Spring Street Apts Waco, LLC v. Philadelphia Indemnity Insurance Company
ORDER GRANTING 50 Motion to Limit Testimony of Plaintiffs Experts Lewis OLeary and Daniel Smith. Signed by Judge Jeffrey C. Manske. (jgb)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF TEXAS
SPRING STREET APTS WACO, LLC,
Case No. 6:16-CV-00315-JCM
Before the Court is Defendant’s Motion to Limit the Testimony of Plaintiff’s Experts,
Lewis O’Leary and Daniel Smith, pursuant to Federal Rule of Evidence 702. ECF No. 50. The
parties have consented to the jurisdiction of the undersigned in accordance with the provisions of
28 U.S.C. § 626(c), Federal Rule of Civil Procedure 73, and the Local Rules of the United States
District Court for the Western District of Texas. See ECF Nos. 15, 16 and 18. For the reasons
stated below, Defendant’s Motion (ECF No. 50) is GRANTED.
This suit involves an insurance claim for damages to Plaintiff’s property. Philadelphia
Indemnity Insurance Company (“Defendant”) issued a Builder’s Risk insurance policy covering
from May 7, 2013, to May 7, 2014 (the “Policy”) to Spring Street Apartments Waco, LLC
(“Plaintiff”). See Pl.’s Am. Compl. ¶¶ 7-8, ECF No. 29. The Policy covered Plaintiff’s apartment
complex known as The Hype Apartments (the “Property”). Id. On April 15, 2014, Plaintiff
submitted a claim to Defendant for roof and water damage sustained on at least 25 buildings on
the Property. Id. ¶ 10. Plaintiff claims the damage resulted from severe weather, including
damage sustained from winds and strong gusts, which occurred on March 28, 2014, and from a
hailstorm that occurred on April 14, 2014. Id. ¶¶ 9-10.
In response to Plaintiff’s claim, Defendant engaged Crawford & Company (“Crawford”),
a national claim adjusting firm, to investigate and adjust Plaintiff’s reported loss. Id. ¶ 11. Based
on the adjuster’s inspection of the Property, Crawford retained engineers to further inspect the
Property. See id. ¶ 12. The engineers put forth their findings from the inspection in a report
referred to as the “Donan Report.” Id. Plaintiff asserts that the Donan Report contains numerous
deficiencies. Id. ¶¶ 13-17.1
Plaintiff filed this lawsuit against Defendant in the 414th Judicial District of McLennan
County, Texas, on June 30, 2016. ECF No. 1. On August 8, 2016, Defendant removed the case to
the United States District Court for the Western District of Texas. ECF No. 1. On November 7,
2016, Defendant consented to the undersigned’s jurisdiction. ECF No. 15.
On April 26, 2017, Defendant filed a motion pursuant to Rule 702 of the Federal Rules of
Evidence seeking to limit the opinions of Plaintiff’s proffered experts, Lewis O’Leary and Daniel
Smith. Def.’s Mot., ECF No. 50. On May 10, 2017, Plaintiff filed a response to Defendant’s
motion Pl.’s Resp., ECF No. 52.
Defendant requests this Court grant its Motion to Limit Testimony of Plaintiff’s Experts
Lewis O’Leary (“O’Leary”) and Daniel Smith (“Smith”). Defendant seeks to limit O’Leary’s
and Smith’s testimony under Rule 702 because:
[t]he joint report from these experts and the estimate from
Mr. O’Leary that followed all rely, in important part, on the
opinions presented in the report of a meteorologist and
The alleged deficiencies included: the failure to search for reports of severe weather for the dates
preceding the date on which Plaintiff reported the damage; misrepresenting conversations that the
engineers had with Plaintiff’s representative, Mr. John Harvey; the unreasonable use of a limited
definition of what constitutes wind damage; inadequately addressed any damage to the interior of the
property; and improperly reported that long-term exposure to the elements caused the current condition of
the Property’s roofs. Pl.’s Am. Compl. ¶¶ 13-17.
retained expert whom Plaintiff has not designated, Stephen
Def.’s Mot. at 1. In addition, Defendant seeks to limit O’Leary’s and Smith’s testimonies
because Stephen Harned’s (“Harned”) opinions do not satisfy the evidentiary standards under
Rule 702; therefore, O’Leary’s and Smith’s opinions that relied on Harned’s opinions also do not
satisfy the evidentiary standards under Rule 702. Id. at 1-2. In response, Plaintiff argues that
Defendant’s Motion should be denied because: (1) it is not in compliance with the Local Rules;
and (2) Plaintiff’s experts are entitled to rely on Harned’s weather data. Pl.’s Resp. at 2.
Defendant argues that any of O’Leary’s and Smith’s opinions that were made by relying
on Harned’s opinions do not satisfy the evidentiary standards under Rule 702 because Harned’s
opinions do not satisfy the evidentiary standards under Rule 702.2 Federal Rule of Evidence 702,
which governs the admissibility of expert witness testimony, 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.
Fed. R. Evid. 702. A district court has considerable discretion to admit or exclude expert
testimony under the Federal Rules of Evidence. See Gen. Elec. Co. v. Joiner, 522 U.S. 136, 138–
42 (1997); see also Seatrax, Inc. v. Sonbeck Int'l, Inc., 200 F.3d 358, 371 (5th Cir. 2000).
In Daubert, the Supreme Court held that Rule 702 requires the district court to act as a
gatekeeper to ensure that “any and all scientific testimony or evidence admitted is not only
relevant, but reliable.” Daubert v. Merrell Dow Pharm., 509 U.S. 579, 589 (1993); see also
In response to Defendant’s Motion, Plaintiff first requests this Court deny Defendant’s Motion for
failure to comply with Local Rules. Though the Court admonishes Defendant to review and comply with
the Local Rules, the Court will rule on the merits of Defendant’s Motion. The Court will not be so lenient
in the future.
Kumho Tire Co. v. Carmichael, 526 U.S. 137, 146-47 (1999) (clarifying that the Daubert
gatekeeping function applies to all forms of expert testimony). The Court’s gatekeeping function
thus involves a two-part inquiry into reliability and relevance. Daubert, 509 U.S. at 589. Expert
testimony is only admissible “if it is both relevant and reliable.” Pipitone v. Biomatrix, Inc., 288
F.3d 239, 244 (5th Cir. 2002) (citing Daubert 509 U.S. at 589). First, the Court must determine
whether the proffered expert testimony is reliable—that is, based on a scientifically valid
methodology. See Daubert, 509 U.S. at 593. The aim is to exclude expert testimony based
merely on subjective belief or unsupported speculation. See id. at 590-93.
In Daubert, the Court offered a non-exclusive list of factors to consider, including
whether the relied upon theory or technique: (1) has been or can be tested; (2) has been subject to
peer review and publication; (3) has a known or potential rate of error; and (4) is generally
accepted within the relevant community. Id. at 592-95. “[W]hether Daubert’s specific factors
are, or are not, reasonable measures of reliability in a particular case is a matter that the law
grants the trial judge broad latitude to determine.” Kumho Tire Co., 526 U.S. at 153. The party
offering the testimony bears the burden of establishing its reliability by a preponderance of the
evidence. See Daubert, 509 U.S. at 592 n.10; Bourjay v. U.S., 483 U.S. 171, 171 (1987). Second,
the Court must determine whether the expert’s reasoning or methodology is relevant in that it
“fits” the facts of the case and will thereby assist the trier of fact to understand the evidence. See
Daubert, 509 U.S. at 591.
A. Reliability of Harned’s Expert Conclusions
Stephen Harned received his B.A. in Meteorology from Florida State University in 1970.
Pl.’s Resp. Ex. C. Currently, Harned is owner and president of Atlantic States Weather, Inc.
where he provides meteorological consulting services to attorneys, insurance companies,
engineers, architects, government agencies, and private citizens. Id. Before he began consulting,
Harned worked for the National Weather Service for thirty years. Id. Harned also served as
executive director of the National Weather Association, one of the two professional associations
for meteorologists in the United States. Id. Further, Harned has authored and edited numerous
journal articles relating to the field of meteorology. Id. Harned has received numerous awards in
the field of meteorology and is clearly well versed in the subject matter. Id. For purposes of the
instant motion, Defendant does not contest Harned’s qualifications as a meteorologist. See Def.’s
On May 2, 2017, Harned wrote a report analyzing the wind gusts at the Property for April
1, 2013 through April 14, 2014 plus rainfall for March 28 through April 14, 2014. Pl.’s Resp. Ex.
C. The report explained Harned’s technical analysis of observed weather data which led to his
determinations of the maximum wind gust speeds at the Property between April 1, 2013 and
April 14, 2014. Id. To reconstruct the wind gust speed at the Property Harned analyzed “archived
observations from the National Weather Service (NWS) supervised weather observing system at
the Waco Regional Airport and Doppler radar reflectivity images from the Ft. Hood Doppler
radar.” Id. The NWS supervised weather observing system at the Waco Regional Airport
documents wind gust speeds taken at the airport. Id. Harned used the Doppler images to
determine the strength of storms at the airport when the highest wind gust speeds were recorded.
Id. Then Harned would look at Doppler images to determine if the storm was the same strength
at the Property as the airport.3 Id. On October 12, 2013 and March 28, 2014, he found the storm
was stronger at the Property than at the airport. Id. From there, Harned determined that the winds
were higher at the Property than the recorded wind gusts at the airport. Id. Harned opined that the
maximum wind gust speed at the Property on March 28, 2014 was 55 mph. Id. The highest wind
gust speed recorded at the airport on March 28, 2014 was 49 mph. Id. Harned failed to include
the method he used to calculate the increase in wind gust speed from the speed taken at the
airport to the maximum wind gust speed he determined for the Property.
Defendant argues that Harned’s testimony is not the product of reliable principles and
methods under Rule 702. Def.’s Mot. at 11. As an initial matter, Defendant objects to Harned’s
opinion regarding the wind speed data for the Property. Id. Defendant contends that Harned
wholly failed to explain the methodology he used to extrapolate wind speed from the Waco
Regional Airport (located eight miles away from the Property), or how he corrected for the
differences in topography, elevation, and terrain between the disparate sites. Def.’s Reply, ECF
No. 55 at 2. Defendant further asserts that Harned also failed to explain the methodology he used
to extrapolate wind data from Doppler Weather Radar. Id. Overall, Defendant argues that
Plaintiff has not met its burden to show that Harned’s opinions are supported by a reliable
technique, theory, or methodology, and, therefore, fails to show that Harned’s opinions are
reliable. The undersigned will address each argument in turn.
First, the reliability prong requires that an expert opinion “be grounded in the methods
and procedures of science.” Johnson v. Arkema, Inc., 685 F.3d 452, 459 (5th Cir. 2012). The
Fifth Circuit has held that “[t]his requires some objective, independent validation of the expert’s
methodology.” Sec. & Exch. Comm’n v. Life Partners Holdings, Inc., 854 F.3d 765, 771 (5th Cir.
For example, if red pixels passed over the airport when the highest wind gust speed was taken for a
storm and red pixels passed over the Property, then Harned determined the wind gust speed at the
Property was very similar to the speed taken at the airport. Pl.’s Resp. Ex. C.
2017) (quoting Moore v. Ashland Chem. Inc., 151 F.3d 269, 276 (5th Cir. 1998). If the expert
lacks some objective, independent validation of his methodology, it is not helpful to the
factfinder and should be excluded. Kovaly v. Wal-Mart Stores Tex., L.L.C., 627 F. App’x 288,
290 (5th Cir. 2015). In Daubert, on remand from the Supreme Court, the Ninth Circuit held that
an expert may satisfy the reliability prong by:
explaining precisely how they went about reaching their
conclusions and point to some objective source—a learned
treatise, the policy statement of a professional association, a
published article in a reputable scientific journal or the
like—to show that they have followed the scientific
method, as it is practiced by (at least) a recognized minority
of scientists in their field.
Daubert v. Merrell Dow Pharm., Inc., 43 F.3d 1311, 1316 (9th Cir. 1995) (on remand).4 “The
expert’s assurances that he has utilized generally accepted [principles] is insufficient.” Brown v.
Illinois Cent. R.R. Co., 705 F.3d 531, 536 (5th Cir. 2013) (citing Moore, 151 F.3d at 276).
In Sec. & Exch. Comm’n, the Fifth Circuit reviewed the trial court’s admission of the
defendant’s expert testimony. Sec. & Exch. Comm’n, 854 F.3d at 775. The appellant claimed that
the trial court erred in allowing the expert testimony because the testimony was not based on
recognized methods that had been tested, subject to peer review and publication, or been
generally accepted by the community. Id. at 776. However, the expert had explained his analyses
in detail and indicated that his analysis was governed by Actuarial Standards Board (“ASB”). Id.
Additionally, the record included an ASB document of a proposed standard of practice that was
subsequently adopted by the ASB, and the expert’s analysis appeared to be consistent with the
standard laid out in the document. Id. The Fifth Circuit found that the trial court had not erred in
The Fifth Circuit has adopted the Ninth Circuit’s requirement in Daubert of an objective, independent validation of
the expert’s methodology. Life Partners, 854 F.3d at 771 n.5.
allowing the testimony because the ASB document was the kind of objective, independent
validation of the expert’s methodology that was referenced in Daubert. Id. at 776-77.
Here, the situation in Sec. & Exch. Comm’n does not exist. Harned purports to find the
wind speed at the Property by using the weather observing system at the Waco Regional Airport
and Doppler Radar reflectivity images from the Ft. Hood Doppler Radar. Pl.’s Resp. Ex. C.5
Harned’s report explained:
[t]he methodologies used for this report are generally
accepted meteorological analytic procedures for analyzing
airport weather observations and WSR-88D Doppler radar
output as they relate to wind gusts, rainfall, and wind
Pl.’s Resp. Ex. C. However, noticeably absent from Harned’s report are: (1) citations to journal
articles; (2) policy statements of professional associations; or (3) learned treatises. In fact,
Harned failed to point to any objective, independent validation of his methodologies anywhere in
his report, unlike the expert in Sec. & Exch. Comm’n. Nor did Plaintiff provide any objective,
independent validation of Harned’s methodologies in its response to Defendant’s motion.
[t]he methodologies used by Harned are generally accepted
meteorological analytic procedures supported in literature
and professional training courses for analyzing airport
weather observations and WSR-88D Doppler radar output
as they relate to wind gusts, rainfall, and wind direction.
Pl.’s Resp. at 6. Plaintiff, however, only points back to Harned’s report as “proof” that Harned’s
methodologies are generally accepted meteorological analytic procedures. Id.
Plaintiff then attempts to use Defendant’s rebuttal witness, Tim Marshall (“Marshall”), as
objective, independent validation of Harned’s methodology by asserting that “Tim Marshall’s
Harned also purports to have reconstructed rainfall amounts at the Property between March 28 and April 14, 2014.
Pl.’s Resp. Ex. “C.” However, Harned again fails to provide objective, independent validation of this methodology
anywhere in his report.
Hagg Engineering recognizes Doppler Data as a reliable method for analyzing wind change” and
citing excerpts from a “Hagg Certified Inspector – Wind Damage Course Workbook.” Id. at 7.
While both Marshall and the workbook excerpts express that Doppler Data is a reliable method
for analyzing wind damage, neither Marshall nor the workbook discuss how wind speeds at a
specific location can be extrapolated from wind speeds taken at another location by using the
Doppler Weather Radar. In fact, Marshall directly contests this by noting that “there is no
known, scientific methodology to take single Doppler Weather Radar velocities and determine
wind speeds at specific locations on the ground.” Def.’s Mot. at 8.
Plaintiff also attempts to use its own expert witness, O’Leary, to provide objective,
independent validation of Harned’s methodologies. However, one must be an expert in a
particular field to offer opinions on the standards within that field. See Cleveland v. U.S., 457
F.3d 397, 404-05 (5th Cir. 2006). O’Leary is not a credentialed meteorologist or peer of Harned,
nor has Plaintiff designated O’Leary as a meteorologist. ECF No. 48. In fact, Plaintiff designated
O’Leary as “an expert in Technically Exhaustive Property Condition Assessments, also known
as Field Engineering.” Id. While extensively educated in the field of engineering, O’Leary has no
meteorological education or training.6 Thus, because O’Leary lacks the credentials and
qualifications to be qualified as an expert in meteorology, he cannot verify or validate whether
Harned’s methodologies are standard in the meteorological field. Because Plaintiff fails to
provide objective, independent validation of Harned’s methodology, Plaintiff fails to meet its
burden to show that Harned’s methodologies, and resulting opinions, are reliable.
O’Leary’s formal education consists of a General Engineering Degree from Miss. Gulf Coast College in
1967 and a Bachelor’s Degree in Mechanical Engineering and Architecture from Miss. State University in
1972. ECF. No. 48 Ex. “A.” O’Leary’s technical training includes HAAG Engineering certified Inspector
Licenses, Roofing Consultants Institute Seminars, Building Envelop Science Institute and Damage
Assessment Schools, Field Training and Related Academics regarding: (1) roof systems; (2) metal
buildings; (3) mold and moisture assessment; (4) concrete foundations and structures; and (5) synthetic
and cement plaster and masonry construction. Id.
In addition, Plaintiff fails to establish the reliability of Harned’s opinions according to the
factors listed in Daubert.7 In Daubert, the Court offered a non-exclusive list of factors to
consider, including whether the relied upon theory or technique: (1) has been or can be tested;
(2) has been subject to peer review and publication; (3) has a known or potential rate of error;
and (4) is generally accepted within the relevant community. Daubert, 509 U.S. at 592-95. The
party offering the testimony bears the burden of establishing its reliability by a preponderance of
the evidence. See Daubert, 509 U.S. at 592 n.10; Bourjay v. U.S., 483 U.S. 171, 171 (1987).
Having carefully reviewed all exhibits and considering the arguments of both parties, the
Court finds that Plaintiff’s position is unpersuasive because there is no evidence Harned’s
methods have ever been tested, submitted for peer review, or are generally accepted within the
meteorological community. Plaintiff has failed to offer any studies to support Harned’s
methodologies. Plaintiff has also not shown if Harned’s methods have been tested or peer
reviewed, nor has Plaintiff shown that Harned’s methods have an error rate. Additionally,
Plaintiff’s only support for its assertion that Harned’s methods are generally accepted in the
meteorological community is Harned’s own assurances.8
Finally, Harned offers no method or calculation for how he determined the appropriate
amount to increase the wind gust speed taken at the airport to the maximum wind gust speed he
Parties fail to cite any case law from the Fifth Circuit (or any circuit for that matter) showing that
Harned’s method of determining wind speeds at specific locations using Doppler radar is deemed reliable
within the meteorological field. After conducting independent research on the matter, the undersigned
finds that while there are some cases within the Fifth Circuit that condone Harned’s methodology, said
cases did not expressly apply the Daubert factors as laid out by the Supreme Court. See Medical Plaza,
LLC v. U.S. Fidelity and Guar. Co., No. 1:07CV098 LTS-RHW, 2008 WL 4539587 (S.D. Miss. Oct. 7,
2008); see also Bossier v. State Farm Fire and Cas. Co., No. 1:08CV408LTS-RHW, 2009 WL 3271880
(S.D. Miss. Oct. 9, 2009). Although considered by the Court, the Court finds the analysis behind these
An expert’s assurances that he has utilized generally accepted methodology is insufficient to satisfy the
requirement for objective, independent validation of the expert’s methodology. Moore, 151 F.3d at 276.
determined for the Property. Simply put, Plaintiff fails to meet its burden to show that Harned’s
opinions are reliable. Because Plaintiff fails to: (1) show objective, independent validation of
Harned’s methods; and (2) fails to show that Harned’s methods meet any of the factors outlined
in Daubert for determining the reliability of an expert’s opinion, the undersigned finds that
Harned’s methods are unreliable.
B. Reliability of O’Leary’s and Smith’s Expert Testimonies
Defendant argues that O’Leary’s and Smith’s testimonies are, in part, not based on
sufficient facts and data under Rule 702. Def.’s Mot. at 11. Defendant argues that because
Harned’s opinions are unreliable, any opinions by O’Leary and Smith that rely on Harned’s
opinions are also unreliable. Def.’s Mot. at 11. Under Rule 702, an expert may only testify if the
testimony is based on sufficient facts or data. Fed. R. Evid. 702. The party seeking to introduce
the expert testimony bears the burden of proving by a preponderance that the proffered testimony
satisfies the Rule 702 test, including that the conclusions were based on sufficient facts or data.
Mathis, 302 F.3d at 461-62. If the foundational data underlying opinion testimony is unreliable,
an expert will not be permitted to base an opinion on that data because any opinion from that
data is likewise unreliable. Timoschuk v. Daimler Trucks N. Am., LLC, No. SA-12-CV-816-XR,
2014 WL 1533789 at *3 (W.D. Tex. June 4, 2014) (citing Allen v. Pa. Eng’g Corp., 102 F.3d
194, 199 (5th Cir. 1996)). Because Harned’s opinions are unreliable, any opinions made by
O’Leary and Smith based on Harned’s opinions are likewise unreliable. Therefore, any testimony
from O’Leary and Smith based on Harned’s opinions is inadmissible and excluded.
Plaintiff fails to: (1) provide objective, independent validation of Harned’s methodology;
and (2) show that Harned’s methods meet any of the factors outlined in Daubert for determining
the reliability of an expert’s opinion. Therefore, Plaintiff fails to meet its burden to show that
Harned’s methodologies, and resulting opinions, are reliable. Additionally, because Harned’s
opinions are unreliable, any opinions made by O’Leary and Smith based on Harned’s opinions
are likewise unreliable. Thus, any testimony from O’Leary and Smith based on Harned’s
opinions is inadmissible and excluded.
It is therefore ORDERED that Defendant’s Motion to Limit Testimony of Plaintiff’s
Experts Lewis O’Leary and Daniel Smith (ECF No. 50) is GRANTED, consistent with the
Order and findings set forth herein.
SIGNED June 28, 2017.
JEFFREY C. MANSKE
UNITED STATES MAGISTRATE JUDGE
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