief that the Insured’s interests were not being represented fairly, by both the Carrier’s he was representing and the Public Adjusting firms they were being represented by. 

    Get the full story on challenges to Stevephen Lott’s expert opinions and testimony with an in-depth Challenge Study. 

    Discussion by the Court

    Notably, Lott testified that he did not use any moisture meters to determine readings on which he based his opinion that certain repairs needed to be made to the interior of the home. Rather, Lott relied on Norman’s moisture meter readings.

    State Farm challenged the scope of damages identified by Lott because he had relied on moisture meter readings conducted by Charles Norman. In two separate Daubert motions, State Farm had challenged Norman’s technique in using the moisture meter as well as his failure to account for the fact that both properties had sat in Louisiana’s humid weather without air conditioning for nearly a year before his inspection. The Court had denied those challenges as impacting the weight rather than the admissibility of Norman’s testimony. Accordingly, there was no basis for excluding or limiting Lott’s testimony.

    Held

    The Court denied State Farm’s motion to exclude or limit the testimony of Plaintiff’s expert Stevephen Lott.

    Key Takeaway:

    The Court refrained from excluding Lott’s opinions based on moisture meter readings conducted by Plaintiff’s expert Charles Norman because State Farm had previously challenged Norman’s technique in using the moisture meter as well as his failure to account for the fact that both properties had sat in Louisiana’s humid weather without air conditioning for nearly a year before his inspection. The Court had denied those challenges as impacting the weight rather than the admissibility of Norman’s testimony.

    Case Details:

    Case Caption: Marcantel V. State Farm Fire & Casualty Co
    Docket Number: 2:22cv1511
    Court: United States District Court, Louisiana Western
    Order Date: July 9, 2024