Access Limousine Service, Inc. v. Service Insurance Agency, LLC et al
Filing
48
MEMORANDUM OPINION. Signed by Judge Theodore D. Chuang on 10/19/2016. (aos, Deputy Clerk)
UNITED STATES DISTRICT COURT
DISTRICT OF MARYLAND
ACCESS LIMOUSINE SERVICE, INC.,
Plaintiff,
v.
Civil Action No. TDC-15-3724
SERVICE INSURANCE AGENCY, LLC and
TIMOTHY O'BRYAN,
Defendants.
MEMORANDUM
OPINION
Plaintiff Access Limousine Service, Inc. ("Access") has filed a negligence claim against
Defendants
Service
Insurance
Agency
("SIA")
and
Timothy
O'Bryan
(collectively,
"Defendants") arising from Defendants' late notification to Access of its decision not to renew
Access's insurance policy. This matter is before the Court on Defendants' Motion for Summary
Judgment, ECF No. 21, filed on May 5, 2016 (the "First Motion for Summary Judgment"), and
Defendants'
Witnesses,
Judgment").
Motion for Summary Judgment Regarding Plaintiff's
ECF No. 41, filed on August
Lack of Necessary Expert
12, 2016 (the "Second
Motion for Summary
The issues before the Court are (1) whether Access is precluded by judicial
estoppel from bringing its negligence claim because it failed to schedule the claim in an earlier
bankruptcy proceeding; and (2) whether Defendants are entitled to judgment as a matter of law
because the Court has stricken Access's proposed damages expert. Both motions are briefed and
ripe for disposition, and no hearing is necessary to resolve them.
For the reasons set forth below, both motions are DENIED.
See D. Md. Local R. 106.5.
BACKGROUND
Access is a Maryland corporation that provides transportation services.
In order to
operate its business, Access is required to maintain a commercial automobile insurance policy.
Between 1993 and 2013, Access fulfilled this requirement by maintaining a commercial
automobile insurance policy administered by SIA, a Virginia-based insurance company.
0'Bryan, SIA's owner, served as Access's broker and in that capacity was responsible for the
renewal, adjustment, and administration of Plaintiffs insurance policy.
On May 30, 2013, Defendants provided Access with an application to renew its insurance
policy, which was set to expire on August 12, 2013. Access returned the forms on May 31,
2013.
Neither Defendant contacted Access again until August 7, 2013, when Defendants
informed Access that they were unable to renew its policy and that the policy would be expiring
in five days. Access had not expected that it would be unable to renew its insurance polic'y and
could not obtain new insurance before the August 12, 2013 expiration date. Neither Defendant
took any action to help Access extend the policy or procure a new one, and after the expiration
date passed, Access was unable to operate its business because it lacked the required insurance
coverage. Although Access secured alternative insurance coverage from another carrier within
90 days, it suffered "significant economic loss" in the meantime. Compl. ~ 14, ECF NO.2.
I.
Access's Bankruptcy
On September 13, 2013, Access filed for Chapter 11 Bankruptcy in the United States
Bankruptcy Court for the District of Maryland. See Voluntary Petition, First Mot. Summ. J. Ex.
A, ECF No. 21-3. Access's Schedule of Personal Property, filed on October 8, 2013, stated that
Access's assets included automobiles, vans, and other vehicles, some of which had, been
repossessed; approximately $13,300 in six different bank accounts; and assorted office
2
furnishings and computers.
Next to the line for "Other contingent and unliquidated claims of
every nature, including tax refunds, counterclaims of the debtor, and rights to setoff claims,"
Access indicated that it had no such claims by placing an "X" in the space labeled "NONE."
See
Schedule B - Personal Property, First Mot. Summ. J. Ex. B, ECF No. 21-4. Keyvan Shokraei,
Access's President, signed a "Declaration Concerning Debtor's Schedules" in which he stated
under penalty of perjury that the schedules were true and correct to the best of his knowledge,
information, and belief.
Access filed an amended schedule on October 28, 2013, which again
did not identify any legal claims as assets.
Access was never granted a discharge in bankruptcy.
On January 31, 2014, the United
States Trustee filed a Motion to Convert Case to Chapter 7 or, in the Alternative, to Dismiss the
Case.
In its Motion, the Trustee asserted that Access had failed to file required monthly
operating reports, make required fee payments to the Office of the United States Trustee, provide
information requested by the Trustee, and file a reorganization plan and disclosure statement.
See Motion to Convert Case to Chapter 7 or, in the Alternative, to Dismiss Case, In re Access
,
Limousine Service, Inc., No. 13-25615, at 2-5 (Bankr. D. Md. Jan. 31, 2014), Dkt. No. 93.1 The
Trustee asserted that because Access had not "taken any affirmative steps to move this case
toward confirmation," "the best interests of the estate and the creditors would be served ...
by
converting this case to Chapter 7 or dismissing it." Id at 5. Access filed an Objection denying
the Trustee's
assertions
and submitted
several of the missing monthly operating
reports.
Nevertheless, the bankruptcy court ordered the case dismissed and terminated the automatic stay
on April 8,2014.
1
The Court takes judicial notice of filings in the bankruptcy case pursuant to Federal Rule of
Evidence 201 (b)(2).
.
3
II.
Procedural History
On December 4, 2015, Access filed this suit for negligence against Defendants in the
Circuit Court of Maryland for Prince George's County, asserting that Defendants caused Access
to lose its mandatory insurance coverage by (1) failing timely to notify Access regarding the
cancellation or non-renewal of its policy and (2) failing to maintain Access's policy or secure
alternative coverage.
Access asserts that Defendants are liable for $500,000 in damages for
losses suffered during the period it was unable to operate because it was uninsured.
Defendants timely removed the matter to this Court and properly invoked diversity
jurisdiction
pursuant to 28 U.S.C.
9
1332 because Access is a citizen of Maryland and
Defendants are citizens of Virginia. In an Amended Answer filed on April 5, 2016, Defendants
asserted the defense of judicial estoppel. On May 5, 2016, Defendants filed the First Motion for
Summary Judgment.
Access filed its Opposition to the Motion on May 23, 2016. Defendants
filed a reply brief on May 25, 2016.
With the First Motion for Summary Judgment pending, the Parties proceeded
discovery.
to
On June 7, 2016, Defendants filed a Motion to Strike Plaintiffs Expert Designations.
While that motion was pending, on August 12, 2016, Defendants filed the Second Motion for
Summary Judgment.
Access filed its Opposition to the Second Motion on August 29, 2016.
After a hearing on September 14, 2016, United States Magistrate Judge Charles B. Day denied
the Motion to Strike as to Access's standard of care expert, but granted the motion as to Access's
damages expert.
DISCUSSION
In their First Motion for Summary Judgment, Defendants invoke the doctrine of ju.dicial
estoppel and argue that Access is barred from bringing this lawsuit because Access did not list
4
the negligence claim as an asset in its Chapter 11 bankruptcy Schedule of Personal Property.
Access contends that judicial estoppel is unwarranted in this case because the omission was
unintentional. In their Second Motion for Summary Judgment, Defendants assert that they are
entitled to judgment as a matter of law because Access cannot prove the existence and amount of
damages without its expert witness on damages, whose testimony has been stricken from the
case. Access maintains that a damages expert is not required to prove loss of income during the
period for which it was uninsured.
I.
Legal Standard
Under Federal Rule of Civil Procedure 56(a), the Court grants summary judgment if the
moving party demonstrates that there is no genuine issue as to any material fact, and that the
moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a); Celotex Corp. v.
Catrett, 477 U.S. 317, 322 (1986). In assessing the Motion, the Court views the facts in the light
most favorable to the nonmoving party, with all justifiable inferences drawn in its favor.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). The Court may rely only on facts
supported in the record, not simply assertions in the pleadings. Bouchat v. Baltimore Ravens
Football Club, Inc., 346 F.3d 514, 522 (4th Cir. 2003). The nonmoving party has the burden to
show a genuine dispute on a material fact. Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 586-87 (1986). A fact is "material" if it "might affect the outcome of the suit
under the governing law." Anderson, 477 U.S. at 248. A dispute of material fact is, only
"genuine" 'if sufficient evidence favoring the nonmoving party exists for the trier of fact to return
a verdict for that party. Id at 248-49.
5
II.
Judicial Estoppel
Judicial estoppel is an "equitable doctrine that exists to prevent litigants from playing
'fast and loose' with the courts-to
deter improper manipulation of the judiciary."
Folio v. City
of Clarksburg, W Va., 134 F.3d 1211, 1217 (4th Cir. 1998). "As an equitable doctrine, judicial
estoppel is invoked in the discretion of the district court and with the recognition that each
application must be decided on its own specific facts and circumstances."
King v. Herbert J
Thomas Mem 'I Hosp., 159 F.3d 192, 196 (4th Cir. 1998).
The United States Court of Appeals for the Fourth Circuit has adopted a four-part test to
determine when judicial estoppel should apply: (1) the party to be estopped must be advancing
an assertion that is inconsistent with a position taken during previous litigation; (2) the position
must be one of fact, rather than of law or legal theory; (3) the prior position must have been
,
accepted by the court in the first proceeding; and (4) the party to be estopped must have acted
intentionally, not inadvertently.
Havird Oil Co. v. Marathon Oil Co., 149 F.3d 283,292 (4th Cir.
1998). While each factor must be satisfied in order to support application of judicial estoppel,
the "determinative factor" is whether the party sought to be estopped "intentionally misled the
court to gain unfair advantage."
Lowery v. Stovall, 92 F.3d 219,224 (4th Cir. 1996). "Without
bad faith, there can be no judicial estoppel."
Zinkand v. Brown, 478 F.3d 634, 638 (4th Cir.
2007).
A.
Judicial Estoppel in Bankruptcy
Defendants' theory is that Access's failure to list the negligence claim as an asset in the
.
bankruptcy proceedings judicially estops Access from asserting the claim before this Court. The
Fourth Circuit has recognized this form of judicial estoppel.
F.3d 231,241-42
See Whitten v. Fred's, Inc., 601
(4th Cir. 2010) (declining to apply judicial estoppel because the debtor-plaintiff
6
had disclosed the claim), abrogated on other grounds by Vance v. Ball State Univ., 133 S. Ct.
2434 (2013). Other circuits have specifically applied judicial estoppel to bar a civil lawsuit
brought by a plaintiff who concealed a legal claim from creditors by failing to disclose it in a
bankruptcy petition. See, e.g., Cannon-Stokes v. Potter, 453 F.3d 446, 448-49 (7th Cir. 2006);
;
Krystal Cadillac-Oldsmobile
GMC Truck, Inc. v. Gen. Motors Corp., 337 F.3d 314,319-21 (3d
Cir. 2003); Hamilton v. State Farm Fire & Cas. Co., 270 F.3d 778, 784 (9th Cir. 2001); In re
Coastal Plains, Inc., 179 F.3d 197, 213 (5th Cir. 1999); Payless Wholesale Distribs., Inc. v.
Alberto Culver (P.R.), Inc., 989 F.2d 570, 571 (Ist Cir. 1998). But see Browning v. Levy, 283
F.3d 761, 775-76 (6th Cir. 2002) (declining to apply judicial estoppel because of a lack of
evidence of bad faith).
The rationale for applying judicial estoppel under these circumstances is that complete
and honest disclosure of all of a debtor's assets is a "critical step" in the bankruptcy process.
Oneida Motor Freight, Inc. v. United Jersey Bank, 848 F.2d 414, 417 (3d Cir. 1988). The
Bankruptcy Code requires a debtor to include along with its bankruptcy petition a schedple of
assets and liabilities. 11 U.S.C.
9 521(a)(I)
(2012). The Schedule of Personal Property used to
list a debtor's assets requires debtors to include "all personal property ... of whatever kind." See
Schedule B - Personal Property, First Mot. Summ. J. Ex. B. The property of the estate is defined
broadly to encompass "all legal or equitable interests of the debtor in property as of the
commencement of the case," see 11 U.S.C.
9 541(a)(I), including "all causes of action that could
be brought by a debtor," In re USinternetworking, Inc., 310 B.R. 274, 281 (Bankr. D. Md. 2004)
(citing Seward v. Devine, 888 F.2d 957, 963 (2d Cir. 1989)). Thus, where a debtor-plaintiff
attempts to circumvent its affirmative obligations under the Bankruptcy Code, conceal a
potential claim from the bankruptcy court and its creditors, and seek recovery solely for its own
7
benefit, judicial estoppel may be an appropriate means to ensure the integrity of the bankruptcy
process and prevent abuse of the bankruptcy court's protection.
B.
Genuine Issue of Material Fact
According
to Defendants,
the application. of judicial
estoppel
in. this case is a
straightforward matter because it is undisputed that Access failed to disclose its negligence claim
on its Schedule of Personal Property during the bankruptcy proceedings.
Indeed, the first two
elements of judicial estoppel are plainly satisfied. There is no genuine dispute that the position
taken by Access before the bankruptcy court-that
it did not possess any legal causes of action-
is inconsistent with the position it implicitly takes before this Court by pursuing a legal claim
against Defendants.
See, e.g., In re Coastal Plains,
179 F.3d at 210 (holding that the
"inconsistent positions prong for judicial estoppel" was satisfied where "[b]y omitting the claims
from its schedules and stipulation," the debtor-plaintiff "represented that none existed," yet later
pursued claims in district court). Thus, the first prong is satisfied. There is likewise no genuine
dispute that the second prong, requiring the position to be one of fact, rather than of law, is met.
The existence of Access's legal claim is "factual subject matter that was not disclosed."
In re
USinternetworking, 310 B.R. at 283.
On the third prong, courts typically find that a bankruptcy court has "accepted" a debtor's
assertion in its Schedule of Personal Property that it had no legal claims when it grants a
discharge.
See In re Superior Crewboats, Inc., 374 F.3d 330, 335 (5th Cir. 2004) (finding that
the bankruptcy
court adopted the debtor-plaintiffs'
position when it issued a discharge);
Hamilton, 270 F.3d at 784 (holding that a bankruptcy court that has discharged debts, even if
later reinstated, has necessarily accepted the debtor's assertions that it lacked potential legal
claims).
8
Here, the bankruptcy court did not discharge Access from bankruptcy; rather it dismissed
the bankruptcy petition following a motion that asserted that Access had failed to file required
monthly operating reports, make required fee payments, and provide information requested by
the Trustee.
Where it does not appear that the contents of the Schedule of Personal Property
played any role in the bankruptcy court's dismissal of Access's petition, there is a legitimate
question whether the bankruptcy court "accepted" the prior position that it had no legal claims.
See Havird Oil Co., 149 F.3d at 292. Cf Ryan Operations G.P. v. Santiam-Midwest Lumber Co.,
81 F.3d 355,363 (3d Cir. 1996) ("There is no evidence that the nondisclosure played any role in
,
the confirmation
of the plan or that disclosure of the potential claims would have led to a
different result.").
But see Hamilton, 270 F.3d at 784 (noting that a bankruptcy court "may
'accept' the debtor's assertions by relying on the debtor's nondisclosure of potential claims in
many other ways" beyond discharge of debts). Although Defendants argue that the Trustee and
the bankruptcy court might have been unwilling to dismiss the bankruptcy petition had they
known of the potential claim, nothing in the record supports this assertion, particularly where the
Trustee's motion did not address the size of the bankruptcy estate and focused solely on Access's
failure to follow required procedures.
Regardless of whether that prong has been satisfied, neither the application of judicial
estoppel nor a grant of summary judgment is appropriate at this time because a genuine issue of
material
fact remains
inadvertently."
on the fourth
prong,
whether
Havird Oil Co., 149 F.3d at 292.
Access
acted
"intentionally,
not
Defendants argue that under Calafiore v.
Werner Enterprises, Inc., 418 F. Supp. 2d 795, 798 (D. Md. 2006), a debtor's failure to disclose
a legal claim can only be inadvertent if the debtor (1) lacked knowledge of the existence of the
claim and (2) had no motive to conceal it.
Defendants argue that Access necessarily had
9
knowledge of the underlying facts for its negligence claim because it was aware of the loss' of its
commercial automobile insurance policy before it filed its Chapter 11 petition, and that motive
has been established because "disclosing the claim would have added significant sums to the
bankruptcy estate." First Mot. Summ. J. at 8, ECF No. 21.
The Fourth Circuit, however, has not adopted a per se rule that in cases involving
nondisclosure of potential legal claims in bankruptcy, "intent" for purposes of judicial estoppel is
conclusively established by evidence of knowledge and a possible motive.
not adopt such a rigid stance.
Even Calafiore did
Rather, the court referenced the defendant's reliance on a case
from the United States District Court for the Southern District of Mississippi, Kamont v. West,
258 F. Supp. 2d 495, 500 (S.D. Miss. 2003), in which such a rule was applied, and noted that a
debtor-plaintiff
"will usually be deemed to have had a motive to conceal" claims where the
failure to disclose them would have added assets to the bankruptcy estate.
Calafiore, 418 F.
Supp. 2d at 798. Notably, the Calafiore court found only that to the extent the debtor-plaintiff
knew of his claim and had a motive to conceal it, "it would be reasonable to find [him] judicially
estopped" from pursuing such claims, and it stopped short of actually applying the doctrine and
granting summary judgment.
Id. at 799-800 (emphasis added).
Thus, although the existence of evidence showing that a debtor-plaintiff had knowledge
of a claim and a motive to conceal may provide a basis for inferring intent, the Court does not
agree that such a finding is necessarily required as a matter of law. Courts must apply judicial
estoppel with caution, rather than with "inflexible prerequisites or an exhaustive formula." New
•
Hampshire v. Maine, 532 U.S. 742, 751 (2001); John S. Clark Co. v. Faggert & Frieden, P.e.,
65 F.3d 26, 29 (4th Cir. 1995). To apply judicial estoppel reflexively simply because Access did
not list its potential cause of action in its bankruptcy schedule would run afoul of the mandate
10
that each application of the doctrine be "decided upon its own specific facts and circumstances."
See King, 159 F.3d at 196. Even courts that have applied judicial estoppel in this context have
recognized that judicial estoppel is inappropriate where the evidence does not demonstrate the
debtor-plaintiffs
bad faith. See, e.g" Eubanks v. CBSK Fin. Gr., Inc., 385 F.3d 894,897-98
(6th
Cir. 2004) (concluding that judicial estoppel was not warranted where the plaintiffs "evidenced
no motive or intention to conceal the potential claim" and presented evidence indicating that they
had attempted to inform the United States Trustee and the bankruptcy court of their claim); Ryan
Operations G.P., 81 F.3d at 362 (concluding that it would be improper to apply judicial estoppel
where there was "no evidence" that the debtor-plaintiff omitted a legal claim from its bankruptcy
petition "in bad faith").
Here, it is not clear that Access "intentionally misled" the bankruptcy court "to gain an
unfair advantage."
See Lowery, 92 F.3d at 224. Access has asserted facts that establish a dispute
. on the question of intent. First, Access disputes the allegation that it knew it possessed a, legal
claim at all. In his affidavit, Keyvan Shokraei, President of Access, stated that "it was not clear
to me that Access ha[d] a viable, legal cause of action against SIA and O'Bryan" at the time of
the bankruptcy filing, and that "[i]t was not until after the dismissal of the bankruptcy" that
Shokraei "learned that the claim against SIA was actionable."
Summ. J. Ex., ECF No. 28-1.
Shokraei Aff. ~~ 7-9, Opp'n Mot.
Because Access does not allege a straightforward
breach of
contract claim but instead has offered an unconventional tort claim premised on the position that
SIA had a duty to disclose in advance its decision not to renew Access's insurance policy, it is
plausible that Access would not have identified such a claim immediately.
that Access's
Shokraei also asserts
lack of intent to mislead the bankruptcy court is evidenced by the fact that he
informed the Trustee of the circumstances
leading to the bankruptcy, including the lqss of
11
Access's
commercial automobile insurance.
See Eubanks, 385 F.3d at 898 (considering oral
disclosures to the Trustee in determining that the debtor-plaintiff lacked an intent to deceive as
required to apply judicial estoppel).
In addition, the timing of the lawsuit supports a lack of intent to mislead.
Chapter 11 petition was dismissed on April 8, 2014.
Access's
Access did not file this lawsuit until
September 21, 2015. The fact that well over a year passed between the end of the ban1a;uptcy
proceeding and the filing of this lawsuit distinguishes this case from those in which the court
could infer intent based on the speedy turnaround from resolution of the bankruptcy case to the
filing of a civil case. See, e.g., Calajiore, 418 F. Supp. 2d at 797 (observing that the plaintiff
filed his lawsuit the same day he received a discharge in bankruptcy).
Finally, the fact that Access's Chapter 11 petition was dismissed because Access failed to
make required filings raises further questions as to Access's intent.
In the typical case where
there has been a discharge of debts, creditors would be deprived of the potential proceeds from
an undisclosed claim.
See, e.g., In re Coastal Plains, 179 F.3d at 213 (finding that judicial
estoppel was appropriate where the debtor-plaintiff
"avoided paying its debts by filing [for]
bankruptcy" under circumstances where the debtor-plaintiff could "sue on undisclosed claims
and possibly recover windfalls ...
to the detriment of creditors"); Payless, 989 F.2d at 571
(affirming the application of judicial estoppel where the debtor-plaintiff concealed its claims and
received a discharge through which it could "get rid of (its] creditors on the cheap" and possibly
obtain "a windfall" by asserting the claims post-discharge).
dismissal
of Access's
Chapter 11 petition, Access's
Here, however, following the
assets again became available to its
creditors, along with any potential proceeds from a successful lawsuit. The fact that Access did
not act diligently to take all necessary steps to obtain a bankruptcy discharge, and instead had its
12
claim dismissed in a manner that prevented a potential windfall in the event of recovery, may be
indicative of a lack of intent to mislead.
Thus, there is, at a minimum, a genuine issue of
material fact on whether Access's failure to schedule the negligence claim was intentional.
The case law cited by Defendants does not alter this conclusion.
actually denied summary judgment,
In Calafiore, the court
even though there were stronger indicia of intentional
concealment of a claim because the debtor-plaintiffs
received a complete discharge of their
debts, then initiated a civil lawsuit based on the undisclosed claim the same day they received
that discharge. See Calafiore, 418 F. Supp. 2d at 796-97,802.
In In re USinternetworking, there
was "undisputed testimony" that the claim was deliberately omitted even though the debtor, "had
knowledge of the existence of the claim, knew the amount it claimed, had advised its Board, and,
ultimately,
had filed an action to recover
USinternetworking,
RDB-12-3799,
310 B.R. at 283.
the claim"
in another jurisdiction.
In re
Finally, in Letke v. Wells Fargo Home Mortgage, No.
2015 WL 6163517 (D. Md. Oct. 19, 2015); the plaintiff plainly knew she
possessed a legal cause of action because her civil lawsuit was pending at the time she filed for
bankruptcy, yet she omitted the claim from her Schedule of Personal Property and proceeded to
receive a complete discharge. Id at *2, *5-6.
In contrast, Access disputes that it knew it had a legal claim against Defendants, and the
facts and circumstances in the record to date establish a genuine issue of fact whether Access
intentionally concealed its negligence claim from the bankruptcy court or did so inadvertently or
by mistake. Thus, the Court declines to apply the doctrine of judicial estoppel at this time. See
John S. Clark Co, 65 F.3d at 27, 29 (holding that dismissal on the basis of judicial estoppel is
improper "when the facts alleged to have prompted a prior, inconsistent position are in dispute").
The First Motion for Summary Judgment is denied.
13
III.
Expert Witnesses
Defendants' Second Motion for Summary Judgment posited that their Motion to Strike
Access's expert witnesses on the standard of care and damages was likely to be granted, and
without these experts, Access would be unable to present sufficient evidence of the standard of .
care owed by insurance producers or the existence and amount of damages. In its Order of
September 14, 2016, the Court (Day, MJ.) denied the motion to strike the standard of care
expert, so the motion for summaryjudgment as to that expert is denied as moot.
The Court, however, granted the motion to strike the testimony of Access's damages
expert. Defendants argue that proof of damages is a topic "beyond the ken of the average juror,"
so without the expert, Access will be unable to prove the existence or amount of damages
allegedly suffered. Second Mot. Summ. 1. at 4, ECF No. 41. In turn, Defendants argue that
,
because damages is one of the essential elements of its negligence claim, they are entitled to
summary judgment. See Jacques v. First Nat. Bank of Md, 515 A.2d 756, 758 (Md. 1986)
(stating that to prove negligence, a plaintiff must show (1) a duty owed, (2) a breach of that duty,
(3) that the breach of duty caused harm, and (4) damages). Access counters that no expert is
needed to prove damages in this case, because Access personnel can testify to the loss of certain
long term contracts and provide evidence of lost income during the period it was uninsured.
Expert testimony is generally required when necessary to aid the factfinder in
understanding complex or technical matters that are beyond the ken of the average layperson.
See, e.g., Schultz v. Bank of America, NA., 990 A.2d 1078, 1086 (Md. 2010) (finding that expert
testimony is often required to establish the standard of care owed by a professional). Accord
Hall v. Sullivan, 272 F. App'x 284, 288-89 (4th Cir. 2008) (applying Maryland law to determine
that expert testimony was required to prove the standard of care in an attorney malpractice case);
14
Osunde v. Lewis, 281 F.R.D. 250, 261-62 (D. Md. 2012) (applying Maryland law and finding
that expert testimony was required to prove cause of injury where there was "a complicated
medical question").
It is not essential to produce expert testimony on matters that ordinary jurors
would be aware of "as a matter of general knowledge."
Babylon v. Scruton, 138 A.2d 375" 379
,
(Md. 1958) (holding that a jury did not require expert testimony to find that reinforcements on a
concrete slab that broke and caused injury were inadequate).
If a jury may reasonably reach a
decision without the help of an expert, a party's failure to produce expert testimony will not
amount to a failure to meet the party's burden of proof. See, e.g., Ross v. Hous. Auth. of BaIt.
City, 63 A.3d 1, 13-14 (Md. 2013) (stating that expert testimony was not required to show the
link between a defendant's property and a plaintiffs childhood exposure to lead paint); Virgil v.
Kash N' Karry Servo Corp., 484 A.2d 652, 656 (Md. Ct. Spec. App. 1984) (holding that expert
testimony was not necessary to establish that an exploding thermos was defective).
The Court is not persuaded that proving the existence and amount of damages in this case
requires the testimony of an expert. The concept that a business unable to operate due to 'a loss
of insurance coverage would suffer lost contracts and lost income during the period of closure is
within the general knowledge of average jurors.
611-13,627
See Kleban v. Eghrari-Sabet,
920 A.2d 606,
(Md. Ct. Spec. App. 2007) (reinstating a jury award based on a physician plaintiffs
testimony about the "nature of damages," including lost income and a decrease in new patients,
even though the trial court struck the plaintiffs expert witness on damages).
Defendants argue that Access's unsuccessful efforts to designate an accountant to serve
as an expert proves that Access cannot show the existence of damages without one.
But
Access's recognition that an expert might be useful to the jury does not mean that Access cannot
prove the existence of some damages without an expert. See Ross, 63 A.3d at 14-15 (holding
15
that summary judgment based on the lack of an expert was inappropriate where remaining lay
testimony could create disputes of material fact); Kleban, 920 A.2d at 612-13,627
(holding that
the jury could "reasonably have found that compensatory damages were proper" based on the
plaintiffs testimony).
The Second Motion for Summary Judgment is therefore denied.
CONCLUSION
For the foregoing reasons, Defendants' First Motion for Summary Judgment, ECF No.
21, is DENIED.
Defendants'
Motion for Summary Judgment Regarding Plaintiffs
Necessary Expert Witnesses, ECF No. 41, is also DENIED. A separate Order shall issue.
Date:
October 19,2016
THEODORE D. CHU
United States District
16
Lack of
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