Dysart v. Trustmark National Bank et al

Filing 128

MEMORANDUM OPINION re 117 MOTION to Strike. Signed by Judge Karon O Bowdre on 8/19/2020. (JLC)

FILED
2020 Aug-19 PM 12:45
U.S. DISTRICT COURT
N.D. OF ALABAMA

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
NELL DYSART,
Plaintiff,
v.
TRUSTMARK NATIONAL BANK,
Defendant.

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CIVIL ACTION NO.
2:13-CV-02092-KOB

MEMORANDUM OPINION
This matter comes before the court on Defendant Trustmark National Bank’s
motion to exclude the testimony and report of Plaintiff Nell Dysart’s expert Scott
Long, whom Ms. Dysart seeks to introduce as a damages expert. (Doc. 117).
Trustmark argues that, because Mr. Long is a real estate broker and not a licensed
appraiser, he is not a competent witness under Alabama law and his proposed
testimony does not meet the relevance requirements for expert witnesses. After
considering the submissions of the parties, the court finds that Alabama law does
not preclude Mr. Long’s testimony, that Mr. Long otherwise qualifies as
competent, and that his evidence would be relevant. Thus, the court will deny
Trustmark’s motion.
I.

Factual Background

This case arises out of an alleged wrongful foreclosure and sale of Ms.
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Dysart’s home by Trustmark, who held a mortgage note on the property. Ms.
Dysart alleges that Trustmark breached the mortgage contract by foreclosing on
her house without proper notice to her. Ms. Dysart’s damages claims rely in part
on the value of her home, and she intends to use Mr. Long—a real estate agent and
broker who worked on the subdivision where Ms. Dysart’s home is located—as an
expert witness regarding the home’s market value. Mr. Long is a licensed real
estate agent and broker in Alabama, but not a licensed appraiser.
II.

Standard of Review

Federal Rule of Evidence 702 governs the admissibility of expert testimony
and provides:
A witness who is qualified as an expert by knowledge, skill,
experience, training, or education may testify in the form of an
opinion or otherwise if:
(a) the expert’s scientific, technical, or other specialized knowledge
will help the trier of fact to understand the evidence or to determine a
fact in issue;
(b) the testimony is based on sufficient facts or data;
(c) the testimony is the product of reliable principles and methods;
and
(d) the expert has reliably applied the principles and methods to the
facts of the case.
Fed. R. Evid. 702.
The Supreme Court in Daubert v. Merrell Dow Pharmaceuticals, Inc.
established rules for a district court’s inquiry into the admissibility of expert
testimony under Rule 702. 509 U.S. 579 (1993). The proponent of any expert
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testimony bears the burden of showing that the expert meets the Daubert
requirements. United States v. Frazier, 387 F.3d 1244, 1260 (11th Cir. 2004). The
Eleventh Circuit has stated that that district courts should fulfill their
“gatekeeping” function concerning the admissibility of expert testimony under
Daubert by evaluating whether the expert testimony meets three requirements:
qualification, reliability, and helpfulness. Seamon v. Remington Arms Co., LLC,
813 F.3d 983, 988 (11th Cir. 2016).
First, under the “qualification” prong, the court must determine whether “the
expert is qualified to testify competently regarding the matters he intends to
address.” Seamon, 813 F.3d at 988 (quoting City of Tuscaloosa v. Harcros
Chemicals, Inc., 158 F.3d 548, 562 (11th Cir. 1998)) (citing in turn Daubert, 509
U.S. at 589). Second, under the “reliability” prong, the court must determine
whether the expert’s methodology “is sufficiently reliable as determined by the sort
of inquiry mandated in Daubert.” Id. A Daubert inquiry requires evaluating
“whether the reasoning or methodology underlying the testimony is scientifically
valid and ... whether that reasoning or methodology properly can be applied to the
facts in issue.” Daubert, 509 U.S. at 600 (quotation omitted). And finally, under
the “helpfulness” prong, the court must decide whether “the testimony assists the
trier of fact, through the application of scientific, technical, or specialized
expertise, to understand the evidence or to determine a fact in issue.” Seamon, 813
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F.3d at 988 (quoting Harcros, 158 F.3d at 562) (citing in turn Daubert, 509 U.S. at
589).
Daubert specifically dealt with scientific testimony, but standards of
scientific reliability, such as testability and peer review, do not apply to all forms
of expert testimony. Kumho Tire Co. v. Carmichael, 526 U.S. 137, 151 (1999).
For nonscientific expert testimony, “the trial judge must have considerable leeway
in deciding in a particular case how to go about determining whether particular
expert testimony is reliable.” Id. at 152. A district court may decide that
nonscientific expert testimony is reliable based “upon personal knowledge or
experience” of the witness. Id. at 150.
III.

ANALYSIS

In its motion, Trustmark argues that the court should exclude Mr. Long’s
testimony and report because he is not competent to testify under Federal Rule of
Evidence 601 and Alabama law, as he is a real estate agent and broker, not a
licensed appraiser. (Doc. 117). Trustmark asserts that Ala. Code §§ 34-27A-2, 3
govern valuation of real property and state that only a licensed appraiser can
perform such an evaluation of the monetary value of real property.
In response, Ms. Dysart argues that Mr. Long is uniquely qualified to place a
value on the house because he worked to develop and market the subdivision
where the house is located. (Doc. 121). Ms. Dysart further states that Trustmark
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misunderstands the applicability of Alabama law here, as the Code sections
referenced by Trustmark do not apply to expert testimony, merely to appraisals as
defined by the Code.
Ms. Dysart further asserts that Mr. Long qualifies as an appropriate expert
witness under Rule 702. She states that Mr. Long has worked in the real estate
business for 18 years and has a wealth of real estate experience that includes
estimating values for homes. Because he worked in selling the subdivision where
Ms. Dysart’s home is located, Mr. Long also originally sold Ms. Dysart’s house
and other houses in the subdivision, which required him to assess their market
value. Ms. Dysart additionally explains that Mr. long performed extensive
research and gathered information to make his value assessment.
In reply, Trustmark specifically asserts that it “never argued that Long’s
opinion is due to be excluded because of a lack of reliability itself,” but, instead,
argued that his opinion should be excluded under Rule 702 because it is not
relevant, as the Alabama Code forbids him giving an opinion on the valuation of a
house without an appraisal license. (Doc. 124 at 1). It argues that the application
of Rule 601 requires the application of the Alabama law forbidding appraisal by
anyone not licensed under the appraisal sections of the Alabama Code.
As an initial matter, Trustmark’s reply brief makes clear that it only
challenges the evidence’s relevance under Rule 702 because of Mr. Long’s alleged
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lack of competence under Rule 601. Federal Rule of Evidence 601 governs
competency of witnesses to testify at trial and states that “in a civil case, state law
governs the witness’s competency regarding a claim or defense for which state law
supplies the rule of decision.” Fed. R. Evid. 601. Trustmark asserts that, because
Ms. Dysart claims breach of contract under Alabama law, Alabama law regarding
appraisal of real property renders Mr. Long incompetent to testify to the home’s
market value.
Chapter 27A of Title 24 of the Alabama Code governs real estate appraisers.
Ala. Code § 34-27A-1. The Code defines “appraisal” as “[t]he act or process of
developing an opinion of value of real property; an opinion of the value of real
property; of or pertaining to appraising real property and related functions such as
appraisal practice or appraisal services.” Ala. Code § 34-27A-2(1). The same
provision also defines an “appraiser” as “[a] person who holds a license or
certification to complete a real estate appraisal in the state where real property that
is the subject of the appraisal is located.” Ala. Code § 34-27A-2(8).
The Alabama Code requires that anyone who performs an appraisal under
the statute for a fee or other consideration hold an appraisal license. Ala. Code §
34-27A-3(a). But, the provision has an exception stating that “this article shall not
apply to, or preclude, a person who is not a licensed real estate appraiser from
performing real estate market analysis, in that person's capacity as a licensed real
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estate broker or salesperson under this title” and that the article also does not apply
to “a licensed real estate broker or salesperson, who in the ordinary course of
business, gives an opinion to a potential seller or third party as to the recommended
listing price of real estate, or an opinion to a potential purchaser or third party as to
the recommended purchase price of real estate.” Ala. Code § 34-27A-3(c).
The court finds that the appraisal provisions in the Alabama Code do not
preclude Mr. Long from testifying in this case or render his purported evidence
irrelevant. The Alabama Code sections governing licensure of appraisers have no
direct reference to a valuation of property for the purposes of expert testimony.
See Ala. Code § 34-27A-3(c). Further, the statutes specifically contain an
exception allowing real estate brokers and salesmen, like Mr. Long, to perform
market analysis and offer opinions regarding the price of homes. See Ala. Code §
34-27A-3(c). Trustmark fails to provide the court with any authority indicating
that Mr. Long cannot offer such an opinion as an expert witness.
Because it cannot cite to directly applicable authority, Trustmark attempts to
rely on cases involving medical malpractice in which expert testimony was
excluded under state statutes. In the main case relied upon by Trustmark, the
Eleventh Circuit held that the district court had not properly considered a Georgia
statute specifically establishing the requirements for an expert in a medical
malpractice case. McDowell v. Brown, 392 F.3d 1283, 1296 (11th Cir. 2004). The
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court finds that case distinguishable from the case at hand. In McDowell, the state
statute at issue clearly dealt with competency of an expert witness to testify in a
medical malpractice case. See McDowell, 392 F.3d at 1296. Here, the statute has
no such reference to expert testimony.
In a similar case relied upon by Trustmark, the District Court for the Middle
District of Alabama, in determining whether to exclude evidence, examined the
applicability of an Alabama statute specifically delineating the requirements for
expert medical testimony in medical malpractice cases. Barton v. Am. Red Cross,
829 F. Supp. 1290, 1299 (M.D. Ala. 1993), aff'd, 43 F.3d 678 (11th Cir. 1994), and
aff'd, 43 F.3d 679 (11th Cir. 1994). Here, the statute at issue deals with licensure
for appraisals and contains not the barest mention of expert testimony. See Ala.
Code §§ 34-27A-2, 3. So, the court does not find the cases relied upon by
Trustmark persuasive.
Finally, a bankruptcy court in this district has previously considered real
estate broker testimony regarding the fair market value of a home. In re Sharpe,
425 B.R. 620, 638 (Bankr. N.D. Ala. 2010). Additionally, the Alabama Supreme
Court has, on at least one occasion, allowed expert testimony from a real estate
broker as to the value of real property. See Historic Blakely Auth. v. Williams, 675
So. 2d 350, 351 (Ala. 1995) (allowing the jury to consider expert testimony from a
real estate broker in a case involving just compensation for condemned property).
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Accordingly, Trustmark entirely lacks support for its argument that Mr. Long
cannot testify regarding the value of the property under Alabama law, and the court
will not exclude the evidence for lack of relevance because of lack of competence
pursuant to Rule 601.
Where a court deems a witness competent to testify on a substantive issue in
a case under Rule 601, the court should then conduct an analysis under Rule 702 to
determine admissibility. McDowell, 392 F.3d at 1295. Here, as discussed above,
Trustmark does not contest Mr. Long’s qualifications under Rule 702 outside of
the Rule 601 issue. Further, Ms. Dysart has shown that Mr. Long is a licensed real
estate broker with extensive experience in the real estate market generally and
extensive particular knowledge about the value of the homes in the subdivision
where Ms. Dysart’s home was located.
The court finds that this experience and knowledge could help the jury
understand the market value of Ms. Dysart’s home based on sufficient facts and
data. See Fed. R. Evid. 702. In other words, the court finds that Mr. Long can
competently provide reliable testimony about the market value of Ms. Dysart’s
home in a way that will assist the jury in determining the value of the home for
damages purposes, as Mr. Long can base his testimony on his extensive personal
knowledge and experience. See Seamon, 813 F.3d at 988; Kumho Tire, 526 U.S. at
150. So, the court finds that Ms. Dysart has shown that, pursuant to Rule 702 and
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Daubert and its progeny, the court should not exclude Mr. Long’s testimony.
Because the court finds that it should not exclude Mr. Long’s testimony
under either Rule 702 or Rule 601, the court will DENY Trustmark’s motion to
exclude Mr. Long’s expert testimony and report.
DONE and ORDERED this 19th day of August, 2020.

____________________________________
KARON OWEN BOWDRE
UNITED STATES DISTRICT JUDGE

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