Apple Glen Investors, L.P. v. Express Scripts, Inc.
ORDER: Defendant Express Scripts, Inc.'s Motion to Exclude Expert Testimony of Gary Keene 39 and Motion to Exclude Expert Testimony of Brad Johnson 40 are DENIED WITHOUT PREJUDICE. See Order for details. Signed by Judge Virginia M. Hernandez Covington on 6/15/2015. (KAK)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
APPLE GLEN INVESTORS, L.P.,
Case No. 8:14-cv-1527-T-33EAJ
EXPRESS SCRIPTS, INC.,
This cause comes before the Court pursuant to Defendant
Express Scripts, Inc.’s (“ESI”) Motion to Exclude Expert Testimony
of Gary Keene (Doc. # 39) and Motion to Exclude Expert Testimony
of Brad Johnson (Doc. # 40), both filed on April 6, 2015. Plaintiff
Apple Glen Investors, L.P. (“Apple Glen”) filed responses thereto
(Doc. ## 45, 46) on May 6, 2015. ESI filed replies to Plaintiff
Apple Glen’s responses (Doc. ## 48, 49) thereafter on May 20, 2015.
For the reasons that follow, the Court denies the Motions without
Pursuant to an agreement (“the Lease”) dated December 6, 1999,
Apple Glen leased commercial property and equipment to ESI. (Doc.
# 2 at 2). Both parties at bar are successors in interest to the
original parties of the Lease, which terminated on March 31, 2014.
(Id.) ESI took assignment of the Lease in November of 2001. (Doc.
# 42 at 2).
On June 25, 2014, Apple Glen filed a complaint alleging that
ESI breached the Lease by failing to maintain the entire leased
premises, including leased equipment, in “first class condition
unforeseen,” pursuant to Section 12 of the Lease. (Doc. # 2 at ¶
9). Apple Glen seeks damages in excess of $5.3 million dollars in
repair and replacement costs, together with loss of rental income,
diminution in marketability, and attorneys’ fees. (Doc. # 42 at
17; Doc. # 2 at 4).
Keene, to offer expert testimony at trial. Keene’s Expert Report
(Doc. # 42-1), deposition transcript (Doc. # 39-1), and affidavit
(Doc. # 47-1), are before the Court. Apple Glen has also retained
Brad Johnson, a managing director at a franchise appraisal firm,
to provide expert testimony. Johnson’s Expert Report (Doc. # 401) and deposition transcript (Doc. # 40-2) are before the Court.
ESI moves to exclude the testimony of both proffered experts. (Doc.
## 39, 40). The Court will consider each motion in turn.
II. Legal Standard
The admissibility of expert testimony is governed by Federal
Rule of Evidence 702, which states that:
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.
Rule 702 is a codification of the Court’s landmark case of
Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993).
In Daubert, the Court described the gatekeeping function of the
district court to “ensure that any and all scientific testimony or
evidence is not only relevant, but reliable.” Id. at 589. As stated
in the Advisory Committee Notes accompanying Rule 702 of the
Federal Rules of Evidence, “[a] review of the case law after
Daubert shows that the rejection of expert testimony is the
exception rather than the rule.” See Advisory Committee Notes to
the 2000 Amendment to Rule 702. In addition, the trial judge is
afforded broad discretion in deciding Daubert issues. See Kumho
Tire Co. v. Carmichael, 526 U.S. 137, 152 (1999).
When a matter is set for a bench trial, as in the present
case, however, the Eleventh Circuit has commented that “[t]here is
less need for the gatekeeper to keep the gate when the gatekeeper
is keeping the gate only for himself.”
415 F.3d 1257, 1269 (11th Cir. 2005).
United States v. Brown,
The court has also remarked
that judges serving as factfinders in the context of a bench trial
are less likely than jurors to be “awestruck by the expert=s
mystique.” Id. (citing Allison v. McGhan Med. Corp., 184 F.3d 1300,
1310 (11th Cir. 1999)).
Nevertheless, in an abundance of caution, the Court will
evaluate the proffered expert testimony against the touchstones of
Daubert and Rule 702. In Rink v. Cheminova, Inc., 400 F.3d 1286
(11th Cir. 2005), the Eleventh Circuit set forth a three-pronged
approach to qualifying expert witnesses:
To fulfill their obligation under Daubert, district courts
must engage in a rigorous inquiry to determine whether: (1)
the expert is qualified to testify competently regarding the
matters he intends to address; (2) the methodology by which
the expert reaches his conclusions is sufficiently reliable
as determined by the sort of inquiry mandated in Daubert; and
(3) the testimony assists the trier of fact, through the
expertise, to understand the evidence or to determine a fact
Id. at 1291-1292 (internal citations omitted). The party offering
an expert has the burden of satisfying each of these elements by
a preponderance of the evidence. Id. at 1292; see also Allison,
184 F.3d at 1306.
A. Gary Keene
Apple Glen employed Keene, the principal of Keene Kilmas
conditions of the leased premises and equipment.
In the expert
determines to be deficient and provides an “Opinion of Probable
Cost” to refurbish or replace the items in order to restore the
property to a “first class condition and order or repair,” pursuant
to the Lease. (Doc. # 42-1 at 4). Apple Glen seeks to use the
testimony of Keene, speaking on behalf of KKCG, to allege deficient
conditions for twenty-five items. ESI moves to exclude Keene’s
testimony under Daubert and Rule 702.
According to Apple Glen, the qualifications and expertise of
Keene, having over forty years of experience as a Certified General
Contract and Construction Consultant, are “beyond reproach.” (Doc.
# 45 at 1). ESI does not challenge Keene’s qualifications, but
instead challenges Keene’s methodology, contending that it is
flawed and, thus, will not assist the trier of fact. (Doc. # 39 at
Keene’s Expert Report (Doc. # 42-1) describes his methodology
as placing “an emphasis on determining if certain components could
be refurbished or needed to be replaced so that the useful life of
any given component would extend a minimum of 10 years; correlating
to the term of the existing lease.” (Id. at 16). When asked during
his deposition about this methodology, Keene stated, “we looked at
equipment and components that would need to last a minimum of ten
years to be in accordance with the lease.” (Keene Dep. Doc. # 391 at 141). From this explanation, ESI contends that Keene based
his report on a “10 year useful life criteria,” which is not
included in the Lease. (Doc. # 39 at 2). According to ESI, rather
than being required to replace equipment that would need to last
ten years, the Lease only provides that the tenant shall replace
equipment that has “become worn out or unusable for the purpose
which it is intended.” (Id.). ESI alleges that “Keene’s entire
analysis is based on a nonexistent contract term,” and, thus, his
methodology is flawed. (Id.).
The Court is not convinced that the Expert Report, taken
together with Keene’s deposition, reveals a flawed methodology.
The Expert Report alleges deficiencies that purportedly required
action at the time of inspection, rather than compelling action
within ten years. Keene’s affidavit, filed in conjunction with
replacement was only suggested for items already beyond their
useful life, regardless of whether their useful life would expire
in the next ten years. (Doc # 47-1 at ¶ 15).
Even assuming arguendo that Keene’s methodology was based on
a “10 year useful life criteria,” there is less need for the Court
to exercise its gatekeeping function as to expert testimony for a
bench trial. See Brown, 415 F.3d at 1269. Given that this is a
nuanced issue of interpretation, ESI can establish alleged flaws
in Keene’s methodology adequately through cross-examination. The
Court therefore finds no basis for striking Keene’s testimony prior
to trial pursuant to ESI’s Daubert and Rule 702 challenge. However,
ESI may again move for exclusion of Keene’s testimony if it can
establish during the bench trial that Keene employed a flawed
testimony, ESI suggests in its reply brief that Keene’s affidavit,
which was submitted in connection with Apple Glen’s response to
ESI’s Motion for Summary Judgment, was untimely submitted and is
a “sham” affidavit.
ESI argues that the affidavit is inadmissible
supplemental disclosure deadline, which was March 30, 2015. (Doc.
# 48 at 3-4). Although Keene’s affidavit was filed on May 6, 2015,
tendered by an expert who was known to ESI and whose expert report
was filed timely. The Court does not find that Keene’s affidavit
would surprise ESI such that it would give Apple Glen an unfair
ESI also insinuates that Keene’s affidavit should be excluded
as a sham, citing Kernel Records Oy v. Mosley, 694 F.3d 1294, 1303
n.6 (11th Cir. 2012), for the proposition that a “district court
may disregard an affidavit as a sham when a party to the suit files
deposition testimony on a material fact.” (Doc. # 48 at 4).
However, that case also states that the “sham affidavit rule should
be applied sparingly.” Id. (citing Latimer v. Roaring Toyz, Inc.,
601 F.3d 1224, 1237 (11th Cir. 2010)). In order to strike an
testimony.” Mortg. Payment Prot., Inc. v. Cynosure Fin., Inc., No.
6:08-cv-1212, 2011 WL 2670081, at *4 (M.D. Fla. July 8, 2011)
(quoting Tippens v. Celotex Corp., 805 F.2d 949, 954 (11th Cir.
This is not such a case where the sham affidavit rule should
be applied, as Keene’s affidavit acts to clarify his expert report,
rather than to contradict it. The Court finds that the affidavit
does not modify the prior expert report and deposition to the
extent that it creates an inherent inconsistency.
accordingly declines to employ the draconian sanction of striking
B. Brad Johnson
Retained by Apple Glen, Brad Johnson states in his Expert
Report that the purpose of his retention is to:
a. Discuss the differences between a net lease and an absolute
net lease and the significance of those differences,
including related trends in the commercial real estate
b. To review the subject Lease
c. Inspect the subject Leased Premises
d. Confer with construction consultants and the Maintenance
telecommunications infrastructure buildings
f. To offer guidance on the expectations and obligations of
the parties to an absolute net lease
(Doc. # 40-1 at 1).
Daubert and Rule 702 arguing that Johnson’s testimony will not aid
the trier of fact. Johnson’s qualifications are uncontested. ESI’s
contention that the testimony will not aid the trier of fact is
premised on the claim that Johnson’s role is actually to interpret
the unambiguous Lease, which is a question of law for the Court.
(Doc. # 40 at 2). ESI cites Johnson’s deposition in which he states
he was “essentially” asked to determine whether the tenant had
complied with the lease. (See Id. at 1-2). Apple Glen counters
that it plans to utilize Johnson’s expertise to compare and
contrast the Lease at bar to other types of commercial leases,
underscores that “it shall not call Johnson as a witness at trial
to offer legal opinions.” (Id.).
While ESI is correct in stating that an expert may not “merely
tell the jury what result to reach,” (Doc. # 40 at 2 (citing
Montgomery v. Aetna Cas. Sur. Co., 898 F.2d 1537, 1541 (11th Cir.
1990)), the danger involved with such expert testimony, namely
that the jury will be unduly influenced, is not implicated in a
bench trial. See Brown, 415 F.3d at 1269. The Court is confident
that it can discern testimony that seeks to make legal conclusions
from testimony that “provides the Court with background, context
experts.” (Doc. # 46 at 2). Given that Johnson is not a lawyer,
there is even less risk that any potential legal analysis will
influence the Court. Testimony that offers legal conclusions will
be afforded no weight. As such, the Court denies ESI’s Motion to
Exclude Johnson’s testimony.
However, ESI may, if appropriate,
re-articulate its challenge during the course of the trial.
Accordingly, it is
ORDERED, ADJUDGED, and DECREED:
Defendant Express Scripts, Inc.’s Motion to Exclude Expert
Testimony of Gary Keene (Doc. # 39) and Motion to Exclude Expert
Testimony of Brad Johnson (Doc. # 40) are DENIED WITHOUT PREJUDICE.
DONE and ORDERED in Chambers, in Tampa, Florida, this
15th day of June, 2015.
All Counsel of Record
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