Tag: shipyard

  • Real Estate Valuation Expert Witness’ Testimony on Appreciation Impairment Damages Admitted

    Real Estate Valuation Expert Witness’ Testimony on Appreciation Impairment Damages Admitted

    108 named Plaintiffs admitted that they purchased their Shipyard properties for residential purposes.

    Plaintiffs each bought units on Parcel A of the former Hunters Point Naval Shipyard (“HPNS”). HPNS is a Superfund site where Tetra Tech EC, Inc. (“TtEC”) conducted environmental remediation work in certain areas years before the Plaintiffs bought their units. Plaintiffs now bring claims against the Tetra Tech Defendants for purported lost profits, in addition to other damages, under theories of fraud and misrepresentation (among other claims not addressed in this motion).

    Plaintiffs sought class certification, citing their claims for negligence, nuisance, common law fraud, and California statutory fraud.

    In support of their motion for class certification, the Plaintiffs submitted a nine-page declaration from their expert, Brett Reynolds. He investigated multiple areas of potential damages including appreciation impairment, and excess charges incurred by impacted Shipyards homeowners.

    The Defendants moved to exclude Reynolds’ opinions under Federal Rule of Evidence 702. They argued that Reynolds lacked the necessary expertise to offer the opinions in his declaration and that the methodology underlying his conclusions was fundamentally flawed, rendering his testimony unreliable.

    Real Estate Valuation Expert Witness

    Brett Reynolds is a licensed appraiser with almost 18 years of experience in the real estate industry, with an emphasis on valuation, acquisition, and asset management.

    He has a degree in economics from the University of Southern California and holds the top designations in the appraisal profession. Reynolds has been a Designated Member of the Appraisal Institute (MAI) since 2008 and a Certified Commercial Investment Manager (CCIM) since 2009. He has been a licensed appraiser in the State of California (Certified General License 042466) since 2007. He has testified as an expert witness in both Federal Tax Court and California State Court.

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

    Discussion by the Court

    Reynolds opined on the two primary sources of economic damages incurred by the class members: (1) appreciation impairment/ diminution in value of the Parcel A homes owned by the putative class members, and (2) excess tax charges/ Mello-Roos damages.

    For the appreciation impairment damages, Reynolds stated that he was provided with a list of 241 market-rate homes that had been sold on Parcel A as of August 2, 2018. Assuming an average appreciation impairment of 20.4%, he concluded that these units have suffered a total appreciation impairment of $55,523,536. Additionally, Reynolds calculated the amount of past Mello-Roos liabilities incurred by each of the 241 market-rate homes sold on Parcel A on the same date. Assuming certain Communities Facilities District (CFD) rates as specified in his declaration, Reynolds opined that the Parcel A homeowners have incurred $8,393,735.00 in Mello-Roos liabilities.

    Defendants said that Reynolds “has no relevant expertise on which to base his opinion on the cutoff date Plaintiffs use for the class definition.”

    However, Reynolds did not express a substantive opinion about the cutoff date for Plaintiffs’ class definition. Reynolds mentioned events that took place in 2018, but that is not in the context of giving an opinion as to why August 2, 2018, and not, say, another date in 2018, might be the proper cut-off date. Consequently, the Court overruled this objection.

    For Reynolds’ methodology, Defendants’ main contention is that Reynolds’ choice of index was wrong because it “measures different types of homes than those present at the shipyard” and also “measures non-representative neighborhoods.” The Court decided that the details of what Reynolds “did or didn’t take into account in running his analysis . . . may be grist for a good cross-examination at trial, but they do not play a material role in deciding whether [Reynolds’] work should be admitted under Rule 702.”

    According to the Court, Plaintiffs have not identified any common evidence that might warrant class certification. This shortfall is particularly problematic for causation, which is a necessary element of each of the claims for which they are seeking certification. Plaintiffs relied solely on the Reynolds declaration as the ostensible common proof of causation. The Reynolds declaration is also identified as the only common evidence of the damages the class suffered because of Defendants’ alleged fraud and negligent misrepresentation. But the Reynolds’ declaration did not even try to supply class-wide proof on these issues. Also, Reynolds did not offer any opinions whatsoever about causation. 

    Held

    The Court denied Defendants’ motion to exclude the testimony of Brett Reynolds.

    Key Takeaway:

    Reynolds investigated multiple areas of potential damages. Exclusion is denied because it was the Court’s opinion that the details of what Reynolds “did or didn’t take into account in running his analysis . . . may be grist for a good cross-examination at trial, but they do not play a material role in deciding whether [Reynolds’] work should be admitted.”

    Case Details:

    Case Caption: Pennington Et Al V. Tetra Tech, Inc. Et Al
    Docket Number: 3:18cv5330
    Court: United States District Court for the Northern District of California
    Order Date: December 23, 2024
  • Maritime Expert Witness’ Testimony About the Historic Practices of the Navy Admitted

    Maritime Expert Witness’ Testimony About the Historic Practices of the Navy Admitted

    In October 2020, Sentilles (Plaintiff) was diagnosed with mesothelioma and subsequently filed a case asserting negligence and strict liability claims against multiple defendants, including Avondale (Defendant). He claimed that his asbestos exposure from the 1950s to the 1980s caused his illness. Sentilles stated that he was personally exposed to asbestos while working at Avondale’s shipyard in 1969. He also alleged secondary exposure from his brother, Tom Sentilles. Tom’s work clothes contained asbestos while they lived and commuted together during his employment at Avondale.

    In his deposition, Sentilles testified that during May and June 1969, he worked in Avondale’s insulation shop sewing asbestos blankets for ships under construction. At that time, Avondale was building vessels under contract with the U.S. Navy, Coast Guard, and the United States Maritime Administration (MARAD), and he recalled that some of the asbestos blankets were installed on Navy ships.

    Avondale’s Compliance with Federal Inspection Standards

     Avondale was constructing vessels for the U.S. government, it raised affirmative defenses, including derivative sovereign immunity and government contractor immunity. To support these defenses, Avondale hired marine engineer and former Navy officer Herfel as an expert witness. Herfel issued two reports analyzing the specifications, policies, and knowledge of the Navy, Coast Guard, and MARAD regarding the use of asbestos materials on their ships.

    Herfel’s reports began by outlining his qualifications. He then described the case-specific evidence he reviewed, including various depositions, Sentilles’s Avondale employment records, and vessel construction contracts and specifications. He also researched records pertaining to the government ships constructed and repaired at Avondale before, during, and after Sentilles’s employment at the shipyard.

    Herfel essentially rendered two opinions. First, he opined that the government, as stated in its contracts and vessel specifications, required asbestos-containing materials to be used on its vessels, and Avondale was required to act in “strict compliance” with that requirement. Federal inspectors regularly inspected Avondale to ensure compliance. Second, Herfel explained that the government’s research on the health hazards posed by asbestos dates back to the 1940s and concluded that a private-sector shipyard, such as Avondale, could not have had greater knowledge of those hazards than the federal government.

    Maritime Expert Witness

    Christopher P. Herfel earned a Bachelor of Science degree in marine engineering, with a minor in shipyard engineering management. He served eight years as a commissioned officer in the United States Naval Reserve. He held a Coast Guard-issued third assistant engineer’s license for steam and diesel propulsion, with unlimited horsepower. Herfel worked as a shipyard superintendent, managing the repair and overhaul of various military and merchant vessels. This work included asbestos abatement projects. He later served as the president and chief executive officer of McCaffery & Associates, Inc. This company specialized in researching and analyzing Navy, Coast Guard, and other government documents related to ship design, construction, maintenance, and repair. For the past 21 years, Herfel has researched and interpreted contracts, specifications, and records concerning materials used in the construction, maintenance, and repair of federal vessels.

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

    Discussion by the Court

    Qualifications and Methodology

    Sentilles argued that Herfel’s testimony and opinions should be excluded from trial, citing a lack of qualifications and improper methodology. He claimed that Herfel was unqualified because he was not an industrial hygienist and lacked a degree in naval or maritime history or policy. Additionally, Sentilles criticized Herfel’s methodology, arguing that he had not reviewed relevant documents about Avondale’s asbestos history, that his references to OSHA and safety standards were irrelevant, and that he had no experience interpreting contracts. Sentilles also contended that Herfel’s former status as a Navy officer might mislead the jury into believing he spoke on behalf of the government.

    In response, Avondale defended Herfel’s qualifications, emphasizing his education, work experience, and research. They stated that Herfel’s training and experience made him uniquely qualified to explain the historic policies and practices of the Navy, Coast Guard, and MARAD concerning asbestos-containing materials. Avondale clarified that it did not present Herfel as an industrial hygienist or shipyard historian. It argued that his lack of a history degree was irrelevant since his expertise stemmed from years of research and experience. Furthermore, Avondale contended that Herfel’s methodology was sound and did not require peer review because his field was not scientific. They asserted that Herfel’s testimony would help the jury understand complex government records related to shipbuilding.

    Helpfulness to the Jury

    The Court, considering both sides’ arguments and Herfel’s qualifications, ruled that he was qualified to testify. It found his opinions relevant and reliable. The Court noted that Herfel’s experience as a marine engineer and Navy officer, along with his two decades of research, made him well-suited to explain the government’s shipbuilding practices and asbestos policies. The Court concluded that Herfel’s testimony would assist the jury in understanding the government’s role in requiring asbestos on vessels. It also highlighted Avondale’s compliance and the historical information about asbestos hazards.

    Held

    The Court ordered that Sentilles’s motion in limine to exclude Christopher Herfel be denied.

    Key Takeaway:

    The Court ruled that the expert’s qualifications and the reliability of their testimony were sufficient for admissibility. It highlighted the necessity for the district court to serve as a gatekeeper. This role ensures that expert opinions assist the jury and are based on reliable methodologies. The Court noted that the factors for assessing the reliability of expert testimony, as established in precedent, should be flexible and tailored to the specifics of each case. Furthermore, the Court pointed out that challenges to an expert’s opinions should be addressed through cross-examination rather than exclusion. It emphasized the need for jurors to consider the expert’s insights alongside the arguments presented by attorneys.

    Case Details:

    Case Caption: Sentilles v. Huntington Ingalls Inc.
    Docket Number: 2:21cv958
    Court: United States District Court for the Eastern District of Louisiana
    Order Date: October 4, 2024