Construction Management Expert’s Report Fails to Sufficiently Support Damages Opinion

Construction Management Expert’s Report Fails to Sufficiently Support Damages Opinion
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Court: United States District Court for the Northern District of Texas, Dallas Division
Jurisdiction: Federal
Case Name: State Auto. Mut. Ins. Co. v. Freehold Mgmt.
Citation: 2019 U.S. Dist. LEXIS 55052

Facts

The plaintiff insurance company brought this case against the defendant building management company seeking a declaratory judgment regarding the rights and obligations under the defendant’s insurance policy. The plaintiff also sought judgment on whether a roof damaged during a storm was covered under the policy. The plaintiff had already paid a certain amount for repairs made on the property after the storm but the defendants countersued to recover additional damages to replace the roof.

The defendant’s counterclaims included contract breach arguments, infringements of the Texas Insurance Code, infringements of the Texas Deceptive Trade Practices Act, and breach of duty of fair dealing and good faith.  At the root of their allegations was the argument that the plaintiff refused to perform an effective and reasonable investigation of the claim for additional damages before denying it, unreasonably delayed in rejecting a claim for additional damages, using unreasonable settlement tactics including the employment of a supposedly biased engineering company, and failed to pay their claim. The defendant also sought to exclude the testimony of the plaintiff’s construction management expert witness.

The Construction Management Expert Witness

The defendant challenged the plaintiff’s construction management expert witness under FRE Rule 702 on the basis that his testimony was not relevant in this case and would not help the jury. In an appendix to the brief submitted in favor of their petition, the defendant also argued, without justification, that the expert’s testimony was unreliable and inadmissible. The defendant argued his testimony was not reliable since he did not produce his own calculations and relied on another expert’s calculation and data.

The plaintiff responded that their construction management expert witness was appointed as an expert to testify on construction management and solicitation of bids for the actual repair work. Specifically, the expert was retained to collect bids for different trades, review for code violations, and determine fair and reasonable repair costs. The plaintiff argued that his opinion was relevant to the damages and also that the defendant failed to provide proof as to how the expert’s testimony was unreliable.

Discussion

The court noted that the plaintiff has the burden of establishing their expert’s admissibility under FRE 702. The expert report consisted of a two-page list of all his opinions—most of which were factual statements about what he was retained for, what his company does, and what other companies had already provided for the roof repair. Although the plaintiff appeared to have named the expert to testify on construction management, his report did not contain any evidence or conclusions on such matters. Furthermore, though he reported a variety of incidents, such as being approached and offered bidding services, it was unclear how these incidents or evidence justified the only opinion stated in his report. The expert also suggested that he relied on the following information or data: the plaintiff’s scope of loss, the other expert’s roof inspection and bids, and an electric systems company’s site inspection and bid.  Nonetheless, he failed to explain in his testimony why he concluded these facts and data supported his opinions. The court could not simply take his word for it and, therefore, his testimony was unreliable and irrelevant.

Held

The motion to exclude the construction management expert witness’s testimony was granted.