Christiansen et al v. Syverson et al
ORDER granting 17 Motion to Exclude; and denying 18 Motion in Limine. Signed by Judge Donald W. Molloy. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (dle)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO
JACK CHRISTIANSEN and MARIE
THANE SYVERSON, REBEKAH
SYVERSON, and DOES 1-10,
This case is a dispute over a real property disclosure statement. In 2010,
Plaintiffs Jack and Marie Christiansen (the “Christiansens”) purchased a property
at 323 Barley Drive in Lenore, Idaho (the “Property”). The Property is
approximately twenty (20) acres with a refurbished farmhouse. In September
2017, the Christiansens were doing repairs on the Property and discovered
vermiculite in the attic, which later tested positive for asbestos. Further
investigation uncovered asbestos-contaminated construction remnants from a
previous house remodel, performed by Defendants Thane and Rebekah Syverson
(the “Syversons”). When the Syversons had sold the property to Capital
Relocation Services, LLC, they had completed a disclosure statement averring
there was no asbestos or other hazardous substance on or in proximity to the
Property. (See Doc. 1 at 28–31.)
On August 28, 2019, the Christiansens filed the present action in the District
Court for the Second Judicial District of the State of Idaho in and for the County of
Clearwater. The Syversons removed the case on September 23, 2019. (Doc. 1.)
The Complaint alleges claims of fraud and also seeks attorney fees and costs.
(Doc. 1 at 8–18.) The case is set for jury trial on January 11, 2021. (Doc. 14.)
There are two pending motions. The Christiansens seek to exclude or limit the
testimony of the Syversons’ retained liability expert, Michael N. Cooper. (Doc.
17.) Conversely, the Syversons seek to exclude or limit the testimony of the
Christiansens’ retained damage expert, Terry R. Rudd. (Doc. 18.) They are
addressed in turn.
Parties are required to make their expert disclosures at the time and in the
manner ordered by the Court. Goodman v. Staples The Office Superstore, LLC,
644 F.3d 817, 827 (9th Cir. 2011). If a party fails to properly disclose this
information, the party cannot use the non-disclosed information at trial “unless the
failure was substantially justified or is harmless.” Fed. R. Civ. P. 37(c)(1); Yeti by
Molly, Ltd. v. Deckers Outdoor Corp., 259 F.3d 1101, 1106 (9th Cir. 2001). The
parties were reminded of this potential sanction in the Scheduling Order, which
states: “An inadequate report or disclosure may result in exclusion of the expert’s
opinions at trial even though the expert has been deposed.” (Doc. 14 at ¶ 11(c).)
Here, the parties’ liability expert disclosure deadline was July 15, 2020.
(Doc. 14 at ¶ 1.) The parties, nonetheless, stipulated to the extension of that
deadline to July 22, 2020. (See Doc. 17-1 at 7.) On July 22, the Syversons
disclosed Michael N. Cooper of Industrial Hygiene Resources as a liability expert.
(See id. at 16–29.) That document identifies Cooper’s experience, work history,
and ten opinions he is anticipated to offer at trial. (Id.) Attached to that disclosure
are his CV, (id. at 17-1 at 22–28), and his compensation agreement, (id. at 29).
What that disclosure does not contain, however, is a separate expert report
prepared and signed by Cooper. The document reveals no reasoning or opinions
other than topic areas to be disclosed at some future date. Thus, the Christiansens
argue that the July 22, 2020 expert disclosure is insufficient under Rule
26(a)(2)(B). Their argument is well taken.
Rule 26(a)(2) provides for disclosures by two types of expert: those retained
or specifically employed to give expert testimony in a case, Fed. R. Civ. P.
26(a)(2)(B), and those who are not retained or specially employed, but who
nonetheless may provide expert testimony, Fed. R. Civ. P. 26(a)(2)(C). An expert
who falls into the first category is required to provide an expert report. Fed. R.
Civ. P. 26(a)(2)(B). More specifically:
(B) Witnesses Who Must Provide a Written Report. Unless otherwise
stipulated or ordered by the court, this disclosure must be accompanied
by a written report--prepared and signed by the witness--if the witness
is one retained or specially employed to provide expert testimony in the
case or one whose duties as the party’s employee regularly involve
giving expert testimony. The report must contain:
(i) a complete statement of all opinions the witness will express and the
basis and reasons for them;
(ii) the facts or data considered by the witness in forming them;
(iii) any exhibits that will be used to summarize or support them;
(iv) the witness’s qualifications, including a list of all publications
authored in the previous 10 years;
(v) a list of all other cases in which, during the previous 4 years, the
witness testified as an expert at trial or by deposition; and
(vi) a statement of the compensation to be paid for the study and
testimony in the case.
Here, there is no dispute that Cooper did not submit a separate report. The
Syversons argue that is not a fatal fact, however, because Cooper signed the July
22 disclosure. They therefore argue that the Christiansen’s challenge is one of
form over substance. They are wrong. While Cooper signed the July 22
disclosure, that signature line indicates that the disclosure was merely “approved
by” him. (See Doc. 17-1 at 20.) Rule 26(a)(2)(B) requires that the expert
“prepare” the report. Moreover, the rule requires that the report contain “a
complete statement of all opinions the witness will express and the basis and
reasons for them.” While the July 22 disclosure outlines 10 topic areas, it does not
provide a basis for those opinions. The closest it comes is to generally state the
types of documents Cooper reviewed. But even the Syversons recognized that was
insufficient as the July 22 disclosure states: “Mr. Cooper needs to complete a site
inspection in order to fully analyze and prepare his opinions and the Defendants
have made a request for a site inspection for this purpose. After the site inspection
is completed, Mr. Cooper will prepare a written report outlining his opinions and
the basis therefor.” (Doc. 17-1 at 19 (emphasis added).) Thus, the “report” as
disclosed does not meet the requirements of Rule 26(a)(2)(B).
The next question then is whether the necessary information could be added
under Rule 26(e), which imposes a duty to supplement disclosures “in a timely
manner if the party learns that in some material respect the disclosure or response
is incomplete or incorrect.” In the limited disclosure provided, the Syversons and
Cooper stated that they “reserve the right to change, alter, amend, and/or expand
his expert opinions that he will offer at the time of trial as discovery is still ongoing
and the site inspection ha[d] not yet been completed.” (Doc. 17-1 at 19.) They are
wrong once again. “[A] Rule 26(e) supplement may only be filed to correct
inaccuracies or fill in the interstices of an incomplete report based on information
that was not available at the time of the initial disclosure.” Guinnane v. Dobbins,
2020 WL 4696809, at *4 (D. Mont. Aug. 13, 2020) (internal quotation marks
omitted). “Put differently, a party cannot use untimely supplementation under
Rule 26(e) to provide information, reasoning, or opinions that Rule 26 requires be
disclosed in the critical initial disclosure.” Id. (internal quotation marks omitted).
The July 22 report states that Cooper could not complete his expert opinions
until after a site visit. It does not, however, explain why a site visit was not
possible in the preceding seven months or why one could not occur by the July 22
deadline. The email exchange provided by counsel for the Christiansens indicates
they were even willing to go beyond that deadline, (see Doc. 17-1 at 10–14), and
that a site visit finally did occur on August 20, 2020, (see Doc. 20-1 at ¶ 4). But no
report has been disclosed even after that visit. (Id. at ¶ 5.) And, even if Cooper
were to author a report now, that report would not be supplementation under Rule
26(e) because the information contained therein could have, and should have, been
in the initial report.
Because Cooper’s expert disclosure is insufficient under Rule 26, it must be
excluded because the Syversons have not shown that their failure to comply with
the rules was either substantially justified or harmless. Fed. R. Civ. P. 37(c)(1).
The Syversons’ only response has been to maintain the sufficiency of their present
disclosure. Because that argument fails for the reasons discussed above, Cooper’s
expert testimony is excluded in its entirety.
Admissibility of expert opinion is governed by Federal Rule of Evidence
702, which 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
(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;
(d) the expert has reliably applied the principles and methods to the
facts of the case.
In its gatekeeping role, the district court must determine that the proffered opinions
are both relevant and reliable. Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579,
595 (1993). Expert opinions are relevant if they “logically advance a material
aspect of the party’s case.” Estate of Barabin v. AstenJohnson, Inc., 740 F.3d 457,
463 (9th Cir. 2014) (en banc) (internal quotation marks omitted). Expert opinions
are reliable if they are the product of sound methods and principles. Id. The focus
is on the expert’s process, not the correctness of his or her conclusions. Daubert,
509 U.S. at 595.
District courts have broad discretion in determining how to assess an
expert’s reliability. Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 152
(1999). While the inquiry must be specific to the facts of each case, id., the
Supreme Court has identified four factors to consider: (1) whether the theory or
technique has been tested, (2) whether the theory or technique has been subject to
peer review and publication, (3) the potential error rate, and (4) whether the theory
or technique is generally accepted within the relevant scientific community,
Daubert, 509 U.S. at 593–94. The list is non-exhaustive and may not be applicable
in all cases. Id. at 594. Signs of a faulty methodology include the failure to rule
out other causes, forming opinions before examining the data, and conclusions that
differ from those of other professionals who followed the same process. Clarr v.
Burlington N. R.R. Co., 29 F.3d 499, 502 (9th Cir. 1994); Lust v. Merrell Dow
Pharm., Inc., 89 F.3d 594, 598 (9th Cir. 1996).
Here, the Syversons seek to exclude the testimony of Terry R. Rudd on the
grounds that his report does not provide a basis for the figures included in his “cost
to cure” valuation of the Property. (Doc. 18.) The Syversons also note that Rudd’s
valuation includes costs for surveying, excavation, abatement efforts, and attorney
fees, areas in which they argue he is not qualified to opine. (Id. at 3.) But these
challenges are not fundamental flaws subject to the exercise of the Court’s
gatekeeping authority. The Syversons have not presented any evidence that the
process underlying Rudd’s “cost-to-cure” analysis is unreliable; rather, they raise
questions of weight and credibility best addressed through cross-examination.
On November 29, 2019, Rudd prepared a 35-page Appraisal Report for the
Property. (Doc. 18-1 at 10–46.) That appraisal was timely disclosed on July 22,
2020. (Id. at 8.) As a result, any challenge to its sufficiency should have been
raised by August 5, 2020. (Doc. 14 at ¶ 11(c).) The Syversons’ motion, filed
September 24, 2020, is therefore untimely and their objection waived. (Id.)
On the merits, in his report Rudd explains why he chose a “cost-to-cure”
valuation and the amounts he used in his calculations. (See Doc. 18-1 at 11–13.)
He further provides a detailed list of “comps” for similar properties, (id. at 14–15),
and numerous photos and maps of the Property itself, (see, e.g., id. at 18). He also
includes a list of “Assumptions and Limiting Conditions” for his opinions, which
includes disclaimers related to engineering activities and legal matters. (Id. at 41.)
Finally, Rudd’s CV shows over fifty years of appraisal experience. (Id. at 42–46.)
Rudd is therefore qualified to opine on those matters identified in his report and his
report discloses the factual basis to the extent required by Rule 26(a)(2)(B). The
Syversons may, of course, question Rudd on his valuations and he will be limited
to the information disclosed in answering those inquiries.
Based on the foregoing, IT IS ORDERED that the Christiansens’ motion
(Doc. 17) is GRANTED.
IT IS FURTHER ORDERED that the Syversons’ motion (Doc. 18) is
DATED this ___ day of October, 2020.
Donald W. Molloy, District Judge
United States District Court
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