Plaintiffs are the estate and heirs of Timothy Hunt, who was killed in a grain engulfment accident. Defendant is the insurance company who insured the farm (Butts Farms) where the accident occurred. Defendant denied coverage for the accident under the policy. Butts Farms assigned its claims to Plaintiffs as part of an arbitration and non-execution agreement. Plaintiffs secured an arbitration award of approximately $12 million against Butts Farms and seeks to collect that from Defendant.
Plaintiffs designated Ronald Clifton as an expert on Defendant’s claims handling practices. Clifton’s report outlined the facts of the case, and in doing so concluded that the grain vacuum Hunt was using was attached to the trailer. He opined on the liability of Butts Farms, coverage of the loss under the policy, claims handling deficiencies by Defendant, Defendant’s conformance with its “Claims Best Practices” and the Kansas Unfair Claim Settlement Practices Act, and Defendant’s breach of fiduciary duty toward Butts Farms.
The Defendant filed a motion to exclude Plaintiffs’ expert Clifton.
Insurance Expert Witness
Ronald Clifton has over 37 years of claim handling experience. He has also served as an insurance claims litigation consultant for over 21 years.
Clifton’s opinion is “that a reasonable insurer would have settled this claim and paid the full available policy limits,” that Defendant acted negligently by failing to settle the claim for policy limits, and that Defendant failed to act in good faith in handling the claim.
The Court has reviewed Clifton’s report. It shared many of the concerns raised by Defendant. Clifton’s report includes an extensive discussion of policy provisions and a conclusion that the accident is covered under the policy.
Analysis
To begin with, Clifton concluded without elaboration that the grain vacuum was attached to the grain trailer. But that is a factual question the jury will be asked to decide—a fact question that does not require expert testimony. If a jury finds the grain vacuum was attached to the trailer (which can include being tied), coverage exists under the policy. It is not Clifton’s role to tell the jury how they should decide by simply declaring there is coverage based on the grain vacuum being attached.
To the Court’s knowledge, there are no disputes about any other provisions in the policy. Even to the extent there was an issue about the policy, it is not Clifton’s role to opine on what the policy says or does not say because that is a legal issue for the Court to decide.
Clifton’s report also repeated opinions of others, including a doctor’s opinion about Hunt’s cause of death. Clifton is not qualified to opine on that issue, nor is it proper for him to simply repeat what others have said. To the Court’s knowledge, Hunt’s cause of death is not an open issue in this case.
There are other opinions that do not seem to “fit” the case. For example, Clifton’s report included a series of opinions that Butts Farms had a duty to exercise reasonable care toward Hunt, and it breached that duty. To the Court’s knowledge, Butts Farms’ obligations toward Hunt are not an issue the jury will be asked to decide. Additionally, Clifton opined that Defendant breached its fiduciary duty to Butts Farms. This opinion is conclusory and veers into legal opinion.
Held
The Court granted in part and denied without prejudice in part the Defendant’s motion to exclude the testimony of Ronald Clifton.
Key Takeaway
The Court found that many of Clifton’s opinions are not relevant, would not aid the jury, or touch on legal matters or on matters beyond his expertise. However, Clifton did have some expertise that qualifies him to offer opinions about insurance industry standards and practices. What those opinions are and the basis for them are not clear from the report, however. Accordingly, the Court will voir dire Clifton before the trial.
Case Details:
Case Caption:
Hodges V. Farm Bureau Property & Casualty Insurance Company
Plaintiff Alycia Johns brought this action under the Fair Credit Reporting Act and Fair Debt Collection Practices Act following several years of disputing various tradelines with credit reporting agencies based on her claim of identity theft.
Johns relied on her expert, Douglas Hollon, to assert that Nelnet failed to conduct an adequate investigation of the disputes.
Defendant Nelnet Servicing, LLC, along with Equifax, TransUnion, LVNV, Resurgent, and First Premier, filed motions to limit or exclude the testimony of Hollon
Consumer Credit Expert Witness
Douglas A. Hollon holds a Bachelor of Science in Business Finance. He has received FCRA certifications from the Consumer Data Industry Association, has a Credit Analysis Certification from the New York Institute of Finance, has certifications in Credit Risk Modeling and Credit Scorecard Development from SASInstitute, Inc., and has completed the American Bankers Association Certification in Lending Compliance for Compliance Professionals.
He worked at Experian from 2005 until 2019, where he began in a position assisting consumers with their disputes, and then handled escalated credit report disputes for his remaining years with Experian. While at Experian, he received specialized training involving fraud and “mixed file” disputes. Prior to his time at Experian, he was an investigator with the U.S. Army CID, where he conducted investigations for sixteen years.
Defendants asserted that Hollon is not qualified to opine on their investigations, or their policies or procedures. They argued that his opinions are based on the dictionary definition of “investigation” and his personal experience as an investigator with the U.S. Army Criminal Investigation Division (“CID”).
Hollon’s expertise is based primarily on his experience. In his report, Hollon explained that his experience at Experian involved handling disputes, assisting tens of thousands of customers, explaining credit score factors, and understanding information received from Public Record Vendors.
While Hollon’s explanation of how his experience led to the conclusions reached in this respect is minimal, the Court found that Hollon is sufficiently qualified to testify as an expert regarding investigations and reinvestigations of credit disputes by CRAs and furnishers.
The Court also found that Hollon is qualified to speak, “in general terms and as found relevant at trial, about the sort of damages that are typically caused on consumer reports.”
C. Reliability
Defendants argued that Hollon’s opinions on Defendants’ investigations, and their policies and procedures, are not reliable. Specifically, they argued that his opinions on policies and procedures are based on prior knowledge of Experian’s procedures, regulatory agency publications, case law, deposition transcripts, and “company manuals or publications and other related documents” that he is unable to identify.
Johns asserted that there is no standard procedure for a reasonable investigation under the FCRA, and so Hollon’s experience “is the closest the jury will get to a standard, industry-wide practice.”
While Johns suggested that it is the Defendants’ burden to show why Hollon’s CID investigative experience is not applicable to the FCRA context, that disregarded the burden imposed under Rule 702 on the proponent of the expert testimony.
Hollon’s reliability further falters as he is unable to identify what he relied on. For instance, he references deposition transcripts involving these Defendants in other cases, but cannot identify what cases they came from.
Hollon’s opinions are rendered more unreliable because they do not dependably flow from the facts. He asserts: “I believe that she submitted a police report which is — and she was a victim of identity theft. That is my opinion.” His report opens with, “Plaintiff, Alycia Johns, is a victim of identity theft.” But the alleged identity theft in this case is not so clearly established. Rather, it is only Johns’ testimony and the police report—based on her statement, which does not specify which tradelines she asserted are the result of identity theft—which support this conclusion. It is the province of the jury, not an expert, to make credibility determinations.
The Court found that Hollon’s opinions are unreliable because generalized statements from Hollon regarding the harm other consumers have faced when their consumer reports contained inaccuracies is not relevant to the present case.
Held
The Court granted the Defendants’ motions to exclude the testimony of Douglas Hollon.
Key Takeaway
An expert’s experience, without an explanation of how that experience supports the conclusion, cannot be a substitute for reliable principles or methods. Hollon repeatedly stated that his opinions are based on his “experience, skills, and knowledge,” yet he offered no explanation of what aspects of that experience, skills, or knowledge he drew upon in reaching his conclusions. An expert’s opinion cannot be deemed reliable when it rests solely on the expert’s ipse dixit.
Case Details:
Case Caption:
Johns V. Nelnet
Docket Number:
2:22cv4791
Court Name:
United States District Court, Pennsylvania Eastern
This class action lawsuit arises out of Amazon’s practice of using smart-speaker technology (“Alexa”) to surreptitiously: (a) intercept; (b) eavesdrop; (c) record; (d) disclose; or (e) use millions of Americans’ voices and communications, all without their knowledge or consent. Such conduct blatantly violates Washington’s wiretapping law, which applies nationwide to Plaintiffs and all members of the Class.
Defendants here, Amazon.com, Inc. and Amazon.com Services LLC (collectively, “Amazon” or “Defendants”), are therefore liable as a result of their egregious violations of the State Wiretapping laws – and are also liable for their violations of the Washington Consumer Protection Act (“CPA”), the Electronic Communications Privacy Act of 1986 (“Federal Wiretap Act”), and the Stored Communications Act of 1986 (“SCA”). Plaintiffs Kaeli Garner, Jodi Brust, Diane McNealy, Michael McNealy, Ricky Babani, Jeffrey Hoyt, Lorlie Tesoriero, Ronald Johnson, Selena Johnson and Caron Watkins (collectively, “Plaintiffs”) brought this action individually, and on behalf of a Class of similarly situated individuals, to redress those violations of law.
Amazon filed a motion to exclude the testimony of Plaintiffs’ expert, David Hoffman. Defendants sought to exclude Hoffman’s testimony regarding the sufficiency of Amazon’s disclosures in its privacy policies, terms of use, and marketing materials as improper legal conclusion and/or an invasion of the province of the jury.
Privacy Expert Witness
David Alfred Hoffman is the Steed Family Professor of the Practice of Cybersecurity Policy at the Sanford School of Public Policy at Duke University. Hoffman has advised employers and other organizations regarding the use of consumer data, cybersecurity, privacy, and data governance. While employed by Intel Corporation, Hoffman was the Director of Privacy, overseeing privacy issues related to the data Intel collected, processed, and used and Intel’s products.
He has authored internet privacy policies and terms of use documents for corporations and served on governmental advisory boards tasked with considering issues related to the effective provision of information about the collection of personal data by devices. In addition, Hoffman oversaw industry efforts to create a certification process for companies with responsible data management practices, including efforts to adequately disclose data collection and use practices through privacy policies.
The Court found that Hoffman has the necessary experience to opine regarding industry standards and best practices for providing notice to consumers or users that data is being collected and how it will be used. He also has the expertise to compare Amazon’s policies, practices, and disclosures to the industry standards, to identify in what way Amazon’s practices are deficient, and explain how the deficiency or deficiencies would impact a reasonable consumer’s understanding of how Alexa works.
In two important respects, however, Hoffman’s opinions are not supported by any knowledge, skill, experience, training, or education he may have.
Hoffman did not suggest that the universe of representations are subject to or violate any industry standard or best practice
First, with regards to his opinion that Amazon’s marketing materials are inconsistent with and countermand the disclosures made in the privacy policy, Hoffman did not suggest that the universe of representations are subject to or violate any industry standard or best practice. Thus, his area of expertise did not inform this opinion. Nor is there any reason to suspect that his opinion regarding the interactions between documents would be helpful to the trier of fact.
There is no indication that Hoffman has relevant experience or training that would allow him to opine on what Alexa usersactually knew
Second, Hoffman’s conclusion that a user or group of users did not, in fact, understand how Alexa works or did not consent to the recording of their voice data is not supported by any surveys, interviews, research, or studies. There is no indication that Hoffman has relevant experience or training that would allow him to opine on what Alexa users, individually or collectively, actually knew given the disparate sources of information regarding the Alexa device.
Finally, Hoffman will not be permitted to testify regarding opinions that were not included in his report, such as that Amazon shares Alexa data with third-parties or that Amazon created its disclosures with the intent to mislead consumers. He may, however, opine on facts that may be relevant to the jury’s understanding of Amazon’s practices and intentions.
Held
The Court granted in part and denied in part the Defendants’ Daubert motion regarding Professor David Hoffman.
Key Takeaway
While Hoffman’s experiences in evaluating privacy policies and establishing best practices for alerting consumers when and why their personal data is being collected necessarily involves an understanding of how the typical or reasonable consumer would react to and understand different practices, that is not the same as opining what a particular person or group of persons actually knew or understood.
Please refer to the blog previously published about this case:
On May 19, 2023, Plaintiff John Gianacopoulos filed this action against Defendants Acuity, a mutual insurance company (“Acuity”), and Joyce Jackman & Bell, LLC (“JJB”), concerning a fire that occurred on September 12, 2022, at 1124 Saint Ann Street in Scranton, Pennsylvania (the “Scranton Property”).
According to Plaintiff’s expert witness, James Stevenson, JJB breached its professional duty of care by failing to procure the correct policy for John Gianacopoulos and by failing to explain the differences in coverage between a homeowners’ insurance policy and a dwelling fire insurance policy.
JJB has moved to exclude Stevenson’s expert report and testimony, arguing that they are inadmissible because it lacked the requisite reliability and application to the specific facts of this case in violation of Rule 702.
Insurance Expert Witness
James W. Stevenson is an underwriter, consultant, and broker with over thirty years of experience in the insurance field.
Stevenson’s opinion is supported by his “education, training, experience and expertise in the property and liability insurance industry over the past [thirty-seven] years,” and, moreover, his opinion concerned facts pertinent to this case. He stated in his report that JJB should have been aware of the Plaintiff’s changed residence and that “once [JJB] was made aware that John Gianacopoulos had purchased a new home and was making it his residence, [JJB] was or should have been aware that the [Scranton Property] was no longer [his] residence.” As a result, the Court found that Stevenson has satisfied both contested prongs of Rule 702.
He further opined that JJB breached its duty by failing to procure the correct policy for the Plaintiff’s Scranton Property—a dwelling fire insurance policy—that would have provided property coverage for the fire loss at the property. Stevenson also explained in his deposition that “it’s up to the agent, being the trained expert they are in the insurance industry, to recommend or explain the coverages available and the policies available to the insured/prospect,” and that JJB had an obligation to advise the Plaintiff in this action because “[y]ou can’t have two homeowners’ policies with primary residences.”
Held
The Court denied JJB’s motion to exclude the testimony of James Stevenson.
Key Takeaway
The expert’s testimony must be relevant to the purpose of the case and must assist the trier of fact. Stevenson’s opinion, as expressed in his report and at his deposition, created a genuine dispute of material fact as to the duty that JJB owed the Plaintiff, which must be determined by the factfinder.
ZAGG initiated this action against DVG, TX Trading Inc. (“TX Trading”), and Menachem Mendel Ichilevici (“Ichilevici”) (collectively, “Defendants”), alter egos collectively doing business as Amazon Seller “Mac N’ Cheese,” violated Sections 32 and 43 of the Lanham Act, 15 U.S.C. §§ 1114, 1125(a), by infringing on ZAGG’s trademarks and falsely advertising ZAGG products.
Plaintiff, ZAGG, Inc., filed a Daubert motion to exclude the report and testimony of DVG’s Amazon policy expert, Rachel Johnson Greer.
Compliance Expert Witness
Rachel Johnson Greer worked as a Program Manager at Amazon for five years, overseeing various elements of Amazon’s compliance programs. She has has served as an Amazon compliance consultant since 2015. Greer published a book on Amazon product safety. She has appeared as an “Amazon Product Compliance” speaker at various events from 2016 to 2022.
Greer received a Master of Business Administration degree from Seattle University.
ZAGG claimed that Greer is “an unqualified and unreliable witness as to Amazon’s current processes and policies (or any policies after she left in 2017).”
However, Greer’s experience both as a manager at Amazon and as a consultant to Amazon sellers qualifies her as an expert in the field of “Amazon policy compliance.”
Despite Greer’s demonstrated experience in the Amazon marketplace, ZAGG attacked her qualifications in four ways. First, ZAGG claimed that none of Greer’s roles at Amazon “involved any of the issues or policies at issue in this case.” But that’s not entirely true. Greer “investigated sellers and vendors for safety and intellectual property infringement,” “managed quality & compliance for Amazon’s own brands,” and “managed the legal compliance of all global imports.”
Second, ZAGG contended that Greer isn’t qualified because she hasn’t worked at Amazon since 2017 and thus (ZAGG says) isn’t familiar with Amazon’s “current processes and policies.” But ZAGG hasn’t cited any authority for the proposition that an expert must be currently (or even recently) employed by a company whose policies he or she intends to outline.
Third, ZAGG insisted that “only Amazon itself can testify as to its practices and procedures.” However, courts routinely allow experts who are unaffiliated with a company to testify about that company’s policies or practices if those experts are otherwise qualified to do so. To the extent ZAGG thinks that Amazon would be a better witness, it hasn’t identified any authority that requires the Court to exclude an expert’s testimony simply because a better witness might have been found.
Finally, ZAGG claimed that Greer is impermissibly trying to “testify on behalf of Amazon.” The Greer Report made it clear that Greer is offering her perspective on Amazon’s policies and practices as an expert who’s navigated the Amazon marketplace for years.
II. Reliability
Because Greer is a non-scientific expert testifying about her experience, the relevant question is “how that experience leads to the conclusion reached, why that experience is a sufficient basis for the opinion, and how that experience is reliably applied to the facts.”
Greer has shown that her opinions about Amazon’s policies and practices are based, in part, on her experience “providing compliance guidance to Amazon sellers regarding Product Policy, Fulfilment by Amazon (‘FBA’) compliance, Amazon’s intellectual property policies, and other Seller Performance issues,” and “providing advisory services on meeting Amazon and regulatory product compliance requirements for consumer goods.”
Her “opinions in this case are based on her experience working at Amazon and in her Amazon consulting business, Amazon policy documents, publicly available listings of ZAGG products on Amazon.com, and her review of certain documents provided to her by DVG.” That’s more than sufficient for the Court to find her report and testimony reliable under Rule 702.
Since Greer’s proposed testimony is based on her personal experience working with Amazon’s quality control policies over many years, the Court denied the second aspect of ZAGG’s motion.
III. Helpfulness
ZAGG argued that the Greer Report is not helpful because it “contains exclusively fact testimony and is completely devoid of any opinions that go beyond the understanding of an average layperson.”
However, DVG argued that Greer does much more than just recite Amazon policies and procedures. In saying so, DVG identifies several of Greer’s opinions that (it believes) will help the trier of fact, including:
Amazon public-facing policies “are often contradictory or outdated” because “Amazon’s process for changing and updating policies, guidelines and other seller documents on the Amazon Marketplace is a multi-step process that requires internal tickets and up to six approvals.”
“Based on her experience at Amazon and in providing consulting services to Amazon sellers, it has always been understood that a “new” item is simply one that is brand-new and unused, free of blemishes, smudges or dirt, and in the original packaging.”
The Court agreed with DVG that Greer’s report and testimony go well beyond a mere recitation of Amazon’s policies and that her expert analysis of Amazon’s policies and practices would assist the trier of fact. The Court thus denied this third aspect of ZAGG’s motion.
IV. Opinions & Hearsay
First, ZAGG said that “it is entirely unclear what ‘opinions’ are being offered by Greer.” ZAGG claimed that the Greer Report is “a hodgepodge of speculative factual assertions made by Greer masquerading as ‘opinions.’”
However, in making this argument, ZAGG identified several of Greer’s specific opinions—thus belying its claim that it has no way of knowing which opinions Greer plans to offer. (“Greer testified that she is offering only two opinions. First, she testified that: ‘Accordingly, it is my opinion that ZAGG’s conclusion that defendants cannot list ZAGG products as being in new condition is based on an incorrect interpretation of Amazon’s policies that is not used by Amazon in practice.’ Second, she testified that: ‘it is my opinion that defendants’ stickering of ZAGG products comports with Amazon’s policy, as does the marking over the barcode on the lower left of the packaging above.’”)
Second, ZAGG believed that Greer’s opinions are merely “out-of-court assertions about Amazon’s policies and practices, offered for their truth.”
The Court held that Greer’s testimony isn’t a mere recounting of the out-of-court statements of others—it’s expert analysis about the industry’s business practices gleaned from her years of experience as an Amazon employee and consultant.
Held
The Court denied ZAGG’s motion to exclude the report of DVG’s expert, Rachel Johnson Greer.
Key Takeaway
Knowledge of an industry’s business practices is gleaned from years of working within the industry and with its professionals. It is not a recounting of out of court statements of others.
Plaintiffs Lazendra Collins, Lawrence Teague, and Willie Teague alleged that various officers of the Chicago Police Department (“CPD”) violated the U.S. Constitution and Illinois state law during a confrontation in May 2020.
The City identified Paul Amelio as a proposed expert witness on police practices. Amelio, an active-duty CPD officer, serves as “Team Leader” and “lead trainer” for the CPD SWAT Team. Plaintiffs filed a motion to exclude Amelio’s testimony. They contended that admitting Amelio’s opinions would improperly intrude on the fact-finding role of the jury.
Plaintiffs have filed a motion to exclude Amelio’s testimony. They contended that admitting Amelio’s opinions would improperly intrude on the fact-finding role of the jury.
Police Practices Expert Witness
Paul Amelio as an active-duty CPD officer, serves as “Team Leader” and “lead trainer” for the CPD SWAT Team. In this position, Officer Amelio “develops curricula and provides training for SWAT Team members” for multiple law enforcement agencies across several jurisdictions.
Officer Amelio is an expert on police practices who planned to testify about the proper use of force, particularly the use of a baton, by police officers.
Plaintiffs argued that Amelio’s testimony is inadmissible because it (1) invades the province of the jury and (2) renders an improper legal conclusion.
In their words, “Amelio’s testimony is not proffered to aid the jury in determining the facts, but to add the ‘gloss of an expert opinion’ to the Defendants’ disputed version of events.” The Court largely agreed that Amelio’s testimony is not necessary and will not be of assistance to the jury in determining the reasonableness in general of actions by the CPD officers, relevant legal standards, or CPD policy governing the use of force.
Analysis
In this case, the core conclusion that Amelio offered is that the CPD officers’ use of force was “reasonable” and “in line with nationally recognized and generally accepted police practices.” In the Court’s view, this is a case involving straightforward facts: because blunt contact is the “most primitive form of force,” the reasonableness of using the baton, given the context, is likely within the everyday experience and understanding of lay jurors.
To the extent Amelio proposed to offer an opinion on the policies or training practices of the Chicago Police Department, the Court has a further concern: As courts in this circuit have repeatedly explained, excessive force is a question of constitutional law, not department policy.
If the City contends that a police expert is required to explain how a “reasonable officer” would conduct himself, the Court disagrees. Expert testimony on complex police practice or other forms of “specialized knowledge” may be helpful to the jury in some contexts, but the legal standard in this case is governed not by a police officer‘s understanding of what a reasonable police officer would do, but instead by a juror‘s understanding of the actions of a reasonable police officer.
The Court is thus inclined to grant Plaintiff’s motion to exclude this testimony, with one potential limited exception: Amelio’s testimony about baton technique might be helpful to the jury. In his report, he claimed that the video shows officers waving their batons in an “Xpattern,” noting that “officers are trained that swinging the baton in an ‘X’ motion in circumstances such as these helps them create a ‘zone of safety’ for everyone involved.” To the untrained eye, the officers’ use of the baton might come across as random, disorganized swings designed to strike a suspect.
Held
The Court granted in part the motion to exclude Paul Amelio’s testimony and strike his expert report.
Key Takeaway:
A lay witness (or, indeed, the officers themselves) would be in a position to competently testify to CPD policy and training practices, and there is no indication that these policies and practices are complex enough to necessitate an explanation or independent application by an expert witness.
Case Details:
Case Caption:
Collins V. City Of Chicago
Docket Number:
1:21cv2913
Court Name:
United States District Court for the Northern District of Illinois, Eastern Division
De Tomaso Automobili Holdings N.A. LLC (“De Tomaso”) creates, develops, and sells luxury automobiles. Norman Choi is its current owner. Ryan Berris is its former Chief Executive Officer and Chief Marketing Officer. Berris sued Choi and De Tomaso for, inter alia, breach of contract and wrongful discharge.
Berris sued Choi and De Tomaso for, inter alia, breach of contract and wrongful discharge.
Defendants filed a motion to exclude testimony purporting to show that Berris’ travel expenses were reasonable. De Tomaso did not have a written, formal expense policy in place when Berris incurred these expenses. Berris proposed to offer the expert testimony of John Imperiale, a certified public accountant who currently serves as a Senior Director in the Expert Services practice at a financial and risk advisory firm, to give the jury “additional context and guidance regarding what may constitute proper business expenses.”
Accounting Expert Witness
John T. Imperiale has over 14 years of experience advising clients and managing engagement teams in the areas of forensic accounting investigations, financial reporting, asset tracing, financial fraud investigations, and quantification of damages. Imperiale is also experienced in accounting and auditor malpractice matters and related Generally Accepted Accounting Principles (GAAP) and Generally Accepted Auditing Standards (GAAS) guidance and damages.
Prior to joining Kroll, he was an associate in the audit practice of a national public accounting firm. He received his B.B.A in finance and accounting from Villanova University and his M.B.A. from the Fordham University Graduate School of Business.
Defendants argued that the Court should exclude Imperiale’s opinions because he merely “regurgitates” what Berris has told him, and because his opinions are not based on reliable principles or methods.
As to Imperiale’s methods, because De Tomaso did not have an expense policy in place, Imperiale used “professional accounting and taxation guidelines issued by the Financial Accounting Standards Board (‘FASB’) and the U.S. Internal Revenue Service (‘IRS’) in order to provide a general framework for what are generally and customarily accepted as valid business expenses.” Under these guidelines, Imperiale opined that “the principal analysis of whether a particular expense is considered to be a ‘business expense’ turns on if it is ‘common and accepted in your industry’ and ‘helpful and appropriate for your trade or business,’” as well as whether “the expense was incurred in ‘carrying out other activities that constitute the entity’s ongoing major or central operations.’”
Although the IRS and FASB guidelines do not directly control the issues in this case, absent a written expense policy, the jury has no benchmark against which to measure the reasonableness of Berris’ expenses. The Court agreed with Berris that insight into what constitutes a business expense under tax and accounting standards may assist the jury in drawing the line between business and personal expenses in this context, which in turn will assist the jury in determining whether Berris breached his fiduciary duty to De Tomaso by reimbursing certain expenses.
As for Defendants’ argument that Imperiale is merely bolstering Berris’ testimony, although he relies in part on Berris’ factual statements, the Court held that Imperiale does not merely “regurgitate[] what a party has told him,” but rather analyzes whether Berris’ expenditures are reasonably considered business expenses if Berris’ factual assertions are taken as true.
Held
The Court denied the Defendants’ motion to preclude the testimony of John Imperiale.
Key Takeaway:
The Court will put in place appropriate guardrails at trial to ensure that Imperiale isn’t simply acting as a mouthpiece for otherwise inadmissible evidence and isn’t vouching for Berris’ credibility. Imperiale should make clear that he was asked to assume the truth of the stated reasons for the various expenses, and that he is not testifying as to the veracity of those reasons.
Case Details:
Case Caption:
Berris V. Choi Et Al
Docket Number:
1:23cv4305
Court Name:
United States District Court for the Southern District of New York
A district judge in Texas admitted the insurance expert’s testimony about the cost to repair or replace the damaged areas.
This is a commercial property insurance coverage dispute arising from hail and wind damage to Plaintiff’s property located at Midland, Texas. Landmark insured the Property under a commercial policy. Landmark received notice that the Property had sustained storm damage with the date of loss claimed as June 19, 2020.
On March 28, 2022, Landmark sent Plaintiff a letter explaining that investigation revealed that the roof was exposed to multiple hail events on April 16, 2017; on May 16, 2017; and/or on April 23, 2019, but did not support that a hail event occurred at the Property on or about June 19, 2020. Plaintiff subsequently filed suit against Landmark for alleged property damages with a date of loss of June 19, 2020.
Plaintiff designated Kevin Funsch, “a licensed public adjuster and owner of US Insurance Adjusters, LLC.” On March 22, 2024, Landmark filed a motion requesting that the Court exclude Plaintiff’s expert witness, Funsch’s testimony and strike his expert report.
Insurance Expert Witness
Kevin Funsch is a public adjuster and the owner of an insurance adjusting firm with a solid background in claims handling and estimating. He is experienced in adjusting property losses and performing appraisals.
Landmark sought for Funsch’s report to be struck and his testimony excluded because: (1) Plaintiff’s expert designation and Funsch’s report did not comport with Federal Rule of Civil Procedure 26(a)(2); (2) Funsch’s report and opinions were unreliable; and (3) Funsch’s report and opinions were irrelevant.
Funch’s Compliance with Rule 26 and Rule 702
Defendant asserted that Funsch’s expert report is deficient for multiple reasons: (1) it “did not contain a complete statement of the basis and reasons for Funsch’s opinions as to the damages sustained to the property and the cost of repairs”; (2) Funsch did not “explain in his report how his experience as an insurance adjuster led him to reach his conclusions”; (3) the report “did not include any explanation as to the basis or reliability of the estimate”; (4) it “failed to demonstrate that Funsch’s opinions on the damages and necessary repairs are based on sufficient facts or data”; and (5) “that Funsch reliably applied those principles and methods in forming his estimate as required by Rule 702”.
After thoroughly scrutinizing Funsch’s report, the Court found it satisfied both Rule 26 and Rule 702. It added that Landmark’s reliance on its cited Rule 702’s advisory committee note was inapplicable to Funsch’s expert report in this case, as he stated that he relied on multiple other documents and conversations with Neil Hall in forming his opinions, rather than relying solely on experience as the advisory committee note contemplated.
The Court addressed Landmark’s arguments that Funsch failed to demonstrate his opinions on the damages and necessary repairs are based on sufficient facts or data, the product of reliable principles and methods; and that he reliably applied those principles and methods in forming his estimate as required. The Court noted that Plaintiff designated Funsch as his damages expert. Funsch is offered as an expert to provide opinion testimony only on the cost to repair or replace the damaged areas identified in the Hall Report.
Reliability of Kevin Funsch’s Opinions
Next, Landmark asserted Funsch’s “opinions regarding the costs of repairs are unreliable because he relied on unexplained assumptions about the Property that have no factual basis.” Landmark’s argument is premised on Funsch’s deposition testimony. In his deposition, Funsch stated most of the quantities and measurements in his estimate were copied over from the Berkley estimate. Then, because Hall’s report “only called for replacing some sections of the roof and the Berkeley estimate called for replacing all of them, Hall told Funsch to just use ‘about half’ of some of the Berkeley quantities.” Funsch admitted he “wasn’t able to verify every single one of the quantities.” Funsch concluded ‘these quantities, the number of items seems reasonable’ which Landmark asserted were “assumptions” by Funsch instead of “actual quantities” actually rendered the entirety of Funsch’s opinions unreliable.
The Court, citing Rule 703, found Funsch’s testimony and report reliable.
Relevancy of Kevin Funsch’s Opinions
Landmark argued Funsch’s opinions were irrelevant because: (1) his repair estimate was based on prices as of April 2023, when the Policy required valuation based on the date of loss; (2) his repair estimate was a replacement cost estimate, not an actual cash value estimate; and (3) his opinions were not tied to “covered causes of loss.”
His repair estimate was based on prices as of April 2023, when the Policy required valuation based on the date of loss
Defendant first asserted Funsch’s opinions were irrelevant and/or not helpful to the jury because his report contained prices from April 2023 instead of 2019, and the Policy’s valuation provision mandated the cost of repairs be in 2019 (the alleged date of loss).
The Court found that the date of Funsch’s damage estimate did not render it completely irrelevant and unhelpful; rather the exact weight to be given to Funsch’s testimony and expert report was for the fact finder to determine.
His repair estimate was a replacement cost estimate, not an actual cash value estimate
Landmark argued Funsch’s opinions were irrelevant and/or not helpful to the jury because his report contained only a replacement cost estimate, and “[i]n order to receive Replacement Cost coverage, the Policy stated that Plaintiff must first ‘actually’ repair or replace the property.” However, “it was undisputed that Plaintiff did not make the necessary repairs and the very minor repairs Plaintiff did make were not made until over two and a half years later.”
The Court noted that whether Plaintiff could recover replacement cost value or actual cash value damages was a point of contention currently being litigated. Thus, without an order barring Plaintiff from recovering replacement cost damages, the Court found Funsch’s opinion as to replacement cost damages was relevant.
Funsch’s opinions are irrelevant and/or not helpful because his opinions are not tied to a covered loss
Landmark argued Funsch’s opinions are irrelevant and/or not helpful because his opinions are not tied to a covered loss. The Court emphasized that Plaintiff designated Funsch as his damages expert. Funsch is offered as an expert to provide opinion testimony only on the cost to repair or replace the damaged areas identified in the Hall Report.
Held
The Court denied Landmark’s motion to strike and exclude the testimony of Kevin Funsch.
Key Takeaways:
It is not unusual in insurance coverage cases to have separate causation and damages experts, and to have the damages expert rely on causation opinions from the separate expert.
Simply because Funsch relied on Hall’s opinion and his own analysis of photographs, does not render Funsch’s reliability below Rule 702’s threshold, as this is exactly the kind of facts and data experts in Funsch’s field reasonably rely on in forming their opinions.
Case Details:
Case Caption:
William Douglas C/O The Havens Group, Inc. V. Landmark American Insurance Company
A district judge in Louisiana admitted the testimony of a law enforcement expert despite its alleged lack of documentary support and supporting methodology.
This lawsuit stems from injuries sustained by Anthony Efthemes, a Louisiana State Police officer, while assisting in an emergency pursuit of a vehicle on Interstate 10 in Calcasieu Parish, Louisiana. The Plaintiff, Efthemes was tasked with deploying “stop sticks” on the interstate to intercept the target car, which was being pursued by several other police vehicles with their lights and sirens activated.
Defendant Malik Aleem, driving an 18-wheeler, approached Efthemes’ point of interception around the same time as the target car. Aleem’s vehicle hit the stop sticks shortly after Efthemes deployed them, resulting in a violent tug on the device cord that caused injuries to Efthemes’ left hand.
Efthemes subsequently filed a lawsuit in state court against Aleem, his employer, and their insurer. The suit asserts that Aleem was liable for Efthemes’ injuries due to his negligent actions, including failing to yield to emergency vehicles, failing to slow down, and not attempting to avoid the hazard. Efthemes claims Aleem’s careless operation of his vehicle directly led to the injuries sustained during the incident.
Kerry Najolia has been qualified as, and has testified as, an expert on police practice, procedure, training, police officer survival/defensive tactics, police use of force, and police canines in numerous Louisiana state and federal courts. He has worked in various divisions in law enforcement, which includes patrol, investigations, Training and SWAT.
Najolia issued two reports in this matter, in June 2021 and February 2024. In both documents he opined that Efthemes deployed the stop sticks “as he was trained and in accordance with LSP policy, procedures and protocols.”
He noted the privileges accorded to law enforcement in emergency pursuit. He also emphasized that Efthemes was trained not to wrap any part of the tire deflation device around any part of his body, and instead “to hold the handle of the device, take the slack out and place the device across the road or highway.”
Najolia concluded that the Troopers and other Officers were driving, acting and deploying the tire deflation devices with due regard for the safety of others and themselves.
He allowed, however, that the trier of fact would determine the reasonableness of each party’s actions and could conclude that “Malik’s actions may not have entirely or partially contributed to Trooper Efthemes’s injury” if it determined that Efthemes had not followed his training.
Defendants, however, found fault with certain statements in the report, asserting that they lacked documentary support and supporting methodology. They asserted that Najolia’s opinions were duplicative of those that will be elicited from two other Plaintiff witnesses.
The Court held that Najolia’s reports reflected that his opinions on Efthemes’s use of stop sticks were based on his years of law enforcement experience as well as his review of discovery and relevant training materials. The Court added that the challenged factual assertions in this case concerned the credibility of the testimony, not the admissibility.
Plaintiff may elect not to call the witnesses whose testimony overlaps with Najolia’s opinion or may elect not to elicit cumulative testimony. The Court cannot determine before trial whether such overlap creates a basis for exclusion.
Held
The Court denied Defendants’ Daubert motion to exclude the testimony of Kerry Najolia.
Key Takeaways:
Najolia opined that Efthemes deployed the stop sticks “as he was trained and in accordance with LSP policy, procedures and protocols” after Efthemes sustained injuries while assisting in an emergency pursuit of a vehicle. The Court held that Najolia’s reports reflected that his opinions on Efthemes’s use of stop sticks were based on his years of law enforcement experience as well as his review of discovery and relevant training materials.
Najolia’s application of law enforcement policies and procedures, through the lens of his experience, to the facts of this incident is within the realm of Rule 702 and potentially helpful to the trier of fact.
Challenged factual assertions typically concern the credibility of the testimony, not the admissibility, and it is up to the opposing party to examine the factual basis for the opinion in cross-examination.
A district judge in Arkansas allowed an expert librarian to testify about how American Library Association (“ALA”) cataloging policies attempt to accommodate a variety of concerns and interests.
Plaintiffs and their minor children are residents of Crawford County and users of its Library System. In late 2022 or early 2023 the Crawford County Library System implemented a policy under which its library branches must remove from their children’s sections all books containing LGBTQ themes, affix a prominent color label to those books, and place them in a newly-created section called the “social section.” Plaintiffs alleged this policy was imposed on the Library System by the Crawford County Quorum Court in response to political pressure from constituents who objected, at least partly on religious grounds, to the presence of these books in the children’s section.
On May 26, 2023, Plaintiffs filed this lawsuit against Crawford County, claiming that the aforementioned policy violated the First Amendment to the United States Constitution.
Plaintiffs retained an expert witness named Daniel N. Joudrey, who is a professor of information organization and cataloging at the Simmons University School of Library and Information Science. Joudrey submitted an expert report that discussed the Cataloging Code of Ethics and the ALA’s Bill of Rights, and opined that Defendants’ actions were inconsistent with those standards as well as with the historical practices and understandings of libraries.
Daniel N. Joudrey is a Professor at Simmons University School of Library and Information Science, where he teaches information organization and cataloging. Prior to coming to Simmons, Joudrey was a teaching fellow and research assistant at the University of Pittsburgh for Dr. Arlene G. Taylor, a well-known cataloging authority. Joudrey was also a metadata policy intern at the Library of Congress. Before that, he worked for an international non-profit social services organization. Joudrey holds a Ph.D. and an MLIS (Master of Library and Information Science) from the University of Pittsburgh. He has been a member of the American Library Association for nearly 25 years.
He is the author of two widely used textbooks in the LIS field, The Organization of Information and Introduction to Cataloging and Classfication.
Joudrey opined that a library “wanting to operate consistently with First Amendment principles and allow its patrons to receive information without unnecessary impediment should follow the Cataloging Code of Ethics and American Library Association’s Bill of Rights.”
Defendants contended that Joudrey’s testimony did not satisfy any of the four Rule 702 requirements.
Joudrey’s specialized knowledge will not help the Court to understand the evidence or to determine a fact in issue
First, Defendants argued that Joudrey’s specialized knowledge will not help the Court to understand the evidence or to determine a fact in issue. The Court disagreed, and believed that expert testimony about library cataloging industry standards is more likely than not to help it understand the evidence in this case. After all, the central issues and disputes in this case concerned Defendants’ library cataloging practices, whether or to what extent those practices interfered with Plaintiffs’ First Amendment right to access information, and how (if at all) the Court should order Defendants to modify those library cataloging practices.
Joudrey’s opinions were not based on sufficient facts
Second, Defendants argued that Joudrey’s opinions were not based on sufficient facts, because he simply assumed the truth of facts given to him by Plaintiffs’ counsel instead of independently investigating the facts on his own. Setting aside the (disputed) question of whether Joudrey performed any independent factual investigation, this argument ignored the United States Supreme Court’s observation that “more than 200 years” of “settled evidence law” allows an expert to “express an opinion that is based on facts that the expert assumes, but does not know, to be true.” See Williams v. Illinois, 567 U.S. 50, 57, 132 S. Ct. 2221, 183 L. Ed. 2d 89 (2012).
When an expert bases his opinion on assumed facts, then “it is up to the party who calls the expert to introduce other evidence establishing the facts assumed by the expert.” Indeed, the Federal Rules of Evidence expressly permitted this practice, authorizing an expert to “base an opinion on facts or data in the case that” he has either “personally observed” or “been made aware of.” So the Court disagreed with Defendants on this point as well.
Defendants argued that Joudrey’s opinions are not the product of reliable principles and methods
Third, Defendants argued that Joudrey’s opinions are not the product of reliable principles and methods. To some extent, Defendants rehashed their argument about insufficient factual investigation to support this point as well; to that same extent, the Court disagreed as already stated above.
Additionally, Defendants characterized Joudrey’s opinion as being that “the only way to ‘operate consistently with First Amendment principles and allow its patrons to receive information’ is to follow the ALA’s policies,” and they criticized him for failing to “explain why the ALA policies are the only way to comply with the First Amendment.” The Court did not believe this to be an accurate characterization of Joudrey’s opinions. The Court reviewed Joudrey’s expert report and his deposition testimony, and did not find any place where he opined that compliance with ALA policies is the “only” way to comply with the First Amendment. Rather, he opined that if a library wants to operate consistently with First Amendment principles, then it “should” adhere to ALA cataloging policies.
Joudrey’s opinion is not that following ALA policies is the only way of complying with the First Amendment; rather, it is that following ALA policies serves a variety of salutary goals, including “aligning with First Amendment principles.”
Joudrey’s opinions do not reflect a reliable application of his principles and methods to the facts of the case
Finally, Defendants argued that Joudrey’s opinions did not reflect a reliable application of his principles and methods to the facts of the case.
This particular argument rested on two premises. One is that Joudrey walked back a couple of his opinions when pressed on them during his deposition. The other is that Joudrey improperly expressed a legal conclusion when he opined that libraries wishing to comply with the First Amendment should follow ALA policies. As for the first premise, the Court did not see this as undermining Joudrey’s reliability. To the contrary, it showed a willingness to acknowledge when one misspeaks and to adjust one’s opinions to account for new information. As for the latter premise, the Court already rejected it in the preceding two paragraphs.
Held
Ultimately, if this case proceeds to a bench trial then it will be the Court’s duty to consider all the evidence, including Joudrey’s testimony, and assign it the weight the Court believes it deserves. The Court sees no need to exercise its discretion now in a manner that would preemptively tie its own hands later. For all the foregoing reasons, Defendants’ motion to exclude Joudrey’s testimony will be denied.
Key Takeaway:
The Court reviewed Joudrey’s expert report and his deposition testimony, and did not find any place where he opined that compliance with ALA policies is the “only” way to comply with the First Amendment. Rather, he opined that if a library wants to operate consistently with First Amendment principles, then it “should” adhere to ALA cataloging policies. When elaborating on this opinion in his deposition, Joudrey explained: “I thought that if they were operating consistently within these documents . . . that it would result in libraries still having the latitude to organize their materials by creating special displays” and “would result in, you know, following general principles of the profession which align with First Amendment principles, . . . and it would align with how a trained librarian would understand the field.”
In other words, Joudrey’s opinion is not that following ALA policies is the only way of complying with the First Amendment; rather, it is that following ALA policies serves a variety of salutary goals, including “aligning with First Amendment principles.”
To be clear, and as Joudrey repeatedly acknowledged in his deposition, he is not a lawyer and is not qualified to opine on what the law is nor on whether Defendants have complied with the law in this case. Such determinations are ultimately the prerogative of this Court. But the Court sees nothing improper about permitting expert opinion testimony regarding how ALA cataloging policies attempt to accommodate a variety of concerns and interests which bear upon a librarian’s profession, which include but are not limited to First Amendment principles. As Defendants conceded, Joudrey is “equipped to opine on the ‘best practices’ touted by the ALA.”
