AMCO Insurance Company v. TAF, Inc.
Filing
44
ORDER granting 18 Motion for Partial Summary Judgment; granting 20 Motion Exclude Testimony of William Creeden, P.E.; denying 21 Motion Exclude Testimony of Mark M. Ruddy; denying 22 Motion in Limine; finding as moot 23 Motion in Li mine; finding as moot 24 Motion in Limine; denying 31 Motion for Oral Argument. The Clerk is directed to enter judgment in the amount of $886,792.83 in favor of Plaintiff AMCO and against Defendant TAF. This case shall proceed to trial on the remaining disputed damages. Signed by Chief Judge J. Randal Hall on 9/26/2018. (pts)
IN THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF GEORGIA
STATEBORO DIVISION
AMCO
INSURANCE COMPANY,
A/S/0
MCCORKLE WHOLESALE, INC.,
Plaintiff,
*
CV 617-022
*
V.
TAF, INC. d/b/a METTER SPORTS
STORE,
Defendant.
ORDER
Before the Court are the following motions: (1) Plaintiff's
motion for partial summary judgment (Doc. 18); (2) Plaintiff's
motion to exclude testimony of defense expert William Creeden,
P.E. (Doc. 20); (3) Plaintiff's motion to exclude testimony of
defense expert Mark M. Ruddy (Doc. 21); (4) Defendant's motion to
exclude testimony of plaintiff expert Michael R. Austin (Doc. 22);
(5) Defendant's motion to exclude testimony of plaintiff expert
Jeffrey C.
Smith
(Doc.
23); (6)
Defendant's
motion to exclude
testimony of plaintiff expert Bryan K. Cash (Doc. 24); and (7)
Defendant's motion for oral argument on each of the aforementioned
motions (Doc. 31).
I. BACKGROUND
The facts of this case are almost entirely undisputed.
2015,
McCorkle
property
Wholesale, Inc.
(the
Statement
^'Property")
of
Undisputed
(^^McCorkle")
located
in
Material
owned a
Metter,
Facts,
commercial
Georgia.
Doc.
In
18-1,
(Pl.'s
^ 1.)
Plaintiff, AMCO Insurance Company C'AMCO"), insured the Property.
(Def.'s Statement of Undisputed Material Facts, Doc. 29-1, II 1.)
Defendant TAF, Inc. d/b/a Metter Sports Store ("TAF") was a tenant
occupying space in the Property.
(Compl., Doc. 1, at 2; Ans.,
Doc. 8, at 2.)
As part of its business, TAF buys and sells hunting supplies,
including firearms.
(Dep. of Turner Fordham, Doc. 18-4, at 33.)
Turner Fordham (''Fordham") is the sole owner, president, and CEO
of TAF.
(Id. at 16-17.)
On the evening of November 12, 2015, in
TAF's store, Fordham made preparations to reblue a Browning A-5
Sweet Sixteen shotgun that TAF had recently purchased.^
37-41.)
As part of the rebluing process, Fordham used a torch to
heat the shotgun which was resting on a gun cleaning mat.
39, 41.)
(Id. at
(Id. at
A fire ignited shortly after Fordham began the bluing
process causing damage to the
(Id. at 44-45.)
Property structure and contents.
Fordham admits that he started and is the sole
cause of the fire.
(Id. at 67.)
^ "Bluing" is effectively a finish applied to gun metal to improve
(Fordham Dep. at 37, 40.)
the aesthetics and durability of a firearm.
As a
result of the fire, AMCO reimbursed McCorkle in the
amount of $1,047,815.11.
9, 12; Doc. 18-3.)
(Dep. of Michael Austin, Doc. 22-5, at
On February 1, 2017, AMCO, as subrogee for
McCorkle, filed suit against TAF seeking payment of the full amount
it paid McCorkle.
(See generally Compl.)
judgment on this claim.
In
AMCO now seeks summary
response, TAF argues, among other
things, that McCorkle was negligent per se for its alleged failure
to install the proper number of fire extinguishers in accordance
with regulations and that negligence contributed to the damages
that the fire ultimately caused.
(Def.'s Opp'n to Pl.'s Mot. for
Partial Summ. J., Doc. 29, at 2-5.)
Specifically, TAF argues that
AMCO is not entitled to any reimbursement, or, in the alternative,
only
a
reimbursement
McCorkle's
negligence.
adjusted
for
Additionally,
damage
TAF
attributable
asserts
that
to
AMCO's
payment to McCorkle did not properly deduct (1) depreciation to
certain structural elements of the Property and (2) the value of
goods salvaged from the Property following the fire.^
^ TAF requests oral argument on all motions presently before the
Court.
Upon consideration of the issues presented and the parties'
submissions, the Court finds that oral argument would not materially aid
the Court in resolving the pending motions.
II. MOTION FOR SUMMZ^Y JUDOIENT
A. Standard of Review
Summary judgment is appropriate only if ""there is no genuine
dispute as to any material fact and the movant is entitled to
judgment as a matter of law."
Fed. R. Civ. P. 56(a).
Facts are
""material" if they could affect the outcome of the suit under the
governing
substantive
law,
and
a
dispute is
genuine ""if the
evidence is such that a reasonable jury could return a verdict for
the non-moving party."
242, 248 (1986).
Anderson v. Liberty Lobby, Inc., 477 U.S.
The Court must view factual disputes in the light
most favorable to the non-moving party, Matsushita Elec. Indus.
Co. V. Zenith Radio Corp., 475 U.S. 574, 587 (1986), and must draw
""all justifiable inferences in [the non-moving party's] favor."
United States v. Four Parcels of Real Prop., 941 F.2d 1428, 1437
(11th Cir. 1991) (en banc) (internal punctuation and citations
omitted).
The Court should not weigh the evidence or determine
credibility.
Anderson, 477 U.S. at 255.
The moving party has the initial burden of showing the Court,
by reference to materials on file, the basis for the motion.
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
Because the
standard for summary judgment mirrors that of a directed verdict,
the initial burden of proof required by either party depends on
who carries the burden of proof at trial.
Id. at 323.
""When the
moving party has the burden of proof at trial, that party must
show affirmatively the absence of a genuine issue of material fact:
it
^must support its motion with credible evidence that would
entitle it to a directed verdict if not controverted at trial.'"
Four
Parcels of Real Prop.,
941 F.2d at 1438
(quoting Celotex
Corp., 477 U.S. at 331 (Brennan, J., dissenting)).
''If the moving
party makes such an affirmative showing, it is entitled to summary
judgment unless the nonmoving party, in response, 'comes forward
with significant, probative evidence demonstrating the existence
of a triable issue of fact.'" Id. (quoting Chanel, Inc. v. Italian
Activewear of Fla., Inc., 931 F.2d 1472, 1477 (11th Cir. 1991)).
When the movant does not carry the burden of proof at trial,
it may satisfy its initial burden in one of two ways - by negating
an essential element of the non-movant's case or by showing that
there is no evidence to prove a fact necessary to the non-movant's
case.
See Clark v. Coats & Clark, Inc., 929 F.2d 604, 606-08 (11th
Cir. 1991) (citing Adickes v. S.H. Kress & Co., 398 U.S. 144 (1970)
and Celotex Corp., 477 U.S. 317).
The movant cannot meet its
initial burden by merely declaring that the non-moving party cannot
meet its burden at trial.
Id.
If - and only if - the movant carries its initial burden, the
non-movant must "demonstrate that there is indeed a material issue
of fact that precludes summary judgment."
Id.
When the non-
movant bears the burden of proof at trial, the non-movant must
tailor its response to the method by which the movant carried its
initial burden.
For example, if the movant presented evidence
affirmatively
negating
a
material fact, the
non-movant
^^must
respond with evidence sufficient to withstand a directed verdict
motion
at
trial
on
the
material
fact
sought
to
be
negated."
Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1116 (llth Cir. 1993),
On the other hand, if the movant shows an absence of evidence on
a material fact, the non-movant must either show that the record
contains evidence that was "overlooked or ignored" by the movant
or "come forward with additional evidence sufficient to withstand
a directed verdict motion at trial based on the alleged evidentiary
deficiency." Id. at 1117.
The non-movant cannot carry its burden
by relying on the pleadings or by repeating conclusory allegations
contained in the complaint.
1033—34 (llth Cir. 1981).
See Morris v. Ross, 663 F.2d 1032,
Rather, the non-movant must respond
with affidavits or as otherwise provided by Federal Rule of Civil
Procedure 56.
In this action, the Clerk of Court gave Defendant notice of
the motion for summary judgment and informed it of the summary
judgment rules, the right to file affidavits or other materials in
opposition,
and
the
consequences
of
default.
(Doc.
19.)
Therefore, the notice requirements of Griffith v. Wainwriqht, 772
F.2d 822, 825 (llth Cir. 1985) (per curiam), are satisfied.
The
time for filing materials in opposition has expired, and the motion
is now ripe for consideration.
B. Discussion
AMCO's motion for partial summary judgment sets forth three
arguments: (1) AMCO is entitled to summary judgment on the issue
of liability for the fire; (2) AMCO is entitled to summary judgment
as to TAF's
summary
counters
affirmative
judgment
that
on
(1)
defenses; and
$886,792.83
there
is
an
of
(3) AMCO is
undisputed
issue
of
fact
entitled to
damages.
as
to
TAF
whether
McCorkle's negligence contributed to the spread and consequent
damages of the fire; and (2) because there is an issue of fact
related to the spread and consequent damages of the fire, the Court
should not grant summary judgment on any issues.
1. TAF's Liability
Although neither party explicitly stated the elements for
negligence in Brief, the elements are well-established in Georgia:
(1) [a] legal duty to conform to a standard of conduct
raised by the law for the protection of others against
unreasonable
risks
of
harm;
(2)
a
breach
of
this
standard; (3) a legally attributable causal connection
between the conduct and the resulting injury; and (4)
some loss or damage flowing to the plaintiff's legally
protected interest as a result of the alleged breach of
the legal duty.
Smith V. United States, 873 F.3d 1348, 1351—52 (11th Cir. 2017)
(quoting Bradley Ctr., Inc. v. Wessner, 296 S.E.2d 693, 695 (Ga.
1982)).
The parties do not dispute that TAF had a legal duty to
avoid setting fire to the Property, that TAF breached its duty, or
that some loss or damage occurred as a result of the alleged
breach.
Therefore, the only disputed issue for the purpose of
AMCO's motion for partial summary judgment is causation.
^^To
prove
causation,
the
plaintiff
must
show
that
the
wrongdoing is both a cause in fact and a proximate cause of the
injuries [alleged]." Strength v. Lovett, 714 S.E.2d 723, 727 (Ga.
Ct. App. 2011).
To show that the defendant's conduct is a cause
in fact or actual cause of its claimed injuries, ''a plaintiff
ordinarily must prove that, but for this conduct, he would not
have
sustained
the
injury."
Id.
at 730
(quoting
English
v.
Crenshaw Supply Co., 387 S.E.2d 628, 634 (Ga. Ct. App. 1989)).
Alternatively stated, "The defendant's conduct is not a cause of
the event, if the event would have occurred without it."
Id.
For
the wrongdoing to be the proximate cause of the alleged injury,
the injury must be the natural and probable consequence
of the [wrongful conduct], such a consequence as under
the surrounding circumstances of the case might and
ought to have been foreseen by the wrong-doer as likely
to flow from his act.
The injury must be the direct
result of the misconduct charged; but it will not be
considered too remote if, according to the usual
experience of mankind, the result ought to have been
apprehended.
Id. at 727 (citing Ga. Dep't of Human Res, v. Bulbalia, 684 S.E.2d
115, 118 (Ga. Ct. App. 2010)).
The Court finds that there is no dispute of material fact as
to causation.
First, Fordham stated in his deposition, "I caused
the fire." (Fordham Dep. at 67.)
Second, but for Fordham starting
the fire, the Property and its contents would not have sustained
fire damage.
Third, the damage done to the building was the
^'natural and probable consequence" of starting a fire in a building
and ought to have been foreseen by Fordham.
Fourth, the damage
caused was the direct result of the fire started by Fordham.
Thus,
the wrongful act of starting a fire was the actual and proximate
cause of the fire which damaged the Property.
Accordingly, the
Court finds, as a matter of law, that TAF is liable for the damages
caused by the fire.^
2. TAF's Affirmative Defenses
''[A]n
^fault'
or
affirmative
cut
off
defense
proximate
or immunity does
cause,
it
only
not eliminate
bars
liability
notwithstanding that the ^fault' of the tortfeasor was a proximate
cause of the injury in question."
Zaldiver, 774 S.E.2d at 699.
"Comparative negligence is a defense that diminishes or bars the
liability of the defendant notwithstanding that [its] conduct was
^ TAF challenges causation by arguing that although Fordham's
"actions may have led to the fire, that fire was able to spread unabated
because of McCorkle's failure to have fire extinguishers in the retail
space of the building, as required by Georgia law."
Mot. for Partial Summ. J., at 2.)
(Def.'s Opp'n to
TAF's argument, however, improperly
conflates proximate cause and its affirmative defenses alleging
comparative negligence. See Zaldiver v. Prickett, 774 S.E.2d 688, 698
(Ga. 2015) ("Comparative negligence of the plaintiff, on the one hand,
and the causal relationship between the wrongdoing of the defendant and
the injury sustained by the plaintiff, on the other, are distinct
questions. Comparative negligence is a defense that diminishes or bars
the liability of the defendant notwithstanding that her conduct was a
proximate cause of the injury to the plaintiff; the defense does not
necessarily eliminate the causal connection."). Accordingly, the Court
considers TAF's argument as part of its affirmative defenses.
a proximate cause of the injury to the plaintiff."
Id.
The
doctrine of comparative negligence states:
[W]here the negligence of the plaintiff joins with the
negligence of the defendant in proximately causing the
plaintiff's injuries, the plaintiff will be precluded
from recovering against the defendant,
of the plaintiff is equal or greater
defendant, or, if the negligence of
less than that of the defendant,
recovery of damages will be reduced in
if the negligence
than that of the
the plaintiff is
the plaintiff's
proportion to its
negligence.
Weston V. Dun Transp., 695 S.E.2d 279, 282 {Ga. Ct. App. 2010)
(emphasis in original).
When a defendant raises an affirmative
defense, "the burden rests upon the defendant[] to establish the
truth
of
such
evidence."
affirmative
defense
by
a
preponderance
of
the
Brown v. Tucker, 788 S.E.2d 810, 821 (Ga. Ct. App.
2016).
TAF "concedes that its
actions led to the subject fire."
(Def.'s Opp'n to Mot. for Partial Summ. J., at 1). TAF's argument,
however,
is
that
McCorkle's
failure
to
supply
portable
fire
extinguishers as required by the applicable fire code constitutes
negligence per se, and McCorkle's negligence contributed to the
damages in whole or in part by precluding Fordham's opportunity to
extinguish the fire.
(Id. at 2—6.)
TAF relies upon its expert,
Ronald Blankenship, to establish that the Property lacked the
sufficient number and type of fire extinguishers.
(Id. at 5—6.)
Using this conclusion, TAF asserts that "there is no dispute that
the premises lacked fire extinguishers in the vicinity, of the fire
10
(or the retail space in its entirety}."
original).)
with
(Id. at 4 (emphasis in
Finally, TAF argues that ^^had McCorkle been compliant
its
duty
[Fordham]
was
to
maintain
ready,
proper
willing,
fire
and
extinguisher to control the fire."
suppression
able
(Id.)
to
equipment,
utilize
a
fire
Thus, TAF concludes
that the "lack of fire extinguishers and the consequent spread of
the fire (distinguishable from its cause/origin) is a legitimate
basis for finding comparative fault."
(Id. at 6.)
AMCO contends that TAF "cannot point to any evidence in this
case
that
affirmative
would
allow
defenses
of
it
to
survive
comparative
Partial Summ. J., Doc, 18, at 8.)
summary
fault."
judgment
(Pl.'s
on
its
Mot.
for
Specifically, AMCO argues that
TAF cannot establish that the lack of fire extinguishers was a
cause of the damages incurred.
(Id. at 9-10.)
The Court agrees
with AMCCs position.
Assuming TAF established McCorkle was negligent per se,^ it
has
not
established
McCorkle's
alleged
negligence
proximately
AMCO additionally argues that McCorkle did not have a legal duty
to provide or maintain fire extinguishers in TAF's retail space, an
essential element of negligence per se.
See Hubbard v. Dep^t of Transp.,
568 S.E.2d 559, 567 (Ga. Ct. App. 2002) ("The violation of certain
mandatory regulations may also amount to negligence per se if the
regulations impose a legal duty.").
Although TAF points to several
applicable codes requiring fire extinguishers, it fails to show whether
the code imposed a legal duty on McCorkle. See id. at 567 ("Accordingly,
even if we assume that [plaintiff] was within the class of persons
protected by the [regulation] and that her injury was the type of harm
the standards were intended to prevent, [plaintiffs] would not be
entitled to partial summary judgment because they were unable to
demonstrate that the [regulation] provisions were mandatory or that they
created a legal duty on the part of [defendants.]").
11
Additionally, TAF
contributed
to
the
liability per se."
harm.
"Negligence
per
se
does
not equal
Norman v. Jones Lang Lasalle Americas, Inc.,
627 S.E.2d 382, 389 (Ga. Ct. App. 2006).
the court finds
negligence per se, the plaintiffs must then demonstrate a causal
connection between the negligence per se and the injury."
Id.
The necessary causal connection includes establishing proximate
cause.
Id.
TAF
has
provided
no
evidence
that
the
lack
of
fire
extinguishers was causally connected to McCorkle's damages.
To
support its argument, TAF relies exclusively on an affidavit of
Fordham
and
Blankenship.^
the
report
and
deposition
of
its
expert
Ronald
The affidavit by Fordham states that he was "ready,
willing, and able" to use a fire extinguisher "had one been readily
available."
(Aff.
of
Turner
Fordham,
Doc.
29-3,
5 5.)
The
affidavit, however, says nothing about whether Fordham believed he
could have contained the fire had he used a fire extinguisher.
(See generally Fordham Aff.)®
fails to identify whether it (the lessee) or McCorkle (the lessor) was
the party responsible for complying with the cited codes. The Court,
however, need not rule on this issue as TAF has provided no evidence
that even if McCorkle did possess such a legal duty, its negligence
contributed to the fire damage in this case.
® TAF also references its Amended Responses to Plaintiff s First
Interrogatories. (Doc. 18-5.) The Amended Responses, however, contain
the same statement as Fordham's Affidavit that he was "ready, willing
and able to use [fire prevention equipment] to remediate or contain the
(Id. at 11-12.)
fire if such equipment was reasonably available."
®
AMCO asserts
that Fordham's affidavit is a
sham affidavit and
asks the Court to ignore it. In the Eleventh Circuit, "[wjhen a party
has given clear answers to unambiguous questions which negate the
existence of any genuine issue of material fact, that party cannot
12
thereafter
create
such
an
issue
with
an
affidavit
that
merely
contradicts, without explanation, previously given clear testimony."
Van T. Junkins & Assocs., Inc. v. U.S. Indus., Inc., 736 F.2d 656, 657
(11th Cir. 1984).
In his deposition, Fordham gave the following
testimony:
Q. Okay.
So the mat flash stops.
You threw the can of
acetone. Then you have fire on the wall. You dropped the
torch.
What happened next?
A. Threw the gloves off. Ran back and forth a few times trying
to figure out what to do. Did not know. Panicking. Ran
to the front of the store.
Ran to the bathroom.
Just not
knowing what to do.
I ran to the front again, then ran
back to the store thinking what should I grab. What should
I do. Just a state of panic.
Q. Okay.
All right.
And what ultimately did you decide to
do?
A. I ran outside the front door.
Q. Okay.
Did you make any attempt to extinguish the fire with
anything before you left?
A. No, I did not.
Q. Didn't have anything available to you?
A. I did in the back room but never - never even crossed my
mind. You know, water was the closest thing. I had - at
that time the fire was so big, I didn't know what to do.
Q. Okay.
You didn't think you'd be able to control it?
A. Not at that point I did not.
(Fordham Dep. at 53-54.)
In his affidavit, Fordham asserted:
While I was never asked at deposition, I was ready, willing,
and able to utilize a fire extinguisher at the time of the
fire had one been readily available. The only possible fire
extinguishers in the building were not in the retail space
and would have required me to pass by/through the fire. I am
fully aware as to how to use a fire extinguisher.
(Fordham Aff.
5-6.)
The question of whether to ignore Fordham's
affidavit is a close one.
The Court, however, declines to reach this
13
Moreover, TAF offers no expert witness testimony on the size
of the fire or the potential effectiveness of a fire extinguisher
given the size of the fire.
Blankenship confirmed that the scope
of his report was ^'merely to determine what types of portable fire
extinguishers should have been" in the building.
Blankenship, Doc. 29-2, at 94.)
evidence
that
the
fire
could
(Dep. of Ronald
Blankenship's Report provides no
have
been
suppressed
by
a
fire
extinguisher, much less that it could have been suppressed by the
fire
extinguisher
Blankenship
Expert
required
Report
by
the
applicable
(''Blankenship
Report"),
code.
Doc.
(See
18-7.)
Notably, when asked in his deposition whether he believed Fordham
could have put out the fire with a fire extinguisher of the type
required by the ordinance, Blankenship testified that "[w]e don't
know if he could just put it out or not."
(Blankenship Dep. at
57.)
Finally, even if McCorkle had installed fire extinguishers as
suggested by the National Fire Code, it is mere guesswork to
conclude that Fordham could have accessed the fire extinguisher.
TAF offers no evidence that the fire extinguisher would have been
placed in an area that Fordham could have accessed, and Fordham
admits that a fire extinguisher was available in the retail space
issue because Fordham's affidavit still fails to establish a genuine
issue of material fact as to causation.
14
but not accessible due to the location of the fire.
(Fordham Dep.
at 54; Blankenship Report at 6.)
In conclusion, no evidence in the record creates a genuine
issue
of
material
controlled
or
fact
regarding
extinguished
contention
that
neutralized
some
additional
of the
the
whether
rapidly
fire
Fordham
growing
extinguishers
damage is speculation.
could
have
fire.
would
While
Any
have
it is
conceivable that had Fordham obtained a fire extinguisher as the
fire swiftly spread and had some impact on the fire, ^'[a] mere
possibility of such causation is not enough; and when the matter
remains one of pure speculation or conjecture, . . . it becomes
the duty of the court to grant summary judgment."
Feazell v.
Gregg, 607 S.E.2d 253, 257 (Ga. Ct. App. 2004); accord Cordoba v.
Dillard^s Inc., 419 F.3d 1169, 1181 {11th Cir. 2005) (speculation
or conjecture does not create a genuine issue of material fact).
Accordingly,
appropriate.^
the
Court
concludes
that
summary
judgment
is
See Anderson, 477 U.S. at 250 (^^If the evidence is
^ This case presents facts similar to Dart Indus., Inc. v. Acer,
355 F. App'x 295 (11th Cir. 2009) (per curiam).
In that case. Dart
owned a building that the defendant was leasing.
The defendant
counterclaimed against the plaintiff for its failure to maintain a
properly functioning fire suppression system.
Although applying
Tennessee law, the Eleventh Circuit Court of Appeals concluded that even
assuming that the plaintiff retained a duty to maintain the fire
suppression system in the building as its owner, and even assuming that
duty was breached, the counterclaim failed because of ''insufficient
evidence that an operational fire suppression system would have reduced
[counterclaim-plaintiff]'s losses."
Id. at 296.
Therefore, absent
evidence establishing that the presence of additional fire extinguishers
would have curtailed McCorkle's damages, TAF's affirmative defenses
alleging comparative negligence fail as a matter of law.
15
merely colorable, or is
not significantly probative, summary
judgment may be granted.").
3. Damages
In its motion for partial summary judgment, AMCO also asks
the Court to declare that $886,792.83 in damages is not in dispute.
In support of this assertion, AMCO argues that once the Court
concludes
that
TAF
is
liable
for
the
fire
and
rejects
its
affirmative defenses, as a matter of law, the only dispute that
remains is conflicting expert testimony regarding damages for
depreciation and salvage in the amount of $161,022.28.
(Pl.'s
Mot. for Partial Summ. J., at 10-12).
In response, TAF concedes that ^^Plaintiff alleges damages of
$1,047,815.11"
and
''defense
experts
reduce
this
amount
to
$886,792.83." (Def.'s Opp'n to Mot. for Partial Summ. J., at 7.)
TAF further argues that the remaining $886,792.83 in damages is
only
in
dispute
liability." (Id.)
based
upon
"Plaintiff s
apportionment
of
However, as discussed supra, AMCO is entitled
to judgment on its negligence claim and against TAF's affirmative
defenses as a matter of law.
As such, summary judgment is proper
with regards to TAF's liability in the amount of $886,792.83 in
undisputed damages.
III. MOTIONS TO EXCLUDE
Both AMCO and TAF have filed numerous motions to exclude
testimony of the other side's expert witnesses.
16
AMCO seeks to
exclude TAF's experts William Creeden, P.E. (Doc. 20) and Mark M.
Ruddy (Doc. 21).
TAF seeks to exclude AMCO's experts Michael R.
Austin (Doc. 22), Jeffrey C. Smith (Doc. 23), and Bryan M. Cash
(Doc. 24).
Federal Rule of Evidence 702 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.
''As the Supreme Court recognized in Daubert v. Merrell Dow Pharms.,
Inc., [509 U.S. 579 (1993)], Rule 702 plainly contemplates that
the district court will serve as a gatekeeper to the admission of
[expert] testimony."
Quiet Tech. DC-8, Inc. v. Hurel-Dubois UK
Ltd., 326 F.3d 1333, 1340 (11th Cir. 2003). "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).
The Eleventh Circuit has explained that district courts are
to engage in a three-part inquiry to determine the admissibility
17
of expert testimony under Rule 702. Quiet Tech., 326 F.3d at 1340.
Specifically, the court must consider whether:
(1) [t]he 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 application of
scientific, technical, or specialized expertise, to
understand the evidence or to determine a fact in issue.
Id. at 1340—41.
First, an expert may be qualified to testify due to his
knowledge, skill, experience, training, or education. Trilink Saw
Chain, LLC v. Blount, Inc., 583 F. Supp. 2d 1293, 1304 (N.D. Ga.
2008). ''A witness's qualifications must correspond to the subject
matter of his proffered testimony."
Anderson v. Columbia Cty.,
No. CV 112-031, 2014 WL 8103792, at *7 (S.D. Ga. Mar. 31, 2014)
(citing Jones v. Lincoln Elec. Co., 188 F.3d 809, 723 (7th Cir.
1999)).
However, an expert's training need not be narrowly
tailored to match the exact point of dispute.
McDowell v. Brown,
392 F.3d 1283, 1297 (11th Cir. 2004).
Second, the testifying expert's opinions must be reliable.
In Daubert, the Supreme Court directed district courts faced with
the
proffer
of
expert
testimony
to
conduct ''a
preliminary
assessment of whether the reasoning or methodology underlying the
testimony is scientifically valid and of whether that reasoning or
methodology properly can be applied to the facts in issue."
U.S.
at
592-93.
There
are
four
18
factors
that
courts
509
should
consider: (1) whether the theory or technique can be tested, (2)
whether it has been subject to peer review, (3) whether the
technique has a known or potential rate of error, and (4) whether
the
theory
community.
has
attained
general
Id. at 593-94.
acceptance
in
the
relevant
''These factors are illustrative, not
exhaustive; not all of them will apply in every case, and in some
cases other factors will be equally important in evaluating the
reliability
of
proffered
expert
opinion."
United
Frazier, 387 F.3d 1244, 1262 (11th Cir. 2004).
States
v.
Thus, "the trial
judge must have considerable leeway in deciding in a particular
case
how
to
go
about
testimony is reliable."
determining
whether
particular
expert
Kuhmo Tire Co. v. Carmichael, 526 U.S.
137, 152 (1999).
Regardless of the specific factors considered, "[p]roposed
testimony must be supported by appropriate validation - i.e., 'good
grounds,' based on what is known." Daubert, 509 U.S. at 590.
In
most cases, "[t]he expert's testimony must be grounded in an
accepted body of learning or experience in the expert's field, and
the expert must explain how the conclusion is so grounded."
R.
Evid.
702,
advisory
committee's
notes
to
2000
Fed.
amendment.
"Presenting a summary of a proffered expert's testimony in the
form of conclusory statements devoid of factual or analytical
support is simply not enough" to carry the proponent's burden.
Cook ex rel. Estate of Tessier v. Sheriff of Monroe Cty., 402 F.3d
1092,
1113
(11th
Cir.
2005).
19
Thus,
neither
an
expert's
qualifications and experience alone nor his unexplained assurance
that his or her opinions rely on accepted principles is sufficient.
McClain v. Metabolife Int^l, Inc., 401 F.3d 1233, 1244 (11th Cir.
2005); Frazier, 387 F.3d at 1261.
Moreover, when analyzing a
witness's reliability, courts must be careful to focus on the
expert's principles and methodology rather than the scientific
conclusions that they generate.
Daubert, 509 U.S. at 595.
Third, expert testimony must assist the trier of fact to
decide a fact in issue.
Thus, the testimony must concern matters
beyond the understanding of the average lay person and logically
advance a material aspect of the proponent's case.
Frazier, 387 F.3d at 1262.
Id. at 591;
The Supreme Court has described this
test as one of "fit." Daubert, 509 U.S. at 591. "Preferred expert
testimony generally will not help the trier of fact when it offers
nothing more than what lawyers for the parties can argue in closing
arguments."
Frazier, 387 F.3d at 1262—63.
A. William Creeden, P.E.
William Creeden, P.E. offered testimony on behalf of TAF
challenging specific amounts that AMCO paid to McCorkle.
Creeden
opined that AMCO should not have allowed approximately $7,094.00
for soda blasting the concrete floors of the Property, and AMCO
improperly failed to apply depreciation to certain components of
the Property resulting in an overpayment of $17,984.00.
(Creeden
Expert Report, Doc. 20-1, at 2, 5-6.) In total, Creeden estimates
20
that the unnecessary soda blasting and AMCO's failure to properly
account for all depreciation resulted in an overpayment to McCorkle
of approximately $25,078.00. (Id. at 2.) AMCO's motion to exclude
challenges Creeden's qualification to render an opinion regarding
depreciation, and, even if he is qualified, that he did not employ
the proper methodology.^
Creeden is a structural engineer who was designated as an
^^engineering expert specializing in construction management and
engineering services."
20-3, at 2.)
(Creeden Expert Witness Disclosure, Doc.
Creeden uses his expertise to evaluate the scope of
the required repairs to the structural aspect of buildings;
''determining which portion of the building is still usable and
which portion is not."
33-34.)
(Dep. of William Creeden, Doc. 20-2, at
After determining the scope of the repairs, Creeden
provides information to a colleague familiar with the software
used to estimate the damages the insurer owes.
(Id. at 34.)
The
software utilized at Creeden's firm to create the estimate is
called Xactimate, an insurance standard software package.
(Id.)
As part of the total estimate, the software can develop an estimate
regarding depreciation.
(Id. at 60.)
® AMCO does not contest whether Creeden is qualified to render an
expert opinion regarding the unnecessary use of soda blasting to clean
the Property floors. (Pl.'s Mot. to Exclude Test, of Defense Expert
William Creeden, P.E., Doc. 20, at 3 n.5.)
21
The Court agrees that Creeden is not qualified to render an
opinion regarding depreciation.
Estimating depreciation is an
entirely different area of expertise than determining the damages
suffered by the structural components of a building.
Determining
structural damages requires knowledge concerning the physical
properties of building components and the effect of various
physical stressors on those components.
Depreciation involves
accounting concepts and depends on the terms of the insurance
contract.
Although experienced in the former, Creeden recognized
he lacks knowledge and experience as to the latter:
Q: Well, and you shouldn't be considering [insurance
policy terms between AMCO and McCorkle] because that
has nothing to do with engineering; correct?
A: We're specifically discussing his estimate.
not supposed to discuss his estimate?
Are we
I mean, he
created this estimate based on the policy language
between him and their insured correct?
Q: You tell me.
You're the expert.
A: Well, I'm sure he did.
So all I'm saying is that - is that it - the way an
estimate is customarily put together is what I'm
commenting about. And the point I was making was that
if he specifically excluded depreciation from these
major components for some reason that I don't know,
then that's fine.
You know, I don't know what the
policy says or doesn't say.
But to not apply depreciation to things that are
halfway through their life doesn't make any sense. It
shouldn't make sense to anybody.
Q: Well, again, the agreement between Nationwide and its
policyholder as reflected in its policy has nothing
to do with engineering; correct?
22
A: It has nothing to do with engineering. As far as I
know, it has nothing to do with engineering, no, but
it has everything to do with the estimate that we're
specifically discussing right now.
Q: And we agreed that depreciation is not an engineering
concept, it's an accounting concept; correct?
A: For the most part, yes.
(Creeden Dep. at 75-77.) AMCO's expert witness, insurance adjuster
Michael Austin, explained why AMCO could not consider certain
depreciations:
Q: Well, what about Mr. Creeden (phonetic) that we
talked about a minute ago. Have you had a chance to
review Mr. Creeden's report, the defendant's expert?
A: Yes, 1 did.
Q: Okay.
And do you have any comments or criticisms
of what Mr. Creeden is saying there in his report with
respect to the actual cash value of construction?
A: Well, referring back to depreciation again.
We
are not allowed to take depreciation on hard-andstructural items that are expected to last the
lifetime of the building, and this is where he's
calling into my consistency. But according to Best
Claims Practices, we are not allowed to take
depreciation on such items that he claims need to be
depreciated.
(Austin Dep. at 24.)
Additionally,
Creeden
is
not
trained
to
use
Xactimate
software; he relied on an employee in his firm who is qualified to
use the software to develop the estimates (Creeden Dep. at 34),
and he admits that he lacks knowledge regarding how Xactimate
functions or how it calculates depreciation:
Q: But to calculate depreciation, it's got to have some
kind of algorithm in it that applies a mathematical
23
equation to the current prices to get the ACV price;
correct?
A: I don't know how it does it exactly.
Q: So as far as you know, you just put in what the
current repair cost is and Xactimate will spit out a
depreciated amount; is that correct?
A: I don't use the software, so exactly how that's done
and the inputs and outputs, I'm not sure.
But I know that when I talk to an estimator and we're
talking about depreciation, he asks me what it is and
how old it is.
Q: You don't know what kind of algorithm the Xactimate
program uses to calculate depreciation, do you?
A: I have no idea, no.
Q: You don't know if it uses straight-line depreciation
or not; correct?
A: I don't know.
Q: You don't know if it uses the declining balance method
of depreciation; correct?
A: I have no idea how Xactimate is programmed, no.
Q: Okay.
You don't know if it uses the sum of years
method to calculate depreciation; correct?
A: No, sir.
(Creeden Dep. at 78—80.)
In
sum,
the
Court
concludes
that
Creeden's
engineering
expertise differs from the expertise required to formulate a
depreciation estimate.
is
qualified
to
Because TAF has not demonstrated Creeden
offer
expert
24
testimony
on
the
issue
of
depreciation,
the
Court
excludes
the
portions
of
Creeden's
testimony opining upon AMCCs depreciation calculations.
B. Mark M. Ruddy
TAF designated expert Mark Ruddy to testify regarding the
amount AMCCs salvor realized in the sale of McCorkle's inventory.
In Ruddy's opinion, AMCCs salvor, for a number of reasons, failed
to maximize the sale of the salvaged inventory.
recovered $97,355.00 in proceeds.
AMCCs salvor
Ruddy opines that the salvaged
inventory should have demanded $265,279.20, and, after paying the
salvor's commission, the salvaged inventory would have returned
net proceeds of $233,299.28.
{Mark M. Ruddy Expert Report (^^Ruddy
Report"), Doc. 21-1, at 3.)
AMCO contends that Ruddy should be disqualified as an expert
for a number of reasons.
First, AMCO contends that Ruddy is
unqualified to deliver an expert opinion because he is a broker of
salvaged goods and is not in the business of actually buying or
selling salvaged goods.
The Court disagrees, and Ruddy is
qualified to offer expert testimony regarding the value of the
salvaged inventory.
Ruddy has over forty years of experience in the salvage
industry.
(Dep. of Mark M. Ruddy, Doc. 21-2, at 4-5.)
tenure as a salvor.
consulted
on such
Ruddy has
matters
on
a
25
During his
valued salvaged goods and
number of occasions.
has
(Id. at
14-21.)
For these reasons. Ruddy is qualified to offer his opinion
as to the value received for McCorkle's salvaged inventory.
Second, AMCO argues that Ruddy has not employed a proper
methodology for assessing the value of the salvage.
AMCO relies
on the fact that Ruddy received a bid for the salvaged goods and
is now relaying those figures as his opinion.
The Court determines
Ruddy's opinion encompasses much more than merely restating the
bids he solicited.
Ruddy testified that the offers he received
for the salvage goods were the product of bona fide negotiations.
(Id. at 62-63, 68-69, 71, 80.)
Moreover, Ruddy's opinion is not
just limited to the actual price recovered.
He explains that, in
his experience with this type of inventory, AMCO's salvor packaged
the inventory incorrectly and sold it to the wrong type of buyer.
(Id. at 60, 73-74.)
From all accounts. Ruddy contacted buyers he
believed were better suited to purchase the inventory in question
and negotiated a price with them as he would in the salvage sales
he ordinarily brokers.^
(Id. at 80.)
Therefore, the Court is
convinced that Ruddy employed a reliable methodology for the
salvage industry, and his expert testimony on the value of the
salvage is properly admitted.
® AMCO does not dispute that Ruddy's testimony would assist the
trier of fact.
26
C. Michael R. Austin
TAF seeks to exclude testimony of AMCO's proffered expert,
Michael R. Austin.
Austin is AMCO's employee that adjusted the
claim at issue in this case.
TAF contends that Austin should be
excluded as an expert under each of three prongs as recited in
Quiet Tech., supra.
The Court will address each in turn.
Initially, TAF argues that Austin is not qualified with any
specialized or industry expertise to offer an opinion as to the
fair or reasonable amounts paid in this case.
TAF supports its
conclusion with an assertion that Austin relied solely on the
experience of others in reaching his conclusion.
disagrees.
The Court
Austin's experience adjusting insurance claims dates
back nearly thirty years. (Austin Dep. at 7.) Over the course of
his career, Austin has adjusted over 10,000 claims.
(Decl. of
Michael R. Austin, Doc. 33-3, SI 8.)
The fact that Austin used information from other sources does
not disqualify him as an expert.
See Erebia v Allstate Prop. &
Cas. Ins. Co., No. 1:15-CV-312-MHC, 2016 WL 4435089, at *7 (N.D.
Ga. July IS, 2016) (citing Vision I Homeowners Ass'n v. Aspen
Specialty Ins. Co., 674 F. Supp. 2d 1321, 1325 (S.D. Fla. 2009)).
Further, despite TAF's argument that relying on the information of
others disqualifies him from opining as to depreciation, an
''expert's
experience
as
an
insurance
adjuster
ma[kes]
him
qualified to testify on depreciation." Flinch v. Owners Ins. Co.,
No. CV 616-169, 2017 WL 6045449, at *5 (S.D. Ga. Dec. 6, 2017)
27
{citing Grand Reserve of Columbus, LLC v. Property-Owners Ins.
Co., No. 4:15-CV-53 (CDL), 2017 WL 2618952, at *9 (M.D. Ga. Jan.
9, 2017)).
Xactimate.
Further, Austin possesses a Level II Certification in
(Austin Decl. SI 9.)
For these reasons, Austin is
qualified to testify regarding his estimate for the Property
damage.
Next, TAF argues that Austin's methodology does not meet the
requirements of Federal Rule of Evidence 702 and effectively
repeats its argument that Austin incorporated data from others.
Again, the Court disagrees with TAF. Austin generated the Property
loss estimate using the Xactimate software and his employer's Best
Claims Practices.
(Austin Decl. SI 9; Austin
Dep. at 24—25.)
Austin used the software and methodology traditionally employed by
insurance adjusters in formulating his estimate, and therefore,
his methodology is sufficient.
Finally, TAF repeats its argument in support of its position
that Austin's opinion will not assist the trier of fact because
the opinion is not his own.
The average lay person is generally
unfamiliar with methods and procedures of insurance adjusters used
to create an estimate.
trier
of fact in
its
Thus, Austin's testimony will assist the
determination
McCorkle was fair and reasonable.
whether AMCC s
payment to
As AMCO has met its foundational
burden, the motion to exclude Austin's testimony is denied.
28
D. Jeffrey C. Smifh, CPA
AiyiCO proffers the testimony of Jeffrey Smith on the subjects
of business interruption loss and inventory loss.
TAF moves to
exclude this testimony, although it does not dispute any issues
involving inventory loss other than salvage.
Jeffrey Smith
specifically testified that his inventory loss does not consider
salvage.
(Dep. of Jeffrey C. Smith, Doc. 23-6, at 26-27.)
As the
only remaining factual dispute involves salvage recovery. Smith's
testimony is no longer relevant, and TAF's motion to exclude his
testimony is now moot.
E. Bryan K. Cash
The final disputed expert is AMCO's expert on the origin and
cause of the fire.
Specifically, Cash's report concludes that the
fire originated at the workbench where Fordham began bluing the
shotgun and spread when Fordham threw a can of acetone.
(Bryan K.
Cash Expert Report (''Cash Report"), Doc. 24-6, at 3.) There is no
dispute regarding the origin and cause of the fire. Because Cash's
testimony is unnecessary, TAF's motion to exclude his testimony is
moot.
IV. CONCLUSION
In sum, the following IS HEREBY ORDERED:
(1) Plaintiff AMCO's motion for partial summary judgment
(Doc. 18) is GRANTED.
Thus Defendant TAF is liable to AMCO in the
amount of $886,792.83;
29
(2)
AMCO's
motion
to
exclude
testimony
of defense
expert
William Creeden, P.E. (Doc. 20) is GRANTED;
(3) AMCO's motion to exclude testimony of defense expert Mark
M. Ruddy (Doc. 21) is DENIED;
(4) TAF's motion to exclude testimony of plaintiff expert
Michael R. Austin (Doc. 22) is DENIED;
(5) TAF's motion to exclude testimony of plaintiff expert
Jeffrey C. Smith, C.P.A. (Doc. 23) is DENIED AS MOOT;
(6) TAF's motion to exclude the testimony of plaintiff expert
Bryan K. Cash is DENIED AS MOOT;
(7) TAF's request for oral argument (Doc. 31) is DENIED.
The Clerk is directed to ENTER JUDGMENT in the amount of
$886,792.83 in favor of Plaintiff AMCO and against Defendant TAF.
This case shall proceed to trial on the remaining disputed damages.
ORDER
ENTERED
at
Augusta,
Georgia,
this
day
September, 2018.
J. R^DK]g^ALL, ^HIEF JUDGE
UNITED^ferATES DISTRICT COURT
SOUTHERN DISTRICT OF GEORGIA
30
of
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