Continental Motors, Inc. v. Jewell Aircraft, Inc. et al

Filing 111

ORDER granting in part and denying in part 79 Motion to Strike expert report of Mack B. Binion ; denying [] Motion to prohibit Mr Binion from testifying as a witness. Signed by Chief Judge William H. Steele on 10/4/2013. (srr)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
CONTINENTAL MOTORS, INC.,
Plaintiff,
v.
JEWELL AIRCRAFT, INC., et al.,
Defendant.

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CIVIL ACTION 12-0221-WS-C

ORDER
This matter comes before the Court on defendant Jewell Aircraft’s Motion to Strike
Expert Report of Mack B. Binion and Motion to Prohibit Mr. Binion from Testifying as a
Witness (doc. 79). The Motion has been briefed and is now ripe.1
I.

Relevant Background.
A.

Procedural History.

Following an aviation accident in Kentucky in 2007, Continental Motors, Inc.
(“Continental”) was sued by the injured occupants of the aircraft (the “Crouch Action”). The
plaintiffs in the Crouch Action maintained that the crash was caused by a defective magneto
manufactured by Continental and installed by a man named John Jewell, who was (among other
roles and other capacities) the president of Jewell Aircraft, Inc. (“Jewell Aircraft”). Jewell
Aircraft was a Continental distributor, and the two entities had entered into a Product Support
Agreement (the “Agreement”) in January 2005. That Agreement contained a clause in which
Jewell Aircraft agreed to “indemnify and hold [Continental] harmless from and against all
claims, demands, obligations and liabilities … to the extent that such claims, demands,

1

Also included in defendant’s Motion is a Motion to Extend Discovery Deadlines;
however, that motion is moot, given intervening developments including (most notably) the
extension order entered on March 13, 2013 and the subsequent stay of all discovery entered on
May 3, 2013. (See docs. 82, 107.)

obligations or liabilities have resulted from or arisen out of any act or omission of [Jewell
Aircraft], its officers, agents, representatives, servants, or employees.” (Doc. 92, Exh. A, ¶ 21.)
The Crouch Action proceeded to trial in this District Court in the summer of 2011.
Shortly before trial, Judge DuBose entered rulings delineating four triable claims brought by the
Crouch plaintiffs, to-wit: (i) a claim of strict liability alleging that Continental’s magneto was an
unreasonably dangerous product; (ii) a claim of breach of warranty alleging that Continental’s
magneto was neither merchantable nor fit for its intended use; (iii) a claim of negligence alleging
that Continental breached a duty to warn end users that its magneto was unsafe; and (iv) a claim
of negligent installation alleging that Continental was liable for negligent installation of the
magneto by John Jewell and/or Jewell Aircraft, Inc. On the 14th day of trial in the Crouch
Action, Judge DuBose granted Continental’s motion for judgment as a matter of law on the
negligent installation claim, thereby eliminating the only vicarious liability claim while retaining
the causes of action seeking to hold Continental liable for its own alleged wrongdoing with
respect to the magneto it had designed and manufactured. The remaining three claims were
submitted to the jury, which returned a verdict in Continental’s favor. That verdict was affirmed
on appeal by the Eleventh Circuit earlier this year.
This litigation is a spinoff of the Crouch Action, and constitutes Continental’s attempt to
recoup more than $2 million in attorney’s fees and costs it expended in defending against the
Crouch Action. Continental’s theory is that Jewell Aircraft is contractually responsible for
reimbursing those attorney’s fees and costs under the Agreement’s indemnity provision. This
Court has written extensively to the legal effect and application of that indemnity provision
under Alabama law on multiple occasions. Most recently, the undersigned entered an Order
(doc. 109) on October 1, 2013, denying (with one exception) Jewell Aircraft’s motion for
summary judgment on liability issues relating to that indemnity provision. A previous Order
(doc. 23) entered on July 30, 2012 and partially granting Jewell Aircraft’s Rule 12(b)(6) motion,
is of central importance to the present Motion to Strike, and will therefore be examined in some
detail infra.
B.

The Binion Expert Report.

Should this action be litigated to trial, Continental will bear the burden of establishing its
damages. In particular, Continental will be required to prove that the subject attorney’s fees and
costs for which it seeks reimbursement are both (i) within the scope of the indemnity provision

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of the Agreement, and (ii) otherwise recoverable under Alabama law. Much of the parties’
disagreement underlying the Motion to Strike proceeds from misapprehension or oversight of
these fundamental, separate requirements.
One avenue that Continental identifies as a means of satisfying its burden of proof as to
apportionment of damages is the expert testimony of Mack B. Binion, Esq., whose 19-page
expert report was filed on March 1, 2013 and is the subject of Jewell Aircraft’s Motion to Strike.
Binion’s report sets forth his expert opinion that the hourly rates charged by Continental’s
lawyers in the Crouch Action “were and are reasonable; particularly given all aspects of the
retention and the ability, experience and background of the attorneys involved in the defense of
the Underlying Case.” (Doc. 77, Exh. 2, at 4.) With regard to the overall level of attorney’s fees
and costs incurred by Continental in defense of the Crouch Action, Binion opines that, inter alia,
“the Fees were and are not excessive; the time and labor required was necessary; the involved
attorneys possessed the requisite skill to perform the legal services properly,” and so on through
the remaining factors established by the Alabama Supreme Court for assessing reasonableness of
attorney’s fees. (Id. at 11-12.)2
With respect to apportionment of fees between the negligent installation claim (as to
which this Court has ruled that attorney’s fees may be recoverable under Alabama law and the
applicable Agreement) and the strict liability/breach of warranty/failure to warn claims (as to
which this Court has ruled that attorney’s fees are not recoverable under Alabama law), Binion
offers a series of expert opinions that lie at the heart of Jewell Aircraft’s Motion to Strike. In
particular, Binion opines that “Plaintiffs’ causation theory(s), coupled with the precious few
undisputed facts, made it virtually impossible to separate their claims against CMI and Jewell,
2

Jewell Aircraft’s Motion to Strike requests that Binion’s expert report be stricken
in its entirety and that Binion be excluded from testifying altogether; however, the sweeping, allencompassing nature of this request amounts to substantial overreaching. After all, defendant
does not attack Binion’s proffered opinions concerning such matters as reasonableness of hourly
rates, necessity of time and labor spent, or reasonableness of total fees expended in the Crouch
Action. These aspects of Binion’s opinion simply have not been challenged; indeed, the Motion
to Strike does not advance any possible justification for excluding Binion’s testimony on those
topics. Whatever else may be said, then, nothing in the Motion to Strike would in any way
trammel Binion’s ability to opine to the jury that the hourly rates were reasonable, that the total
number of hours expended by Continental’s counsel in defending against the Crouch Action
were reasonably necessary, that the costs and expenses were reasonably incurred, and so on.

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i.e., negligent installation, and their other claims against CMI, i.e., warranty, strict liability, etc.
To the contrary, Plaintiffs’ factual and legal theories all led to Jewell’s Repair Shop in Holly
Springs, Mississippi and Jewell’s overhaul of plane’s engine in March – April, 2005.” (Doc. 77,
Exh. 2, at 13-14.) In Binion’s view, all of the Crouch plaintiffs’ claims (regardless of how they
were nominally pled, labeled, and tried) amounted to “combined and concurring” claims, such
that “the alleged defectiveness of the magneto was a combination of acts and omissions of Jewell
… and related allegations against CMI.” (Id. at 14-15.) Binion’s opinion, then, is that even
though the Crouch plaintiffs brought claims against Continental alleging that Continental had
defectively designed the magneto and failed to warn consumers about its unreasonably
dangerous condition, those claims actually hinged on theories combining Jewell Aircraft’s
purported wrongdoing in installing the magneto improperly and Continental’s purported
wrongdoing in failing to design and manufacture the magneto to withstand the effects of Jewell
Aircraft’s poor installation. (Id.) Proceeding from this “combined and concurring” hypothesis,
Binion opines that “a qualified informed attorney could correctly contend that every dollar spent
in defense of the case resulted from or arose out of Plaintiffs’ allegations as to the activities of
Jewell.” (Id. at 16.)
Binion goes on to acknowledge U.S. Supreme Court precedent favoring “some
deduction” from attorney’s fees in “messy” or “untidy” complex litigation, and identifies a
“common sense factor” (taking into account the background, experience and capabilities of
counsel on both sides of the Crouch Action) from applicable precedents to use as a guide for
making that deduction. (Id.) After considering those facts and reasoning that both sides in
Crouch were incentivized to litigate the case efficiently, Binion concludes that “a fifteen percent
(15%) reduction from the Fees incurred … is appropriate; the 15% being attributable to possible
inefficiencies and the very few, if any, matters arguably not resulting from, not arising out of or
unrelated to Plaintiffs’ allegations as to the acts and omissions of Jewell.” (Id. at 16-17.) On
that basis, Binion recites his ultimate opinion that “85% of the Fees … incurred by CMI in
connection with the Crouch case and its trial and appeal resulted from Jewell’s actions and
omissions during the overhaul, including the installation of the magneto, and/or related to

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CMI’s defense of the negligent installation claim and that such Fee(s) were in all respects
reasonable and necessary in CMI’s defense of Plaintiffs’ claims.” (Id. at 17 (emphasis added).)3
Without waiting to take Binion’s deposition, Jewell Aircraft exacerbated the parties’
voluminous pretrial motion practice just six days after the report was filed, by moving to strike
the Binion expert report and to exclude him from testifying. The crux of the Motion to Strike is
that certain of Binion’s opinions (i.e., that 85% of the attorney’s fees and costs incurred by
Continental in the Crouch Action resulted from John Jewell’s actions in installing the magneto
and/or Continental’s defense of the negligent installation claim) are irreconcilable with both
previous rulings and Alabama law, as well as fundamental Daubert expert admissibility
principles.
II.

Analysis.
A.

The Significance of the July 30, 2012 Order.

After careful review of the 60+ pages of briefing about the admissibility of Binion’s
expert report, the Court is struck by the fundamental disconnect between the parties’ positions.
The critical point of divergence in their respective arguments is the Order (doc. 23) entered by
this Court on July 30, 2012, granting in part Jewell Aircraft’s Rule 12(b)(6) Motion. Defendant
insists that the July 30 Order set forth principles to which plaintiff’s experts must adhere, while
plaintiff would disregard, circumvent, re-litigate or re-imagine the July 30 Order at this juncture.
To resolve these issues, we must first recap the original briefing that culminated in the July 30
Order.
In its Rule 12(b)(6) Motion, Jewell Aircraft argued, inter alia, that Alabama law imposed
constraints on its indemnity obligations to Continental under the Agreement (which by its terms
was governed by Alabama law). In particular, Jewell Aircraft relied on Stone Bldg. Co. v. Star
Elec. Contractors, 796 So.2d 1076 (Ala. 2000), a contractual indemnity case in which the
Alabama Supreme Court, citing earlier authorities, wrote the following:
3

In Binion’s report, “Jewell” is a defined term that means “John Jewell”
individually, not Jewell Aircraft, Inc. (Id. at 6.) Because Jewell Aircraft’s contractual indemnity
obligation attached to the acts or omissions of itself, its officers, agents, representatives, servants
or employees, there was no indemnity duty unless John Jewell was acting in one or more of these
capacities. What kind of showing Continental must make on this point (and whether that
showing is satisfied only by proof of the actual relationship or whether the manner which the
claim was formulated is dispositive) is a topic beyond the scope of this Order.

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“The indemnification of attorney fees is … subject to certain limitations. …
[T]here is considerable authority holding that an indemnitee is precluded from
recovering attorney fees where the indemnitee has been required to defend
accusations which encompass his own separate wrongful acts. … In other words,
indemnification, including attorney fees, is allowed where one is defending claims
predicated solely upon another defendant’s negligence; however, where one is
defending for his own benefit, an award of attorney fees will not be allowed.”
Stone, 796 So.2d at 1092 (citations omitted). From this language, Jewell Aircraft reasoned that it
owed no indemnity obligation to Continental for attorney’s fees accrued in defending against the
Crouch Action claims for strict liability, negligent failure to warn, and breach of warranty,
because those claims alleged wrongdoing by Continental (as opposed to vicarious liability for the
conduct of Jewell Aircraft). In response, Continental did not dispute that Stone accurately
reflects Alabama law. Continental did not argue that this passage from Stone is inapplicable to
contractual indemnity cases. Instead, Continental’s Rule 12(b)(6) stance was one of nearcapitulation, as it acknowledged that “it may eventually be determined that CMI is not entitled to
recover the fees and expenses incurred solely in its defense of the claims exclusive to CMI.
However, there should be no question under Alabama law that CMI is entitled to recover the fees
and expenses related to the agency/Negligent Installation claim.” (Doc. 10, at 44 (footnote
omitted).)4
This issue having been thus framed by the parties, the undersigned addressed it in the
July 30 Order by accepting and adopting Stone’s language as an accurate characterization of
Alabama law’s limitations on contractual indemnity with respect to recovery of attorney’s fees.
The July 30 Order recognized that Stone prohibited indemnification of attorney’s fees accrued by
an indemnitee in defending against claims based on its own alleged wrongdoing, and concluded
that no factual determinations were needed to assess whether the strict liability / failure to warn /
4

In an accompanying footnote, Continental added a disclaimer clarifying that it “is
not conceding that it is barred from recovering all of its costs and fees incurred in the Crouch/
Hudson case. Indeed, if it is determined that but for the negligence of the Defendants there
would have no [sic] accident and no claims against CMI first place [sic], then Defendants should
have to indemnify CMI for amounts that it would have otherwise not incurred.” (Doc. 10, at 44
n.19.) The footnote did not elaborate on this caveat, much less identify any means of reconciling
it with Stone or Alabama law. Yet this was the sum total of Continental’s argument against
dismissal of its claims for indemnity against Jewell Aircraft with regard to the Crouch Action
claims alleging wrongdoing by Continental itself (i.e., the strict liability, negligent failure to
warn, breach of warranty causes of action).

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breach of warranty claims against Continental in the Crouch Action fell within the scope of
Stone’s prohibition. In that regard, the July 30 Order reasoned:
“Without question, those claims did indeed encompass Continental’s own
allegedly wrongful acts, and Continental was defending those claims for its own
benefit. Thus, Stone clearly forbids Continental from recovering its attorney’s
fees as to those claims. Nor does Continental suggest that Stone is not good law
or that it is distinguishable in any meaningful way. Simply put, there is no
reasonable basis for deeming the Crouch Action claims that reached a jury to be
amenable to indemnification of attorney’s fees under Alabama law.”
(Doc. 23, at 26.)5
The ultimate conclusion of the July 30 Order was that Jewell Aircraft’s Rule 12(b)(6)
Motion was “granted as to the portion of Counts I and II in which plaintiff seeks recovery of
attorney’s fees and other costs incurred in defense of the negligence, breach of warranty and
strict liability claims in the underlying action, and those aspects of Counts I and II are dismissed
for failure to state an actionable claim for contractual indemnity under Alabama law.” (Id. at 28,
¶ 3.) The July 30 Order clarified that this action would proceed against Jewell Aircraft as to “the
portions of Counts I and II seeking indemnity of attorney’s fees and defense costs incurred by
plaintiff in defending against the negligent installation cause of action in the underlying case.”
(Id. at 28, ¶ 6.)
In its Motion to Strike, Jewell Aircraft correctly argues that the Binion expert report
conflicts with these clear rulings in the July 30 Order. Again, Binion opines that “85% of the
Fees … incurred by CMI in connection with the Crouch case and its trial and appeal resulted
from Jewell’s actions and omissions during the overhaul … and/or related to CMI’s defense of
the negligent installation claim.” (Doc. 77, Exh. 2, at 17.)6 As the July 30 Order makes clear,
5

The July 30 Order also rejected Continental’s unsupported suggestion in briefing
the Rule 12(b)(6) motion that if Jewell Aircraft’s negligence was the but/for cause of the airplane
crash, then Jewell Aircraft should be liable for 100% of Continental’s attorney’s fees. On that
point, the July 30 Order noted that Continental had provided no authority for such a “but/for
causation” exception to the rule in Stone, and that negligent failure to warn, breach of warranty,
and strict liability claims in the Crouch Action unquestionably encompassed Continental’s own
separate allegedly wrongful acts (i.e., defects in the magneto’s manufacture and design), such
that Stone would prohibit an award of attorney’s fees via Continental’s indemnity claim relating
to those matters. (See doc. 23, at 27 n.29.)
6

Similarly problematic is Binion’s opinion that “every dollar spent in defense of
the case resulted from or arose out of Plaintiffs’ allegations as to the activities of Jewell.” (Doc.
(Continued)
-7-

however, there is no disjunctive “and/or” formulation for indemnification of attorney’s fees in
this case. These requirements are cumulative, not alternative. In other words, for Continental’s
attorney’s fees to be reimbursable, they must (i) fall within the scope of the indemnity provision
of the Agreement (i.e., the “resulted from Jewell’s actions and omissions during the overhaul”
part of the Binion statement), AND (ii) comport with Alabama’s limitations on contractual
indemnity as set forth in the July 30 Order (i.e., the “related to CMI’s defense of the negligent
installation claim” part of the Binion statement). Plaintiff must satisfy both the contractual
requirement and the Alabama common-law requirement to satisfy its burden of proof. One or
the other will not suffice. As the Binion report adopts an either/or rather than a both/and
formulation of these requirements, his opinion is in derogation of this Court’s ruling on the Rule
12(b)(6) Motion.7 This same principle defeats Continental’s defense of Binion’s opinion as

77, Exh. 2, at 16.) Such language may have the virtue of tracking the indemnity clause of the
Agreement, but it also disregards the July 30 Order’s findings that Alabama law imposes
limitations on the recovery of attorney’s fees in the contractual indemnity context, above and
beyond the contract language.
7

The deviation of Binion’s expert opinion from the July 30 Order and the Alabama
Supreme Court’s Stone opinion (on which the July 30 Order relied) is underscored by the portion
of his report in which he reasons that no matter what the Crouch plaintiffs called their claims,
they all related back to John Jewell’s overhaul of the aircraft because the Crouch plaintiffs’
theory was that Jewell had done bad work in installing the magneto and that Continental’s
magneto was defective because it could not withstand the stresses created by Jewell’s installation
errors. (Doc. 77, Exh. 2, at 14-15.) This was Binion’s “combined and concurring” rationale, that
if all the Crouch claims could be tied back to Jewell Aircraft’s alleged negligence in some way,
then Continental’s attorney’s fees are reimbursable for all such claims. In so opining, Binion
appears to have concerned himself only with fitting those claims within the ambit of the
indemnity provision of the Agreement, with no regard for the additional prerequisite that such
claims satisfy Alabama’s constraints on contractual indemnity as set forth in Stone and the July
30 Order. As the July 30 Order observed, the Alabama Supreme Court unequivocally specified
that “indemnification, including attorney fees, is allowed where one is defending claims
predicated solely upon another defendant’s negligence; however, where one is defending for his
own benefit, an award of attorney fees will not be allowed.” Stone, 796 So.2d at 1092 (citations
omitted). Under Binion’s “combined and concurring” theory, Continental was defending the
negligence/breach of warranty/strict liability claims in the Crouch Action both for its own
benefit and to defend against Jewell Aircraft’s wrongdoing. But Stone disallows attorney’s fees
for claims that “encompass [the indemnitee’s] own separate wrongful acts” or claims in which
the indemnitee “is defending for his own benefit.” Even if Binion’s “combined and concurring”
theory were accepted to link the Crouch claims to Jewell Aircraft’s acts and omissions, those
(Continued)
-8-

“track[ing] the operative language from the indemnity clause of the Product Support
Agreement.” (Doc. 85, at 11.)8 Pursuant to the July 30 Order, tracking the operative language of
the contractual indemnity provision is not enough for attorney’s fees to be reimbursable under
Alabama law.
Continental’s rebuttal to the foregoing as it relates to the pending Motion to Strike is
unpersuasive. In its brief, Continental acknowledges the July 30 Order’s ruling that “CMI is not
entitled to fees and expenses related to its defense of direct allegations or claims.” (Doc. 85, at
10.) Yet Continental then devotes some seven pages of its brief to attacking Jewell Aircraft’s
interpretation of Alabama law, without acknowledging that Jewell Aircraft’s arguments on this
point are wholly aligned with the July 30 Order. (See id. at 20-26.) In particular, Continental
now insists that the Alabama Supreme Court in Stone misapplied Alabama law by incorrectly
importing common-law indemnity concepts into the contractual indemnity context. Of course,
this Court’s Rule 12(b)(6) ruling rested in large part on that aspect of Stone. Without requesting
it in so many words, then, Continental is seeking reconsideration of the July 30 Order. Again,
the July 30 Order adopted defendant’s Rule 12(b)(6) argument that Alabama law (as set forth in
the Stone opinion) forbids Continental from recovering attorney’s fees relating to the defense of
accusations encompassing its own alleged wrongful acts, but allows such recovery only for the
defense of claims predicated solely on Jewell Aircraft’s alleged wrongful acts. If Continental
believed that Stone did not stand for the proposition for which Jewell Aircraft cited it in briefing
the Motion to Dismiss (i.e., that in contractual indemnity cases, Alabama law allows an
indemnitee to recover attorney’s fees only for the defense of claims predicated solely upon
another’s negligence, not for the defense of claims for the indemnitee’s own benefit), then

claims still encompassed Continental’s own alleged wrongful acts and Continental was still
defending those claims for its own benefit; therefore, indemnification of attorney’s fees would
not be available under Alabama law. Binion’s opinion on this point would shrink Alabama’s
limitations on contractual indemnity well beyond the parameters implemented in the July 30
Order.
8

In defending Binion’s report, Continental argues at length that Binion’s opinions
are permissible because they conform to the broad language of the indemnity agreement. (See
doc. 85, at 25-26.) But Continental overlooks the clear additional constraint imposed by the July
30 Order’s interpretation of Alabama law.

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Continental had a full and fair opportunity to present that argument at the Rule 12(b)(6) stage. It
did not do so, but instead de facto acquiesced to defendant’s proposed application of Stone to the
Crouch Action claims. Having failed during motion-to-dismiss briefing to advance a previously
available argument that Stone does not accurately reflect Alabama law in the contractual
indemnity context, Continental may not relitigate the question here via backdoor motion for
reconsideration raised for the first time some eight months after the July 30 Order was decided.
See, e.g., Exxon Shipping Co. v. Baker, 554 U.S. 471, 485 n.5, 128 S.Ct. 2605, 171 L.Ed.2d 570
(2008) (motions to reconsider “may not be used to relitigate old matters, or to raise arguments or
present evidence that could have been raised prior to” the previous ruling).9
Nor does Continental improve its position by arguing that Jewell Aircraft’s indemnity
obligations are established not by reference to the labels used in the Crouch plaintiffs’ complaint,
but by “looking beyond the complaint to the facts presented and case tried by the Crouch
Plaintiffs.” (Doc. 85, at 21 n.13.)10 To the extent that this contention amounts to another
implicit attempt to obtain reconsideration of the July 30 Order, it fails for the reasons described
supra. Besides, the July 30 Order did not simply look to the Crouch plaintiffs’ initial pleading to
ascertain the extent of Jewell Aircraft’s indemnity obligation, but instead looked to Judge
DuBose’s delineation (just days before trial) of the specific triable claims and causes of action
9

See also American Home Assur. Co. v. Glenn Estess & Associates, Inc., 763 F.2d
1237, 1239 (11th Cir. 1985) (“There is a significant difference between pointing out errors in a
court’s decision on grounds that have already been urged before the court and raising altogether
new arguments on a motion to amend; if accepted, the latter essentially affords a litigant two
bites at the apple.”) (citations, footnote, and internal quotation marks omitted); Garrett v.
Stanton, 2010 WL 320492, *2 (S.D. Ala. Jan. 18, 2010) (“Far too often, litigants operate under
the flawed assumption that any adverse ruling on a dispositive motion confers upon them license
… to relitigate issues that have already been decided, to champion new arguments that could
have been made before, and otherwise to attempt a ‘do-over’ to erase a disappointing outcome.
This is improper.”); Dyas v. City of Fairhope, 2009 WL 5062367, *3 (S.D. Ala. Dec. 23, 2009)
(“Motions to reconsider serve a valuable but limited function. They do not exist to permit losing
parties to prop up arguments previously made or to inject new ones …. They do not, in short,
serve to relieve a party of the consequences of its original, limited presentation.”).
10

The undersigned is well aware of the Alabama authorities on which plaintiff relies
for this proposition. See, e.g., Holcim (US), Inc. v. Ohio Cas. Ins. Co., 38 So.3d 722, 730 (Ala.
2009) (“under Alabama law, when determining liability under an indemnity provision, a court
may look beyond the complaint in the underlying action to the underlying facts shown by
admissible evidence”).

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that would be litigated at trial in the Crouch Action. Those facts (not just the plaintiffs’
pleading) confirm that, with the exception of the negligent installation claim, all of the Crouch
plaintiffs’ triable claims against Continental were “accusations which encompass [Continental’s]
own [alleged] wrongful acts” in defectively designing or manufacturing the magneto, failing to
warn of the magneto’s unreasonably dangerous character, and breaching warranties of
merchantability and fitness. As to those triable claims, they “encompass[ed] [Continental’s] own
separate wrongful acts,” and Continental was unquestionably “defending for [its] own benefit,”
such that “an award of attorney fees will not be allowed” under Stone and Alabama law. See
Stone, 796 So.2d at 1092. Looking beyond the Crouch Complaint would not alter the conclusion
set forth in the July 30 Order, nor would it enable Continental to obtain indemnity for attorney’s
fees incurred in defending claims for its own benefit predicated on its own alleged wrongdoing.11
The bottom line is this: Binion’s expert report evaluates recoverability of attorney’s fees
and defense costs in a manner that conflicts with the July 30 Order. He posits that Continental’s
fees and costs incurred in the Crouch Action may be reimbursed via indemnity as long as they
resulted from Jewell Aircraft’s acts or omissions, and that all defense costs associated with the
strict liability / breach of warranty / negligent failure to warn claims alleging Continental’s own
wrongdoing are recoverable as long as those claims can somehow be traced back to the
“combined and concurring” fault of Jewell Aircraft. As that reasoning is fundamentally
incompatible with this Court’s ruling on the Rule 12(b)(6) Motion, and as any attempt by
Continental at this time to relitigate the determination of Alabama law undergirding that ruling
based on previously available (but unasserted) arguments would be improper, Binion’s expert
report cannot stand in its present form. Accordingly, he will not be allowed to present opinions
to the jury that call for reimbursement of costs of defense for any claim encompassing

11

To the extent that Continental argues that the alleged lack of proof of its
wrongdoing at the Crouch trial means that it is entitled to indemnity on all of its claims,
Continental is trying to have it both ways. As Continental itself recognized in summary
judgment briefing, an indemnitee’s right to recover defense costs is not fixed by the merits of the
underlying claims. (See doc. 109, at 14-16.) Thus, the Crouch plaintiffs’ lack of success against
Continental at trial (as to claims in which they sought to hold Continental liable for its own
alleged wrongdoing in making a defective magneto) neither expands nor shrinks Jewell
Aircraft’s indemnity obligations for attorney’s fees under Alabama law or the Agreement.

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Continental’s own acts as long as such claim may plausibly be said to have a direct or indirect
logical nexus to something Jewell Aircraft did or did not do.
B.

Application of Daubert Principles.

Aside from its arguments related to the July 30 Order, Jewell Aircraft contends that
Binion’s methodology runs afoul of Daubert principles. Courts considering the admissibility of
expert testimony under Rule 702, Fed.R.Evid., must perform a rigorous three-part inquiry, one
component of which is considering whether “the methodology by which the expert reaches his
conclusions is sufficiently reliable.” Rosenfeld v. Oceania Crusies, Inc., 654 F.3d 1190, 1193
(11th Cir. 2011) (citations omitted). “Under Daubert, the reliability of the expert’s methodology
is a context-specific inquiry.” Tampa Bay Water v. HDR Engineering, Inc., --- F.3d ----, 2013
WL 5305346, *10 (11th Cir. Sept. 23, 2013); see also Hendrix ex rel. G.P. v. Evenflo Co., 609
F.3d 1183, 1194 (11th Cir. 2010) (“district courts have substantial discretion in deciding how to
test an expert’s reliability”). Defendant’s position is that Binion’s proffered expert opinions are
unreliable because, inter alia, he reviewed insufficient documentation about the Crouch Action
and simply guessed at the arbitrary 15% figure he touts as the percentage by which Continental’s
attorney’s fees should be reduced to account for “possible inefficiencies” and matters unrelated
to Jewell Aircraft’s acts and omissions.
Defendant’s Daubert objection is not compelling in its present form on the present
factual record. As an initial matter, Daubert in no way precludes an expert’s testimony from
being reliable where it is based upon personal knowledge or experience. See, e.g., United States
v. Jennings, 599 F.3d 1241, 1248 (11th Cir. 2010) (“A district court may decide that nonscientific expert testimony is reliable based upon personal knowledge or experience.”) (citation
omitted); Maiz v. Virani, 253 F.3d 641, 669 (11th Cir. 2001) (“there is no question that an expert
may still properly base his testimony on professional study or personal experience”) (citation and
internal quotation marks omitted). The experiential nature of Binion’s expertise does not render
his opinions per se unreliable, equate to lack of methodology, or warrant automatic exclusion of
his testimony. Moreover, defendant lacks many details as to what Binion did or did not do, or
how exactly he utilized his expertise in reaching opinions such as his reduction of the total
attorney’s fees by a certain percentage to account for inefficiencies. Defendant does not possess
those facts because it elected to file a Motion to Strike within days after receiving Binion’s
expert report, rather than first exploring those factual underpinnings by taking Binion’s

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deposition. Whatever perceived strategic advantages such a preemptive attack might have had, it
bore the obvious disadvantage of sending Jewell Aircraft into Daubert objections without having
developed the requisite factual predicate to challenge the sufficiency of Binion’s knowledge of
the underlying case or his procedure and reasoning for fixing the 15% figure.
The Court cannot discern at this time whether the challenged opinions by Binion satisfy
Daubert reliability principles or not because the record has not been adequately developed. For
example, “if the witness is relying solely or primarily on experience, then the witness must
explain 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.” United States v.
Augustin, 661 F.3d 1105, 1125 (11th Cir. 2011). The record is undeveloped on this point. By
plunging into a full-blown Daubert Motion without first taking Binion’s deposition, Jewell
Aircraft deprived itself of the opportunity to explore the factual basis for his opinions (i.e., the
specific matters he has reviewed in the Crouch Action), the nexus between Binion’s expertise
and the opinions he renders, and the particulars of the methodology by which he has reached
those various opinions. The report does not set forth these matters in painstaking detail, nor do
applicable rules require otherwise. Accordingly, that aspect of Jewell Aircraft’s Motion to Strike
is denied, without prejudice to its ability to renew Daubert reliability objections if warranted
after development of a proper factual record.12
C.

Other Issues.

Although the foregoing is sufficient to resolve the Motion to Strike in its entirety, the
Court pauses briefly to address a trio of recurring matters in the parties’ briefs. First, Jewell
Aircraft repeatedly suggests that there has been a ruling in this case forbidding use of “rough
justice” methodology in apportioning fees and costs to particular claims. The undersigned has
12

As an aside, there is an obvious pragmatic reason for resolving Jewell Aircraft’s
Daubert objections in this manner. For the reasons set forth in § II.A., supra, Binion’s expert
report is in flux. Insofar as he intends to offer opinions as to apportionment of attorney’s fees
between claims subject to indemnification and claims not subject to indemnification, those
opinions must comport with the discussion of Alabama law in the July 30 Order. At present,
they do not. If Binion amends his expert report to offer apportionment opinions that are
consistent with the July 30 Order, the Court has no way of predicting at this time what his
methodology underlying any such revised opinions will be, much less forecasting whether it will
pass reliability scrutiny through the lens of Daubert.

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made no such ruling. To be sure, Magistrate Judge Cassady has issued a pair of thoughtful
opinions setting forth his belief that a rough justice framework “may not apply” here. (See doc.
48, at 5-6 n.4; doc 107, at 5-7.) Judge Cassady’s reasoning appears facially sound, but he has not
issued a definitive ruling on the topic, for the same reason that the undersigned has not. To date,
the issue has not been squarely presented for adjudication. While this Court is skeptical of any
“rough justice” method of apportioning Continental’s defense costs between covered and noncovered claims (particularly if such apportionment takes the form of an arbitrary percentage not
backed by rigorous analysis), that issue has not yet been decided, and will not be decided without
the benefit of an appropriate motion and briefing.13
Second, it is equally true that there has been no ruling in this case that would impose an
apportionment methodology requiring “line-by-line review of each and every time entry and cost
item on every invoice from the Crouch litigation.” (Doc. 85, at 20-21.) Nor is the Court
convinced that the only alternatives available to the parties for apportioning damages are the
opposite, binary extremes of either guessing on a percentage or engaging in unwieldy,
burdensome review of reams of billing records spanning a multi-year period on a line-by-line
basis. The parties are strongly encouraged to research this issue and to seek out fair, reasonable,
creative and pragmatic solutions for the “untangling” of attorney’s fees between compensable
and non-compensable claims in the Crouch Action. It would be surprising, indeed, if no court or
commentator has ever devised a viable solution to the disentanglement dilemma that promotes
the rule of law and preserves the plaintiff’s burden of proof while also accounting for the
equitable, practical premise that proving damages should not be an exercise in the unduly
burdensome, the prohibitively expensive or the impossible. Given the quality and quantity of
attorney resources at hand on both sides, the Court is optimistic that a reasonable solution
grounded in law and practicality can be forged. That said, should the parties cling to absolutist

13

The parties’ briefs on the Motion to Strike spar over whether Binion’s analysis
constituted a “rough justice” methodology or not. To be clear, any opinion or evidence fixing a
percentage or amount of attorney’s fees incurred in defense of the negligent installation claim
based on broad approximation, without underlying specific analysis of how the attorney time was
actually spent and which tasks related to which claims, would fall within the “rough justice”
category.

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positions on this issue, without offering reasonable alternatives, the undersigned will select one
or the other.
Third, the parties’ briefs include arguments about whether indemnification is available
prior to any “demand” for indemnity by Continental and whether attorney’s fees are recoverable
for the appeal of the Crouch Action. Those issues and others were resolved in the summary
judgment Order (doc. 109) entered on October 1, 2013, and will not be revisited here.
III.

Conclusion.
For all of the foregoing reasons, the Motion to Strike Expert Report of Mack B. Binion

and Motion to Prohibit Mr. Binion from Testifying as a Witness (doc. 79) is granted in part,
and denied in part. Movant having identified no colorable basis for disqualifying Binion from
testifying at trial in toto (and, indeed, having failed to challenge certain of his proffered opinions
at all), the Motion to Prohibit Mr. Binion from Testifying as a Witness is denied. With respect
to the Motion to Strike, the Motion is granted in part and Binion’s expert report is stricken to
the extent that it conflicts with the July 30 Order. More precisely, the portions of that expert
report in which Binion utilizes a “combined and concurring” rationale, opines that “every dollar
spent in defense of the case resulted from or arose out of Plaintiffs’ allegations as to the activities
of Jewell,” and concludes that defense costs are reimbursable as long as they “resulted from
Jewell’s actions and omissions during the overhaul” (whether they relate to defense of the
negligent installation claim or not) are stricken because they do not account for applicable statelaw limitations on Jewell Aircraft’s contractual indemnity obligations, as set forth in the July 30
Order. In all other respects, the Motion to Strike is denied.
None of the foregoing forecloses Binion from submitting an amended expert report that
corrects the deficiencies identified herein and properly takes into account the July 30 Order. To
the extent that Continental wishes to do so, it is hereby granted leave to file an amended report
within a schedule to be fixed by the Magistrate Judge in connection with the forthcoming
supplemental Rule 16(b) Scheduling Order.
Finally, insofar as Jewell Aircraft may renew its motion to strike or exclude Binion’s
testimony in the future, such a motion will be summarily denied absent an affirmative showing
that the grounds for relief specified therein were unavailable at the time of its original motion
challenging Binion’s report. Allowing a party to take multiple, serial shots at the other side’s

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expert using previously available arguments would compound the parties’ extraordinarily
burdensome pretrial motion practice, at a tremendous cost to both judicial and litigant resources.
DONE and ORDERED this 4th day of October, 2013.
s/ WILLIAM H. STEELE
CHIEF UNITED STATES DISTRICT JUDGE

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