Holzhauer v. Rhoades

Filing 171

ORDER RE: MOTIONS IN LIMINE by Judge Jon S. Tigar denying 116 Motion in Limine; denying 117 Motion in Limine. (wsn, COURT STAFF) (Filed on 6/17/2015)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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MARY HOLZHAUER,

Case No. 13-cv-02862-JST

Plaintiff,
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v.

ORDER RE: MOTIONS IN LIMINE

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United States District Court
Northern District of California

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GOLDEN GATE BRIDGE HIGHWAY &
TRANSPORTATION DISTRICT,

Re: ECF Nos. 114, 116

Defendant.
The Court heard argument concerning the parties’ motions in limine on June 5, 2015.
Motion at ECF No. 114: Regarding Dr. Barry Ben-Zion
By this motion, Defendant Golden Gate Bridge, Highway & Transportation District (“the

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District”) seeks to exclude the testimony of Plaintiff David Rhoades’ economic damages expert

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Dr. Barry Ben-Zion pursuant to Federal Rule of Evidence 702.

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Rule 702 provides that:

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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.

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The District argues that Dr. Ben-Zion’s report should be excluded because it lacks a

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sufficient factual foundation under Rule 702(b) and fails to apply reliable principles and methods

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under Rule 702(c). “[T]he admission of expert testimony generally lies within the sound

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discretion of the trial court.” Burlington N., Inc. v. Boxberger, 529 F.2d 284, 287 (9th Cir. 1975).

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Although courts should screen expert testimony that is premised upon “rampant speculation,” id.,

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“it is not proper for the Court to exclude expert testimony merely because the factual bases for an

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expert’s opinion are weak.” Andler v. Clear Channel Broad., Inc., 670 F.3d 717, 729 (6th Cir.

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2012) (quoting Boyar v. Korean Air Lines Co., 954 F. Supp. 4, 7 (D.D.C. 1996)).

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In support of its motion to exclude Dr. Ben-Zion’s report, the District points to the Third
Circuit’s decision in Benjamin v. Peter's Farm Condo. Owners Ass’n, 820 F.2d 640 (3d Cir. 1987).

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There, the Third Circuit granted a new trial where a testifying economic expert had calculated the

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plaintiff’s lost earnings “figure [] based solely on [plaintiff’s] personal belief as to how much

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money he could earn together with his personal records reflecting money received and disbursed

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during the three month period after the injury.” Id. at 643. Although the plaintiff told the expert

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that he “felt he was going to work part-time” and make approximately $10,000 a year in his post-

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injury, part-time employment capacity, he had shown the expert records that did not support this

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Northern District of California

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estimate. Id. at 641. The Benjamin court stated that “[a]lthough mathematical exactness is not

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required, testimony of post-injury earning capacity must be based upon the proper factual

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foundation.” Id. The court concluded that “reliance on [plaintiff’s] personal belief as to his

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capabilities was improper because [plaintiff’s] belief was merely speculative” and “the figure

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derived from that reliance was thus without proper foundation and insufficient for a jury properly

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to assess [plaintiff’s] damages.” Id.

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The District argues that Dr. Ben-Zion’s testimony should be excluded because his lost

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earnings calculations are not based on sufficient facts or data, but instead defer to “Rhoades’ self-

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serving representation to Dr. Ben-Zion that he will not make a full income recovery until 2021.”

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ECF No. 114 at 5. The District contends that Dr. Ben-Zion’s assumption that Rhoades will take

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until the beginning of 2022 to return to his full earning capacity fails to account for Rhoades’

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deposition testimony, which indicates that he has already returned to full-time work. Id. The

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District also argues the report should be excluded because it does not apply reliable principles and

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methods for calculating economic loss and fails to reflect the speculative nature of the real estate

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market in which Rhoades works. Id.

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The Court disagrees with the District’s characterization of Dr. Ben-Zion’s report as lacking

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a sufficient factual foundation or failing to use reliable methods. In preparing the report, Dr. Ben-

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Zion analyzed Rhoades’ historical income, pre- and post-accident. Dr. Ben-Zion did account for
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the speculative nature of the real estate market, observing that Rhoades’ income “fluctuates greatly

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from year to year, given that there is typically a lag between invest time and effort on real estate

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properties and reaping the rewards from these investments.” ECF No. 141 at 7. Therefore, Dr.

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Ben-Zion determined Rhoades’ pre-injury earnings “based on the average income he earned over

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several years prior to his injury.” Id. Dr. Ben-Zion projected that Rhoades’ income would have

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“increased by the rate of inflation” on average. Id. at 8. Dr. Ben-Zion looked to Rhoades’

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reported post-injury income in 2013 and 2014 and projected that Rhoades “will be able to

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gradually increase his income at a compound rate to ultimately regain his earning capacity by

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1/01/2022.” Id.

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It is true that Dr. Ben-Zion relied heavily on Rhoades’ statements about the nature of his

United States District Court
Northern District of California

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business and the real estate market in determining that it would take Rhoades until 2022 to return

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to his full earning capacity. Specifically, Rhoades had informed Dr. Ben-Zion that “because he

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was absent from active participation for a period of time, [] it will take him seven or eight years to

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regain the kind of clientele he used to have before the injury.” ECF No. 114-1 at 30:20-24.

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Unlike the statements made by the plaintiff in Benjamin, which were flatly contradicted by the

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evidence shown to the expert, Rhoades’ statements are not belied by the record or so speculative at

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to justify the exclusion of Dr. Ben-Zion’s report. Moreover, Rhoades possesses knowledge

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regarding the effects of his injuries on his real estate investment portfolio and client base that Dr.

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Ben-Zion was entitled to rely on in the preparation of his report. Specifically, Rhoades stated that

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investments often take several years to pay off and that his relationships with various clients were

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disrupted during the period when he was not able to work at full capacity due to his injuries.

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Rhoades’ failure to identify specific deals that he missed out on or clients he lost during the period

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when he was injured render Dr. Ben-Zion’s report vulnerable to criticism and vigorous cross-

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examination, but do not justify a finding that Dr. Ben-Zion’s conclusions are baseless or

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speculative.

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Additionally, the District’s argument that Dr. Ben-Zion’s report is in meaningful conflict

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with Plaintiff Rhoades’ deposition testimony is not supported by the record. Although Rhoades

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stated at deposition that he was “[s]taying as busy” as he had been before the accident in 2012, he
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never stated that he had already returned to his full pre-injury earning capacity. ECF No. 114-1 at

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24. The Court also does not find it significant that Dr. Ben-Zion chose to focus on Rhoades’

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income in the eight years immediately prior to the injury, but did not “take into account any of Mr.

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Rhoades’ financial records prior to 2005.” ECF No. 114 at 5. Indeed, it stands to reason that

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Rhoades’ most recent pre-injury income would be most relevant to any projection of his future

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earnings.
Therefore, the Court will deny the District’s motion to exclude the testimony of Plaintiff

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Rhoades’ economic damages expert Dr. Ben-Zion.

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Motion at ECF No. 116: Regarding Dr. Johanna Moss
By this motion, the District moves to exclude the testimony of Plaintiff Mary Holzhauer’s

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Northern District of California

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economic expert Dr. Johanna Moss. The District argues that Dr. Moss “fails to rely on verifiable

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financial record regarding Mr. Holzhauer’s earnings” and “has made unjustified assumptions and

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relied on insufficient facts.” ECF No. 116. The District contends that Dr. Moss based her

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estimates on Holzhauer’s economic losses on answers to interrogatories and did not consult

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Holzhauer’s pay stubs or W-2 forms. Id. at 2. The District notes that Dr. Moss admitted at

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deposition that it is “not that common” to “only have answer to interrogatories” as the basis for an

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expert opinion. Id. at 3.
In response, Holzhauer argues that Dr. Moss in fact also testified that she had relied on Mr.

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Holzhauer’s 1099s and Schedule C Statements of business income in preparing her report, in

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addition to interrogatory responses. ECF No. 136 at 3. Holzhauer further contends that Dr.

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Moss’s reliance on the interrogatory responses was a reasonable and conservative projection, as

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Decedent had begun new work shortly prior to his death and was no longer working in the self-

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employed capacity reflected by the available earnings statements. Id.
The Court concludes that Dr. Moss’s report is admissible pursuant to Rule 702 as it is

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based on a sufficient factual foundation under the circumstances. Dr. Moss stated that she

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consulted Decedent’s 1099s and Schedules Cs, in addition to the interrogatory responses. The

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District can cross-examine Dr. Moss regarding her reliance on interrogatories and her discounting

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of the past earnings reflected on the 1099 and Schedule Cs.

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The Court will deny the District’s motion to exclude Dr. Moss’s testimony.

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IT IS SO ORDERED.

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Dated: June 17, 2015
______________________________________
JON S. TIGAR
United States District Judge

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United States District Court
Northern District of California

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