Flagstone Development, LLC et al v. Joyner et al
ORDERED The expert testimony of James R. Foley and Sheryl Sacry, CPA isEXCLUDED. Neither will be permitted to testify as an expert witness at trial. Signed by Judge Sam E Haddon on 8/31/2017. (AMC)
AUG 3 1 2017
Clerk, U.S. District Court
District Of Montana
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
FLAGSTONE DEVELOPMENT LLC,
an Arizona limited liability company,
No. CV 08-100-BLG-SEH
TIMBERLANDS, LLC, a Montana
The Court ordered, on April 20, 2016, that each party file with the Court
Fed. R. Civ. P. 26(a)(2) reports of liability and damage experts by May 13, 2016.
Plaintiff timely filed the report of James R. Foley ("Foley"), dated April 13, 2011, 1
and a letter authored by John C. Breslo that disclosed Sheryl Sacry, CPA ("Sacry")
as a damages witness. 2 Attached to Breslo's letter is Sacry's C.V. and a series of
spreadsheets and tables purporting to calculate Plaintiffs expected profits from
the development of the 30 Mile Ranch.
A jury trial limited to the only remaining claim in this case, breach of
contract, was commenced on April 24, 201 7. At that trial, the jury determined by
general verdict that Defendant had materially breached the Buy-Sell Agreement
between Flagstone Development LLC and Rocky Mountain Timberlands, LLC. 3
The final unresolved issue is determination of any damages to Plaintiff resulting
from such a breach.
At the status conference held on July 20, 2017, the Court tentatively ruled
that neither Foley nor Sacry would be allowed to testify at the damages trial
because Foley's report failed to comply with Fed R. Civ. P. 26(a)(2) and Sacry did
not submit a report at all. The Court invited the parties to submit motions and
briefs, not supplemental expert reports, directed to the admissibility of Foley's and
Sacry's testimony before making its final ruling. Accordingly, Defendant filed its
statement of position on July 27, 2017, and Plaintiff filed its statement of position
on July 28, 2017.
Attached to Plaintiffs July 28, 2017, statement of position was a
supplemental report from Foley dated July 26, 2017. Extension of the May 13,
2016, deadline to file expert reports was neither sought nor granted.
"Under Daubert, the trial court must act as a 'gatekeeper' to exclude junk
science that does not meet Federal Rule of Evidence 702's reliability standards by
making a preliminary determination that the expert's testimony is reliable." 4
"[Daubert] requires a court to admit or exclude evidence based on its scientific
reliability and relevance .... Thus, an expert's 'inference or assertion must be
derived by the scientific method' to be admissible." 5 Further, "expert testimony
[must] relate to scientific, technical or other specialized knowledge, which does
not include unsubstantiated speculation and subjective beliefs." 6
Foley's April 13, 2011, report does not comply with the requirements of
Fed. R. Civ. P. 26(a)(2)(B)(iv) and (v): it makes no mention of his prior
publications, if any. It fails to list the cases in which he was retained as an expert.
Ellis v. Costco Wholesale Corp., 657 F.3d 970, 982 (9th Cir. 2011) (citing Kumho Tire
Co. v. Carmichael, 526 U.S. 137, 145, 147-49 (1999)).
Id. (quoting Daubert v. Merrell Dow Pharms, Inc., 509 U.S. 579, 589-90 (1993)).
Diviero v. Uniroyal Goodrich Tire Co., 114 F .3d 851, 853 (1997) (citing Daubert, 509
U.S. at 590).
Moreover, Foley's proposed testimony would not be appropriate under Fed. R.
Evid. 702(c) and (d): the report does not reveal what methods and principals, if
any, he used to form his opinions or whether such methods and principals were
reliable. It leaves the Court unable to determine if such methods and principals
were reliably applied. Instead, it purports to be based on Foley's prior experience
and subjective beliefs. Expert opinions formed from such bases are inappropriate
under Daubert and will not be allowed at trial. The July 26, 201 7, supplemental
report submitted without authorization of the Court will be disregarded.
Sacry's proposed expert testimony is similarly inappropriate under Daubert
and Fed. R. Evid. 702 (b), (c), and (d). Breslo's letter states that Sacry's opinions
are supported by the proformas she prepared in the original 30 Mile Ranch
Investment Prospectus. However, neither the letter nor the attachments divulge the
facts or data upon which the opinions are based. Further, Breslo's letter and its
attachments do not disclose what methods and principals, if any, were applied by
Sacry in calculating projected profits or whether such methods and principals were
reliable. Consequently, the Court is unable to determine if such methods and
principals were reliably applied. Such opinions based on undisclosed facts,
methodology, and principals do not allow the Court to examine the soundness of
the expert's conclusions under Daubert and will not be allowed at trial.
The expert testimony of James R. Foley and Sheryl Sacry, CPA is
EXCLUDED. Neither will be permitted to testify as an expert witness at trial.
DATED this 3/;:;.--aay of Au~~2 7.
United States District Judge
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