Vigilant Insurance Company of New York v. McKenney's Inc et al
ORDER denying 37 Motion in Limine; granting in part and denying in part 39 Motion in Limine; granting in part and denying in part 61 Motion in Limine; granting in part and denying in part 36 Motion in Limine Signed by Honorable J Michelle Childs on 6/9/11.(awil)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
Vigilant Insurance Company of New York )
a/s/o Spartanburg Regional Healthcare
McKenney’s, Inc.; and
Robins & Morton Corporation,
C.A. No. 7:09-cv-02076-JMC
ORDER & OPINION
This matter is before the court on Plaintiff Vigilant Insurance Company of New York’s
(“Vigilant”) Motion in Limine [Doc. 37] to exclude McKenney’s, Inc.’s (“McKenney’s) and Robins
& Morton Corporation’s (“RMC” and collectively with McKenney’s “Defendants”) expert witness’s
testimony. Additionally, before the court is Defendants’ Motions in Limine [Docs. 36, 39, 61] to
exclude certain witness testimony and documentary evidence to be offered at trial by Vigilant. For
the following reasons, the court denies Vigilant’s Motion and grants in part and denies in part
This case arises out of the damages caused by a water leak that occurred at a Spartanburg
Regional Healthcare System (“Spartanburg Regional”) facility located in Spartanburg, South
Carolina. The complaint alleges that the leak occurred when two pipes integrated into the roof drain
system of the facility separated during a rain event on July 13, 2006, and that the leak caused damage
to both the structure of the facility, as well as some essential and highly specialized imaging
equipment that was in use on the floor below the leak. Spartanburg Regional filed a claim with its
insurance carrier, Vigilant. Vigilant paid the claim and now seeks to recover the amount paid under
the claim from the Defendants. This case was originally filed in State court, but was removed to this
court by the Defendants. Each party filed a motion in limine to exclude certain witnesses and
evidence to be presented at trial. The court held a hearing on the motions on June 7, 2011.
Vigilant’s Motion in Limine to exclude or limit the testimony of Robert Carter
Vigilant requests the court to exclude the testimony of Defendants’ expert witness, Robert
Carter, pursuant to Federal Rule of Evidence 702 on the grounds that Carter’s opinions lack the
reliability and relevance required by the Federal Rules of Evidence.
Defendants argue that Vigilant’s Motion should be denied as untimely because it is a Daubert
motion which should have been filed prior to the July 16, 2010, deadline set forth in the Scheduling
Order issued by the court on December 3, 2009. Pursuant to the Scheduling Order in this case,
Vigilant’s Motion is untimely. However, counsel for the parties acknowledged that expert witness
depositions were held in October 2010, by consent of all parties, long after the Daubert motion
deadline passed. Therefore, Daubert motions were not appropriate for filing with the court until the
conclusion of the expert witness depositions.
Pursuant to Federal Rule of Civil Procedure 16(b)(4), a court has discretion to modify a
scheduling order for good cause. See FED . R. CIV . P. 16(b)(4). The primary consideration in
determining whether a party meets the “good cause” standard is the diligence of the moving party.
See Montgomery v. Anne Arundel Cnty., 182 Fed. App'x 156, 162 (4th Cir. 2006) (unpublished).
The court finds that Vigilant has shown good cause for its failure to comply with the scheduling
Upon consideration of the merits of Vigilant’s motion, the court finds that it fails on
substantive grounds. Defendants argue that even if the motion's timeliness is not an issue, Carter's
testimony should be allowed because it would not violate the Federal Rules of Evidence.
Defendants’ expert witness, Robert "Bob" Carter, is a mechanical engineer with over 50 years
of experience. Carter's testimony purports to be based on his engineering experience, photographs
of the pipes, and the report he compiled about the incident. Vigilant primarily attacks Carter’s
opinion as to the cause of the incident at issue and argues that Carter’s investigation is insufficient
to support his conclusions. Vigilant does not argue that Carter’s actual method for making his
conclusion is unreliable. In fact, Carter’s method of reviewing photographs, making calculations,
and relying on his experience does not substantially deviate from the method employed by Vigilant’s
expert witness, Roger Davis. It is the province of the jury to evaluate the expert witness’s testimony;
the adequacy of the expert’s knowledge goes to the weight of the testimony, not its admissibility.
Humpries v. Mack Trucks, Inc., 198 F.3d 236 (4th Cir. 1999).
Therefore, the court denies Vigilant’s request to exclude or limit Robert Carter’s testimony.
Defendants’ Motions in Limine to exclude or limit the testimony of Buddy Bush, David
Cook, or other like Representatives or Officials from the City of Spartanburg, South
Buddy Bush and David Cook are employees with the City of Spartanburg. Defendants seek
to prevent these witnesses from offering testimony at trial regarding the City of Spartanburg’s
building codes and Defendants’ compliance with the codes in installing the piping at issue.
Specifically, Defendants object to the admission of their testimony on the grounds that Vigilant
intends to present them as expert witnesses despite Vigilant’s failure to timely identify them as
Rule 26(a)(2)(C) mandates that all expert witness disclosures "shall be made at the times and
in the sequence directed by the court." FED . R. CIV . P. 26(a)(2)(C). Furthermore, if a party fails to
comply with the requirements of Rule 26, Rule 37 provides that the testimony of that expert should
be limited or excluded, unless such failure to comply is harmless or substantially justified. FED . R.
CIV . P. 37(c)(1). The court has “broad discretion” to determine whether the nondisclosure of a
witness or evidence is substantially justified or harmless. See States Rack & Fixture, Inc. v.
Sherwin–Williams Co., 318 F.3d 592, 597 (4th Cir. 2003). In determining whether a party's failure
to disclose was substantially justified or harmless, this court is guided by consideration of five
factors: (1) the surprise to the party against whom the evidence would be offered; (2) the ability of
that party to cure the surprise; (3) the extent to which allowing the evidence would disrupt the trial;
(4) the importance of the evidence; and (5) the non-disclosing party's explanation for its failure to
disclose the evidence. See Southern States Rack And Fixture v. Sherwin–Williams Co., 318 F.3d
592, 597 (4th Cir. 2003).
“Rule 26 disclosures are often the centerpiece of discovery in litigation that uses expert
witnesses, [and a] party that fails to provide these disclosures unfairly inhibits its opponent's ability
to properly prepare, unnecessarily prolongs litigation, and undermines the district court's
management of the case.” Carr v. Deeds, 453 F.3d 593, 604 (4th Cir. 2006) (citing Saudi v. Northrop
Grumman Corp., 427 F.3d 271, 278-79 (4th Cir. 2005)). Therefore, a party's failure to disclose in
accordance with the Rule cannot be considered “justified” or “harmless” simply because the
opposing party had an opportunity to depose the witness. See Carr, 453 F.3d 593 at 605. This
would shift to the opposing party the burden that Rule 26 indisputably places on the party calling the
Vigilant does not dispute that it failed to timely designate these witnesses as experts and
failed to provide a report in accordance with Rule 26. Instead, Vigilant argues that its failure was
substantially justified or harmless because Defendants have long been aware that the case involved
building code issues, but did not challenge Vigilant’s evidence concerning the building codes until
the parties’ mediation in December. Accordingly, Vigilant argues that it added these witnesses in
response to Defendants’ claim that Vigilant lacked sufficient evidence regarding Defendants’
compliance with the building codes and that Vigilant is, therefore, justified in the late disclosure.
Additionally, Vigilant argues that the late disclosure is harmless because Defendants were notified
of the witnesses’ proposed testimony, and were given an opportunity to depose the witnesses.
The court is unpersuaded by Vigilant’s arguments. Vigilant has been aware of its claims of
building codes violations since early on in the case, just as it claims Defendants have known that the
case involved building code issues. Vigilant cannot obviate its obligations under the rules simply
because it failed to recognize the need for certain testimony until after Defendants brought the matter
to Vigilant’s attention and after the relevant deadline had passed. While Defendants have deposed
the witnesses from the City of Spartanburg, Vigilant’s late disclosure of these witnesses as experts
curtailed Defendants’ ability to rebut the proposed expert testimony of these witnesses. Accordingly,
the court finds that Vigilant’s untimely disclosure of these witnesses was not substantially justified
The court grants Defendants’ Motion insofar as it seeks to prohibit Buddy Bush and David
Cook from offering expert testimony, particularly any testimony as to the purpose of the building
code or the cause of the incident. However, Buddy Bush and David Cook may present factual
testimony within the scope of their employment with the City of Spartanburg including the
applicability of the building codes and their participation in the enforcement of those codes in this
Defendants’ Motions in Limine to exclude or limit the testimony of William Marx
(Vigilant’s Adjuster) as an expert on any subject, or any testimony by Mr. Marx that
requires an expert opinion
Defendants request that the court exclude or limit the testimony of William Marx, Vigilant’s
employee responsible for adjusting Spartanburg Regional’s claim, because Vigilant proposes to offer
Marx as an expert, but did not comply with the disclosure requirements of the Federal Rules of Civil
Procedure. Vigilant disclosed that Marx would be a witness at trial, but did not disclose that it
intended to call Marx as an expert witness until the end of Marx’s deposition after the expiration of
the expert disclosure deadline. Vigilant also failed to provide any expert witness report from Marx.
The first question to be answered by the court is whether Marx qualifies as an expert witness.
Expert testimony is testimony based on scientific, technical, or other specialized knowledge that will
assist the trier of fact in reaching a decision on an issue. United States v. Dorsey, 45 F.3d 809, 813
(4th Cir. 1995). Here, Vigilant proposes to tender Marx to offer testimony related to the damages
Vigilant seeks to recover. Particularly, Marx may testify regarding his method of valuation of the
claim presented to Vigilant by Spartanburg Regional which may include a discussion regarding his
determination of the value of the medical equipment damaged as a result of the incident at issue.
The value of medical equipment is not likely to be within common knowledge and may require
specialized knowledge of medical equipment. Therefore, it is conceivable that Marx will offer
testimony at trial that may be categorized as expert testimony.1
Assuming that Marx will give expert opinion testimony, the court must next determine
whether Marx, as an employee of Vigilant, is subject to the disclosure requirements of the Federal
Rules of Civil Procedure. FED . R. CIV . P. 26(a)(2)(B) requires litigants to produce written reports
for any witness who is “retained or specially employed to provide expert testimony in the case” or
“whose duties as the party's employee regularly involve giving expert testimony.” To the extent that
a witness’s opinion is based on facts learned or observations made “in the normal course of duty,”
the witness is a hybrid witness (i.e., a hybrid of an expert and a fact witness) and need not submit
an expert report. See id.; Nat’l R.R. Passenger Corp. v. Ry. Express, 268 F.R.D. 211, 216 (D. Md.
2010) (internal citations omitted). The same witness, however, must submit a report regarding any
opinions formed specifically in anticipation of the litigation, or otherwise outside the normal course
of a duty. See Nat’l R.R. Passenger Corp., 268 F.R.D. at 216.
Based on Vigilant’s assertions in its filings and counsel’s argument at the hearing, it appears
that Marx proposes to testify in an expert witness capacity regarding facts and opinions gained in the
course of his investigation of Spartanburg Regional’s claim - or within the scope of his employment.
Therefore, Vigilant was not obligated under the Federal Rules of Civil Procedure to provide an
Vigilant also presents a compelling argument that Marx should be allowed to testify as a lay
opinion witness regarding his valuation of the medical equipment. South Carolina courts have
regularly allowed the opinion testimony of a non-expert who has sufficient knowledge of the value
of the property in question or who has had ample opportunity for forming a correct opinion on it. See
City of Spartanburg v. Laprinakos, 267 S.C. 589, 595, 230 S.E.2d 443, 444-45 (1976). However,
the witness must demonstrate that he or she has some source of knowledge of the value of the
property in order to remove his or her opinion from the realm of mere conjecture. Id. Therefore,
depending on the basis of Marx’s testimony, it is equally conceivable that he may offer testimony
that may be categorized as lay opinion testimony.
expert report from Marx. If Vigilant intended to offer Marx as an expert witness, however, it was
obligated to disclose Marx as an expert witness by the April 2, 2010, deadline set forth in the
Scheduling Order [Doc. 8] and provide a summary of the subject matter and opinions to which he
was expected to testify. See FED . R. CIV . P. 26(a)(2)(A) and (C). In March 2010, Vigilant provided
its Answers to Defendant McKenney’s, Inc.’s First Set of Interrogatories to Plaintiff, [Doc. 68-4].
In the document, Vigilant does not specifically list Marx as an expert, but does list him as a witness
and submits that he has knowledge of the adjustment of the claim. Vigilant also produced Marx’s
claim file which included the information on which Vigilant seeks to offer his testimony. The court
is unimpressed with Vigilant’s failure to strictly comply with the disclosure requirement, but finds
that the substance of the information required by Rule 26(a)(2)(A) and (C) was provided to
Defendants prior to the April 2, 2010, expert disclosure deadline.
Accordingly, the court denies Defendants’ motions to exclude Marx’s testimony because
Marx is a hybrid witness, and his opinions appear to be based on his investigation of Spartanburg
Regional’s claim within the scope of his employment as an adjuster. However, the court limits
Marx’s testimony to the facts and opinions concerning his method of valuation of Spartanburg
Regional’s claim in the course of his employment. Marx may not offer testimony regarding his
opinion of “what a willing buyer would pay” for medical equipment, the fair and reasonable amount
necessary to return the hospital to its position prior to the incident, or Spartanburg Regional’s
Defendants’ Motion in Limine to exclude documents related to damages
Defendants ask the court to exclude certain documents as hearsay because no witness from
the companies that prepared the documents have authenticated them or have been identified as
witnesses at the trial. The documents at issue relate to Vigilant’s damage calculations and include
a damages summary, invoices from various vendors, and other documents related to the damages
Vigilant seeks in this matter.
A record is excluded from the hearsay rule if it is made at or near the time of the issue in
question by, or from information transmitted by, a person with knowledge, if the record is kept in
the course of regularly conducted business, and if it was the regular practice of the business to make
the record, all as demonstrated by testimony of the record’s custodian or other qualified witness.
FED . R. EVID . 803(6). Although the usual case involves an employee of the preparing business laying
the necessary foundation under 803(6), the law is clear that under circumstances which demonstrate
trustworthiness it is not necessary that the one who kept the record, or even had supervision over its
preparation, testify. See United States v. Flom, 558 F.2d 1179, 1182 (5th Cir. 1977); U.S. v. Farmer,
820 F. Supp. 259, 264-65 (W.D. Va. 1993) (finding that no employee of the preparing business need
testify when an otherwise qualified witness testifies as to the foundation for the admission of
documents in circumstances that demonstrate trustworthiness). Records one business receives from
another are admissible as a business record “when those records are kept in the regular course of
business, relied upon by that business, and where that business has a substantial interest in the
accuracy of the records.” MRT Constr., Inc. v. Hardrives, Inc., 158 F.3d 478, 483 (9th Cir. 1998).
Vigilant contends that Marx relied upon the documents at issue to determine the amount
Vigilant should pay its insured for the damage it suffered. Marx is an insurance adjuster with over
ten years of experience in, among other things, evaluating all sorts of documents to reach a final
damages calculation and keeping those documents in the normal course of his job. As an insurance
adjuster, Marx has a substantial interest in the accuracy of the documents in question because he
used them in the process of determining the amount Vigilant, his employer, would pay Spartanburg
Regional for its claim. Accordingly, Marx may constitute a qualified custodian of the records, and
they may be admitted through his testimony under FED . R. EVID . 803(6) provided that Vigilant lays
the proper foundation for admission.
Vigilant also indicated it may attempt to introduce the documents through the testimony of
Jason Head, Yan Ratke, and possibly other witnesses. Vigilant acknowledged, however, that neither
Head nor Ratke kept the documents during his normal course of business. The court finds Head and
Ratke unqualified to authenticate the documents, given the information provided to the court in
connection with these motions.
Defendants’ Motion in Limine to exclude certain manufacturer recommendations
Defendants ask the court to exclude the 2010 manufacturer’s recommendation from Tyler
Pipe and the 2007 manufacturer’s recommendation from Charlotte Pipe and Foundry because the
documents are irrelevant. Defendants argue that the recommendations were published after the
installation of the pipes at Spartanburg Regional occurred, and therefore they have no bearing on this
Evidence is relevant if it has “any tendency to make the existence of any fact that is of
consequence to the determination of the action more probable or less probable than it would be
without the evidence.” FED . R. EVID . 401. In addition to its relevance, the probative value of
evidence must not be substantially outweighed by the danger that it will cause unfair prejudice. See
FED . R. EVID . 403; United States v. Queen, 132 F.3d 991, 997 (4th Cir. 1997).
The court notes that during the hearing, Vigilant indicated it would seek to admit a copy of
Charlotte Pipe and Foundry’s instructions from 2002 instead of the 2007 document, but also
indicated that Roger Davis, its expert, was prepared to testify that the substance of the
recommendations was valid at the time of installation regardless of the date of publication on the
copies he referenced. Defendants further objected to the admission of the 2002 recommendations
on the grounds that the document was created before the installation. Based on Davis’s proposed
testimony regarding the substance of the recommendations, the court determines that they are
sufficiently relevant to be admissible. Defendants will have the opportunity to cross-examine Davis
about the document. Therefore, the court denies Defendants’ requests to exclude the manufacturer
Defendants’ Motion in Limine to exclude or limit the testimony from Roger E. Davis
Defendants request the court to exclude the testimony of Vigilant’s expert witness, Roger
Davis, on the grounds that he cannot testify regarding the applicable standard of care because he
referenced manufacturer recommendations with publication dates after the installation at issue in this
case. Despite Defendants’ characterization of their motions, they essentially contend that Davis’s
opinions lack the reliability and relevance required of them by the Federal Rules of Evidence.
Vigilant submits that Davis's testimony will be based on his experience, inspection of the
hospital, inspection of the Roof Drainage System, eyewitness interviews, calculations, photographs
of the pipes, research of building codes, and the manufacturer recommendations. Defendants assert
that Davis testified in his deposition that his opinion was based on the manufacturer
recommendations which Defendants believe are inapplicable. Similar to Vigilant’s attack of Carter’s
opinion, Defendants’ motions simply raise issues which go to the weight of Davis’s testimony and
not its admissibility. See Humpries, 198 F.3d 236; see supra, Part A.
Accordingly, the court denies Defendants’ request to exclude or limit Davis’s testimony.
For the reasons set forth above, it is ORDERED that Vigilant’s Motion in Limine [Doc. 37]
to exclude or limit the testimony of Robert Carter is DENIED . Defendants’ Motions in Limine [Docs.
36, 39, 61] are GRANTED IN PART AND DENIED IN PART as set forth herein.
IT IS SO ORDERED .
s/ J. Michelle Childs
United States District Judge
June 9, 2011
Greenville, South Carolina
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