Barnett v. JP Morgan Chase Bank, National Association

Filing 101

MEMORANDUM OPINION AND ORDER GRANTING IN PART and DENYING IN PART 82 MOTION in Limine Under Daubert to Exclude Certain Opinions of Plaintiff's Expert Evan D. Hendricks as set out herein. Signed by Judge Virginia Emerson Hopkins on 1/16/2014. (JLC)

FILED
2014 Jan-16 PM 03:25
U.S. DISTRICT COURT
N.D. OF ALABAMA

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
EASTERN DIVISION
APRIL K. BARNETT,
Plaintiff,
v.
JP MORGAN CHASE BANK,
NATIONAL ASSOCIATION, as
successor by merger to CHASE
HOME FINANCE, LLC,
Defendant.

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) Case No.: 1:12-CV-1745-VEH
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MEMORANDUM OPINION AND ORDER
I.

Introduction
This case is set for a trial on January 27, 2014, and a pretrial hearing and

preliminary charge conference on January 17, 2014. Pending before the court is
Defendant JP Morgan Chase Bank National Association’s (“Chase”) Motion in
Limine Under Daubert to Exclude Certain Opinions of Plaintiff’s Expert Evan D.
Hendricks (“Mr. Hendricks”) (Doc. 82) (the “Daubert Motion”) filed on December
27, 2013. Plaintiff April K. Barnett (“Ms. Barnett”) opposed the Daubert Motion on
January 7, 2014. (Doc. 96).
Accordingly, the Daubert Motion is now under submission and, for the reasons

explained below, is GRANTED IN PART and is otherwise DENIED.
II.

STANDARDS
A.

Evidentiary Rulings Generally

“All evidentiary decisions are reviewed under an abuse-of-discretion standard.”
See, e.g., General Elec. Co. v. Joiner, 522 U.S. 136, 141 (1997). “An abuse of
discretion can occur where the district court applies the wrong law, follows the wrong
procedure, bases its decision on clearly erroneous facts, or commits a clear error in
judgment.” United States v. Estelan, 156 F. App’x 185, 196 (11th Cir. 2005) (citing
United States v. Brown, 415 F.3d 1257, 1266 (11th Cir. 2005)).
Moreover, as the Eleventh Circuit has made clear, not every incorrect
evidentiary ruling constitutes reversible error:
Auto-Owners’ second argument is that it is entitled to a new trial
on the basis of what it describes as a number of erroneous evidentiary
rulings by the district court. Evidentiary rulings are also reviewed under
an abuse of discretion standard. Finch v. City of Vernon, 877 F.2d 1497,
1504 (11th Cir. 1989). Moreover, even if Auto-Owners can show that
certain errors were committed, the errors must have affected “substantial
rights” in order to provide the basis for a new trial. See Fed. R. Evid.
103(a). “Error in the admission or exclusion of evidence is harmless if
it does not affect the substantial rights of the parties.” Perry, 734 F.2d
at 1446. See also Allstate Insurance Co. v. James, 845 F.2d 315, 319
(11th Cir. 1988).
Haygood v. Auto-Owners Ins. Co., 995 F.2d 1512, 1515 (11th Cir. 1993). Therefore,
even the existence of many evidentiary errors does not guarantee the party appealing
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a new trial. Instead, such erroneous rulings by a district court must “affect the
substantial rights of the parties” for reversible error to occur.
B.

Rulings Regarding Experts Specifically

Rule 702 of the Federal Rules of Evidence allows expert testimony when (1)
the witness is qualified as an expert; and (2) his expertise “will assist the trier of fact
to understand the evidence or to determine a fact in issue . . . .” Fed. R. Evid. 702.
More specifically, Rule 702 states:
If scientific, technical, or other specialized knowledge will assist the
trier of fact to understand the evidence or to determine a fact in issue, a
witness qualified as an expert by knowledge, skill, experience, training,
or education, may testify thereto in the form of an opinion or otherwise,
if (1) the testimony is based upon sufficient facts or data, (2) the
testimony is the product of reliable principles and methods, and (3) the
witness has applied the principles and methods reliably to the facts of
the case.
Fed. R. Evid 702. Rule 702 must be read in conjunction with three (3) seminal
decisions by the Supreme Court of the United States related to expert testimony:
Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993); Joiner, supra;
and Kumho Tire Co. v. Carmichael, 526 U.S. 137 (1999).
Additionally, all rulings on Daubert motions are reviewed under an abuse of
discretion standard. See, e.g., Joiner, 522 U.S. at 141 ( “All evidentiary decisions are
reviewed under an abuse-of-discretion standard.”). “An abuse of discretion can occur

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where the district court applies the wrong law, follows the wrong procedure, bases
its decision on clearly erroneous facts, or commits a clear error in judgment.” United
States v. Estelan, 156 F. App’x 185, 196 (11th Cir. 2005) (citing United States v.
Brown, 415 F.3d 1257, 1266 (11th Cir. 2005)).
Concerning the issue of whether to hold a Daubert hearing, the Eleventh
Circuit has explained:1
In this case, after the government moved to exclude Tressel’s testimony,
the district court assessed the reliability of his opinions by conducting
a thorough Daubert hearing in which Tressel was asked, repeatedly,
what the bases for his opinions were. While some expert testimony will
be so clearly admissible that a district court need not conduct a Daubert
hearing in every case, see Kumho Tire, 526 U.S. at 150-52, 119 S. Ct. at
1175-76, in this case, the district court’s decision to evaluate the
admissibility of Tressel’s opinions in the context of a pre-trial hearing
was a perfectly reasonable one. Moreover, Frazier has not attacked the
timing or conduct of the Daubert hearing. And the record amply
establishes that Frazier was afforded every opportunity at the hearing to
adduce the foundations of Tressel’s challenged opinions. The district
court did not abuse its discretion when it conducted a Daubert hearing.
United States v. Frazier, 387 F.3d 1244, 1264 (11th Cir. 2004). Relatedly, the
Eleventh Circuit “also review[s] a trial court’s decision on whether to hold a Daubert
hearing for abuse of discretion.” Cook ex rel. Estate of Tessier v. Sheriff of Monroe
402 F.3d 1092, 1113 (11th Cir. 2005).
Finally, the burden under Rule 702 rests squarely with the proponent of the
1

No party has requested a Daubert hearing in this instance.
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expert witness:
The proponent of the expert testimony carries a substantial burden
under Rule 702.“The burden of laying the proper foundation for the
admission of the expert testimony is on the party offering the expert, and
admissibility must be shown by a preponderance of the evidence.”
Allison v. McGhan Med. Corp., 184 F.3d 1300, 1306 (11th Cir.1999)
(citing Daubert, 509 U.S. at 592 n. 10, 113 S. Ct. 2786).Thus, the
proponent must demonstrate that the witness is qualified to testify
competently, that his opinions are based on sound methodology, and that
his testimony will be helpful to the trier of fact. See, e.g., Frazier, 387
F.3d at 1260 (“The burden of establishing qualification, reliability, and
helpfulness rests on the proponent of the expert opinion....”); McCorvey
v. Baxter Healthcare Corp., 298 F.3d 1253, 1257 (11th Cir. 2002);
Maiz, 253 F.3d at 664.
See Cook, 402 F.3d at 1107.
III.

Rulings
Chase’s Daubert Motion seeks to preclude Mr. Hendricks from testifying about

five separate areas as discussed more fully below.
A.

Uncontested Portion

The bulk of Chase’s Daubert Motion contends that Mr. Hendricks should not
be allowed to offer an opinion regarding the amount or range of Ms. Barnett’s
specific damages. On January 6, 2014, Chase filed a notice relating to its Daubert
Motion which indicates that Ms. Barnett does not intend to call Mr. Hendricks for the
purpose of providing a damages calculation. (Doc. 94).
Ms. Barnett has neither opposed this notice nor otherwise contested the merits
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of Chase’s Daubert Motion pertaining to this area. Accordingly, that portion of the
Daubert Motion is GRANTED as unopposed, and Mr. Hendricks is HEREBY
PROHIBITED from offering any quantitative opinion(s) about the amount of
damages allegedly suffered by Ms. Barnett.
B.

Contested Portions

As summarized by Chase, the subjects of testimony which Ms. Barnett does
still contest are:
(a) any opinion about Chase’s conduct and whether it complied with its
own policies or procedures or otherwise made any mistakes in the
handling of Plaintiff’s mortgage loan and fire insurance proceeds; (b)
any opinion regarding, or referring to, the facts of other cases involving
Chase and in which Hendricks was a proffered expert; (c) any opinion
that the type of credit damages claimed by Plaintiff are “consistent” with
damages Hendricks has seen claimed by consumers in other lawsuits, or
any similar opinion that seeks to validate or confirm the type of damages
claimed by Plaintiff; and (d) any opinion that Plaintiff will be at risk for
not answering “no” on future credit applications to questions about
whether she had property foreclosed (or any similar opinion).
(Doc. 94 at 2 ¶ 2). The court addresses these and other areas of profered expert
testimony (as amplified by Ms. Barnett’s opposition) separately below.
1.

Opinions Chase’s Corporate Non-Compliance
and Industry Practices

Mr. Hendricks has offered opinions about Chase’s failure to follow its own
policies and procedures and specifically maintains that Chase’s treatment of Ms.

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Barnett “reflected serious defects in Defendant’s actual practices and grossly
inadequate supervision and quality controls.” (Doc. 82 at 31-32). Chase preliminarily
objects that Mr. Hendricks “has no qualifications to offer expert opinions on loan
servicing activities.” (Doc. 82 at 32). Chase also contends that such testimony would
not assist the trier of fact because a lay person is capable of hearing the evidence and
deciding whether Chase violated its own policies in its handling Ms. Barnett’s loan.
Id.
In response, Ms. Barnett maintains that Mr. Hendricks “36 years of experience
in the field [of] consumer information, and in the more specialized sub-field of credit
reporting . . . .” bestows him with the requisite qualifications to testify about Chase’s
failure to comply with its own internal loan servicing procedures. (Doc. 96 at 1); see
Frazier, 387 F.3d at 1260-61 (“While scientific training or education may provide
possible means to qualify, experience in a field may offer another path to expert
status.”); id. at 1261 (“The Committee Note to the 2000 Amendments of Rule 702
also explains that ‘[n]othing in this amendment is intended to suggest that experience
alone ... may not provide a sufficient foundation for expert testimony.’” (quoting Fed.
R. Evid. 702 advisory committee’s note (2000 amends.))).
Consistent with the qualification principles outlined in Frazier, the court find
that Mr. Hendricks’s substantial experience in the fields of consumer information
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generally and credit reporting more specifically renders him qualified to testify about
Chase’s noncompliance with its loan servicing and credit reporting practices and
procedures,2 including his years of accumulated internal data regarding Chase,3 the
way Chase maintains, uses, and discloses information,4 how that relates to credit
reporting on a consumer,5 and how that impacts on the credit reputation of consumers,
like Ms. Barnett.6
Relatedly, the court determines that Mr. Hendricks is qualified to testify about
industry practices,7 including how credit reporting agencies function and how they
respond to disputes and complaints by consumers.8 Mr. Hendricks is similarly
qualified to testify about the nature and purpose of credit, credit reports, and credit
scores.9
Additionally, the court concludes that Ms. Barnett has satisfied the helpfulness

2

(Doc. 96 at 19).

3

(Doc. 96 at 18).

4

(Doc. 96 at 15).

5

(Doc. 96 at 15).

6

(Doc. 96 at 15).

7

(Doc. 96 at 19).

8

(Doc. 96 at 12, 13).

9

(Doc. 96 at 18).
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prong of Rule 702. In particular, the court is persuaded that Mr. Hendricks’s expert
testimony in all these areas will assist the jury and offer “more than what lawyers for
the parties can argue in closing arguments.” Frazier, 387 F.3d at 1262-63.
Accordingly, the corporate compliance section of the Daubert Motion is
DENIED, and Mr. Hendricks is HEREBY PERMITTED to offer opinions about
Chase’s noncompliance with its own policies and procedures in its handling Ms.
Barnett’s loan and the reporting of her credit with the exception of any negligencerelated opinions like those identified in Ms. Barnett’s opposition ( i.e., Chase’s failure
to exercise adequate care) because no negligent hiring, training, and/or supervision
claim remains in the lawsuit.10
2.

Opinions On Chase’s Conduct in Other Cases

Chase seeks to prohibit Mr. Hendricks from testifying about its alleged
mistreatment of other borrowers in other cases on the basis that such evidence “would
not assist the trier of fact in understanding or reaching a decision on any of the claims
in this case, nor are they relevant to the jury’s determinations.” (Doc. 82 at 34). Ms.
Barnett counters that this evidence is relevant to her fraud claims to show the prima
facie element of Chase’s intent to deceive her and its possible financial motive to
misrepresent the status of her loan. This type of expert evidence is also relevant to
10

(Doc. 96 at 14).
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establishing Ms. Barnett’s breach of contract claim.
Accordingly, the Chase’s conduct in other cases section of the Daubert Motion
is DENIED, and Mr. Hendricks is HEREBY PERMITTED to offer opinions about
Chase’s noncompliance with its own policies and procedures in its handling of loans
by other borrowers, including in particular its handling of Mrs. Barlow’s loan.11
3.

Opinions On
Damages

Ms. Barnett’s Claimed Credit

Chase seeks to preclude Mr. Hendricks from offering opinions about Ms.
Barnett’s credit damages generally and, more particularly, the stress that its conduct
toward her allegedly caused her. Chase raises qualification, helpfulness, and Fed. R.
Evid. 403 objections. Ms. Barnett responds that Mr. Hendricks’s practical experience
renders him qualified to provide these damages-related opinions and that the
helpfulness and relevancy of such expert testimony substantially outweighs any
prejudicial effects.
To the extent that Mr. Hendricks is attempting to assert that Chase’s conduct
caused her stress or mental anguish, the Daubert Motion is GRANTED because Ms.
Barnett has not established (and cannot establish) that Mr. Hendricks is qualified to
provide a medical opinion as to causation with respect to Ms. Barnett’s subjective
11

(See Doc. 99 at 6-7 (Ms. Barnett’s opposition to Chase’s non-Daubert Motion in
Limine discussing Chase’s treatment of another comparable borrower, Mrs. Barlow)).
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state of mind, including her lack of well being,12 sense of helplessness,13 having a
cloud hanging over her life,14 being in credit jail,15 being afraid to answer “no” to a
question from a potential future lender about delinquencies and foreclosures,16 types
of damages that are common to victims who have suffered mental anguish damage
under comparable circumstances as Ms. Barnett,17 and the like.
The remainder of the Daubert Motion relating to this section is DENIED.
Accordingly, Mr. Hendricks is HEREBY PERMITTED to offer opinions on the
following objective topics relating to Ms. Barnett’s claimed damages, including: (1)
the chilling effects of anticipated credit problems which might prevent the consumer
from applying for credit in the future because a lender in one way or another will ask
about delinquencies and foreclosures and because there are penalties for not
answering those questions truthfully,18 (2) debt collection efforts, such as, calls and

12

13

(Doc. 96 at 4).
(Doc. 96 at 4).

14

(Doc. 96 at 4).

15

(Doc. 96 at 4).

16

(Doc. 96 at 8, 9).

17

(Doc. 96 at 19-20).

18

(Doc. 96 at 4, 8, 9).
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letters,19 and (3) expended time and energy to correct errors not of one’s making.20
4.

Opinions On Ms. Barnett’s Answers To
Foreclosure Questions On Future Credit
Applications

Finally, Chase seeks to prohibit Mr. Hendricks from testifying about risks
associated with Ms. Barnett’s answers to foreclosure-related questions on future
credit applications. Chase characterizes this type of evidence as an improper legal
opinion. (Doc. 82 at 38). Ms. Barnett retorts that Mr. Hendricks is qualified to render
an opinion on this topic due to his vast experience in the field of consumer
information and sub-field of credit reporting.
To the extent that Mr. Hendricks seeks to offer an opinion about Ms. Barnett’s
specific criminal or civil legal exposure when answering foreclosure-related questions
on a Uniform Residential Loan Application, this part of the Daubert Motion is
GRANTED. However, consistent with the rulings above, Mr. Hendricks will be
permitted to testify about certain objective credit chilling effects, including why
answering such questions might be difficult for Ms. Barnett and generally that there
are penalties for not answering those questions truthfully. Therefore, to that extent,
this part of the Daubert Motion is DENIED.

19

(Doc. 96 at 4).

20

(Doc. 96 at 4).
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IV.

Conclusion
Therefore, Chase’s Daubert Motion is GRANTED IN PART and is otherwise

DENIED.
DONE and ORDERED this the 16th day of January, 2014.

VIRGINIA EMERSON HOPKINS
United States District Judge

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