Raiford et al v. National Hills Exchange, LLC et al, No. 1:2011cv00152 - Document 238 (S.D. Ga. 2016)
Court Description: ORDER granting Plaintiffs' 183 , 185 , and 186 Daubert Motions to exclude expert opinion testimony offered by Defendants James Timberlake and Richard Swope and attorney Jack Paller; denying the motions to the extent Plaintiffs' motions address lay opinion testimony under Rule 701; and determining, accordingly, that Timberlake, Swope, and Paller will be permitted to give opinion testimony, but not as experts. Signed by Judge J. Randal Hall on 5/17/2016. (jah)
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Raiford et al v. National Hills Exchange, LLC et al Doc. 238 IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF GEORGIA AUGUSTA J. WAYNE RAIFORD and B, T & R ENTERPRISES, LLC, DIVISION * * * * Plaintiffs, * v, * NATIONAL HILLS EXHANGE, LLC; SNELLVILLE CORSSING, LLC; * RICHARD D. SWOPE; RONALD J. DeTHOMAS; JAMES S. TIMBERLAKE; THOMAS L. ABERNATHY; and * * * STEVEN E. GAUNTLEY, l:ll-cv-152 * • Defendants. * * * * ORDER Presently before the Court are Plaintiffs' Daubert motions to exclude expert opinion testimony offered by Defendants James Timberlake and Richard Swope and attorney Jack Paller. 183, 185, 186.) (Docs. The Court GRANTS each of Plaintiffs' motions. I. FACTUAL BACKGROUND The Court's March 27, 2013 Order contains a factual summary of this case. On February 20, fact witnesses who Disclosures, Doc. experts, "may give 185.) 2015, Defendants expert opinions." disclosed six (Defs.' Expert Because Defendants did not retain these their disclosures were timely under Federal Rule of Dockets.Justia.com Civil Procedure 26(a)(2)(C). were Defendants Jack Paller. Jim Timberlake to and six disclosed witnesses Richard Swope Expert Disclosures 11 2-3, (Defs.' According Among the the disclosures, Timberlake and marketability in Georgia in 2010 and 2011, in 2010 and 2011, Center in 2010 for Georgia commercial and the value and 2011." (Id. and 2-3.) Swope "may estate values the difficulty of real estate projects of the National M attorney 6.) give opinion testimony concerning commercial real obtaining financing and Hills Timberlake Shopping and Swope base their opinions on their general real estate experience and "personal experience (Id.) for As involved with in with Paller, "the Electrolux according negotiations and 1 National Fresh to and Market disclosure, documentation for Center." National agreements Hills Shopping opinion testimony concerning the complexities of the and how satisfying those previous experiences." Plaintiffs moved contingencies terms and of the 183, 185, that Paller Electrolux lease conditions compared to his (Id.) to exclude Timberlake, from testifying as experts under Federal (Docs. states was "may give the disclosure of he (Id. to meet Defendants' the Shopping Center." negotiations 6.) Hills Swope, Paller Rule of Evidence 702. 186.) II. and LEGAL STANDARD Federal Rule of Evidence 702 provides that: 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 understand the help the evidence trier or to of fact 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 "As the of Supreme Pharms., the case. Court Inc., [509 recognized U.S. 579 in Daubert (1993)], contemplates that the district court will to the admission of v. Hurel-Dubois [expert] UK Ltd., testimony." 326 F.3d 1333, v. Rule Merrell 702 serve as plainly a gatekeeper Quiet Tech. 1340 Dow (11th DC-8, Cir. Inc. 2003). "The burden of laying the proper foundation for the admission of the expert testimony is on the party offering the expert, and admissibility must be shown by a preponderance of the evidence." Allison v. McGhan Med. Corp., 184 F.3d 1300, 1306 (11th Cir. 1999). The Eleventh Circuit has explained that district courts are to engage in a three-part inquiry to determine the admissibility of expert testimony under Rule 1340. 702. Quiet Tech., Specifically, the court must consider whether: 326 F.3d at (1) The expert is qualified to testify competently regarding the matters he intends to address; expert (2) the methodology by which the reaches sufficiently his reliable as conclusions determined by is the sort of inquiry mandated in Daubert; and (3) the testimony assists the trier of fact, through the application of scientific, technical, or specialized expertise, to understand fact Id. at evidence or to determine in issue. an expert knowledge, skill, Saw Chain, LLC v. 2008). A may be qualified Blount, witness's testify training, experience, to or education. Inc., 583 F. Supp. qualifications Co., 188 F.3d 709, 723 (7th Cir. due 2d 1293, must subject matter of his proffered testimony. Elec. a 1340-41. First, Ga. the to his Trilink 1304 correspond (N.D. to the See Jones v. Lincoln 1999). Second, In the testifying expert's opinions must be reliable. Daubert, the Supreme Court directed district courts faced with the proffer of expert testimony to conduct "a preliminary assessment the of testimony whether is the reasoning scientifically or methodology valid and of underlying whether that reasoning or methodology properly can be applied to the facts in issue." should tested; whether 509 U.S. consider: (2) at 592-93. (1) whether There are four factors that courts whether it has the been theory or technique subject to peer can review; be (3) the technique has a known or potential rate of error; and (4) whether the theory has attained general acceptance the relevant community. IcL at 593-94. "These factors in are illustrative, every case, important and in opinion." Cir. not in Thus, deciding determining whether Kumho Tire Co. v. Regardless "the in judge by will of be F.3d 1244, have how testimony 137, 152 known." learning or must Evid. expert 1262 to go is about reliable." validation the (11th "[p]roposed Daubert, how equally (1999). experience explain in - i.e., 509 U.S. a summary of a at grounded the expert's conclusion is 702, advisory committee's notes "'Presenting in considerable considered, appropriate apply proffered must factors is will "[t]he expert's testimony must be expert Fed. R. them case expert specific based on what accepted body of amendment). 387 particular supported in grounded." trial a of factors Frazier, be the other Carmichael,- 52 6 U.S. In most cases, and all reliability particular 590. field, v. the Agood grounds,' an cases of must not the United States in testimony some evaluating 2004) . leeway exhaustive; proffered so (2000 expert's testimony in the form of conclusory statements devoid of factual or analytical support proponent's burden. of Monroe Thus, Cty., neither nor his an is simply Cook ex rel. Fla., 402 expert's F.3d 1261. 1092, Moreover, 1113 qualifications accepted principles is sufficient. 1244 enough" to carry Estate of Tessier v. unexplained assurance that Inc., 401 F.3d 1233, not his and or her (11th the Sheriff Cir. experience 2005). alone opinions rely on McClain v. Metabolife Int'l, (11th Cir. 2005); Frazier, 387 F.3d at when analyzing a witness's reliability, courts must be careful methodology Daubert, rather 509 U.S. Third, decide a matters to Frazier, advance 387 the the expert's conclusions testimony must in beyond the logically than on principles that they generate. F.3d issue. assist Thus, the understanding of a material at average of Daubert, trier testimony the aspect 1262; the the 509 of help the at 591. trier fact must proponent's U.S. at to concern lay person and case. 591. Supreme Court has described this test as one of "fit." 509 U.S. and at 595. expert fact focus The Daubert, "Proffered expert testimony generally will not of the fact when lawyers for parties Frazier, it Plaintiffs Defendants Paller. Jim From seek to argue nothing more Defendants' closing arguments." DISCUSSION exclude Timberlake in than what 387 F.3d at 1262-63. III. can offers and expert Richard disclosure, opinion Swope it and testimony from attorney Jack appears they expect Timberlake, Swope, and Paller to each testify as fact witnesses and as expert opinion witnesses. Plaintiffs' motions initially focused on excluding their expert testimony under Rule 702. In their to reply briefs, Plaintiffs broadened their arguments exclude the opinion testimony altogether under Rule 701 as well. The Court addresses each argument in turn. A. Opinion Testimony of Jim Timberlake Defendants opinion values testimony on three and marketability difficulty estate indicate that Defendant Jim Timberlake may give of in obtaining projects in topics: Georgia financing 2010 (1) and commercial in for 2011; 2010 and 2011; 1 2.) More (3) value and market for featured commercial "a detrimental (Defs.' 201 of number to Opp. at 6.)) Defendants, worth sale." of Doc. 194 the and no (Id. more at 5.) will than Expert intends difficult" and which presumably was 3 real at in Georgia. testify to the real 4.) testify Plaintiffs estate (quoting Timberlake $8,000,000 Finally, that at estate "the the Dep., in Georgia according shopping time Doc. difficulty of the to center forced challenge the admissibility of 702 for being unhelpful to the not knowledge, specialized the "very these opinions under Rule based on to was commercial (Id. Timberlake the during 2010 and 2011, Timberlake will 2011. real of (Defs.' Timberlake commercial at for the failures," bank financing 2010 estate of Second, obtaining during was Br., real value the First, (2) commercial specifically, offer the following opinions. estate Georgia National Hills Shopping Center in 2010 and 2011. Disclosures real and not based on jury, reliable methods. Timberlake's values first opinion concerns and marketability in Georgia his deposition, in 2010 Timberlake testified that 7 commercial and in 2010 real 2011. estate During and 2011 the commercial real estate market was a "number point of bank did Timberlake any scientific, form failures." this facts Dep. at or data 6.) he At no relied on or technical or specialized knowledge he applied to is transcript. (Timberlake explain the opinion. methodology "very difficult" and included Further, evident These from the the lack face opinions, therefore, topic, Defendants of of fail any his to reliable deposition satisfy Rule 702. On the particular second opinion that Timberlake do intends Court's review of Timberlake's deposition, not to point give. to a From the he does not appear to have an expert opinion on the difficulty in obtaining financing. Mr. Timberlake does, however, difficulty securing financing Hills during 2011. 70-71.) These speak at length regarding to fund improvements at National (Timberlake Dep. at 12-14, 18-19, 24, 39-40, opinions are based on Timberlake's involvement with National Hills Exchange, LLC reliably therefore applied the methodology, and are personal ("NHX") and not a the proper subject of lay opinion testimony under Rule 701 and not expert testimony under Rule 702. Finally, Defendants disclosed that Timberlake has an opinion concerning the value of National Hills at the time of the short sale in April 2011. The exact contents of Timberlake's opinion were the cause of some confusion during his deposition. Plaintiffs' counsel repeatedly asked Timberlake what his opinion was as time of the short sale, litigation. (E.g., to the value of National Hills at the and at other occasions relevant to this Timberlake Dep. at 27-28, 40-41.) Each time Timberlake declined to give an opinion and suggested that he needed to consult the property's net operating income and capitalization rates among other documents before he could form one. (Id.) After some confusion concerning when Timberlake prepared to give an opinion on National Hills' 60), Defense opinion when it as counsel to was continued, stated maximum values sold to an opinion that (Id. that "[Timberlake] of the time can in April at give 61.) his of 2011 60.) He ... is going to testify [that] at be (id. at 59- Dep. (Timberlake [National Hills] certain amount." - as Harrell." "[Timberlake] correctly that value would he has had a value no greater than a Plaintiffs' "[Timberlake] said counsel responded - ... he has no idea without having all the cap rates and all the leases and all that information." Plaintiffs' (Id.) After this short detour, Timberlake counsel had the following exchange: Q: Do you have any opinion as to the value on the day you sold - the day that National Hills Exchange sold to Richard Harrell, which is, A: for I believe, April of 2011? [M]y opinion the number is that we sold it to him that the given market circumstances. market dictated and Q: The sales price was $8,000,000; is that correct? A: I think that's right. Q: So your opinion is it had a value as that time of $8,000,000? of A: That's what the appraisal said. I mean, personally I felt like it had a lot more potentially; but we didn't have the leases to do it, so - to take the value up. Q: Do you have an opinion today as to the valuation of National Hills Shopping Center during that time period? Either you do or you don't. A: I have an opinion that we sold the property [to] Richard Harrell for what I thought was a market driven number at the time we sold it to him. Was I happy with it, no. Would I have liked to have seen it higher so that we could have had less of a deficiency, yes. But did we get offers higher than that, no. (Timberlake Dep. cites these at 61-62, statements 66.) as In their brief, support for Defense counsel Timberlake's supposed opinion that National Hills was worth "no more than $8,000,000" in April 2011. As an (Defs.' Opp. Br., initial National Hills was matter, Doc. 194 at 5-6.) Timberlake never testified worth "no more than $8,000,000." Timberlake twice denied possessing an opinion on National Hills' April 2011. confusion, opinion, sold the (Timberlake and after Dep. Defense at 28, counsel 40-41.) explained that value After in some Timberlake's Timberlake reluctantly embraced it, stating that " [NHX] property [to Richard 10 Harrell for what [Timberlake] thought was Because, as a market a matter of for $8,000,000, fact, an $8,000,000. value (Id. at in But excess 41.) cap rates . . . the earlier of in the 66.) to or perhaps consult whether an Plaintiffs' net among opinion that 8,000,000?" that point." operating other below "would have to look at the income stream at rates more "did you think the shopping center had 8,000,000 and look at capitalization skeptical at worth no deposition, Timberlake replied that he have (Id. property was Given Timberlake's earlier assertion that to would ." NHX sold the property to Harrell opinion that counsel asked Timberlake, a number Defendants interpret this statement to mean that Timberlake has than driven form an opinion he income documents, National (Id.) figures the Hills and Court was is worth no more than $8,000,000 can even be attributed to him. Assuming that Timberlake has such an opinion, does not use any technical or specialized knowledge to arrive at it. To the extent Timberlake explains any method, value of a property purchaser paid for suggests, but never National Hills at at it. the Applying fully the time time of is not and, moreover, based on it is that the market sale this states, is method that the because that is the price Harrell, "method" of the short via NHEP, technical or he simply here, market sale was what Timberlake value This knowledge, is not beyond the comprehension of a juror. 11 of $8,000,000 paid for it. specialized its Elsewhere, Timberlake suggests that National Hills' value was $8,000,000 in April 2011 because that is what an appraisal said. (Id. at 62.) Timberlake is only relaying the appraiser's expert opinion and not giving his own. Moreover, Timberlake may not agree with the appraiser's view. is "what like the appraisal [National Hills] said," had a but that lot more [they] didn't have the leases to up." (Id. ) Arguably, He stated that $8,000,000 do [value] it, Timberlake is the account for the possibility of so [he] felt potentially; but - to take the value stating his view that the appraiser underestimated National Hills' to "personally market value by failing leasing more retail space in furture. As value, the to applied above the show, extent methodology knowledge. his he that Rather, his has opinion one, familiarity with prior appraisals, market conditions. Accordingly, opinion testimony under 701, under is utilizes opinion regarding not based technical is National based on or on a Hills' reliably specialized his National Hills' personal tenants, and it is the proper subject of lay but not expert opinion testimony 702. Timberlake may have opinion testimony on each of the three topics discussed above. To the extent those opinions exist, they are based on his perspective as a key figure in this case, see Federal application Rule of of Evidence "scientific, 701(a), technical, 12 and or do not other involve the specialized knowledge." Fed. R. Evid. 702(a). the proper subject of lay, Plaintiffs' an expert proper The opinions not expert, testimony. motion to exclude Jim Timberlake (Doc. 195) foundation is at GRANTED. trial, are therefore from testifying as Assuming Timberlake Accordingly, Defendants will be lay allowed a to testify to his opinions on these topics as a lay witness. B. Opinion Testimony of Richard Swope Defendants also indicate that Richard Swope may give expert opinion testimony on the same three (Defs.' Expert Disclosures 1 3. ) topics as Timberlake. As with Timberlake, Plaintiffs challenge the admissibility of these opinions under Rule 702 as being unhelpful to the jury, not based on specialized knowledge, and not based on reliable methods. On the first topic, Swope intends to testify to his opinion that "commercial real estate values and marketability in Georgia were ^severely depressed' real estate Swope that crisis." Dep., Doc. lending "[o]nly in time." (Swope Dep. that Swope approximately (Defs.' Opp. (Defs.' come cases will to Doc. Br., virtual Finally, that at as Doc. loans being at 40.) opine and 2011 the 192 at 4.) 13 a result 192 Additionally, a were $8,000,000 Br., Opp. 200 at 49.)) "had rare in 2010 3 Swope made for National of Hills the the (quoting will standstill," Defendants' time at of and opine that a period of brief asserts was forced "worth sale." The estate Court values begins and with Swope's marketability. opinion During concerning Swope's real deposition, Defense counsel asked Swope the following: Q: Speaking in general terms, based on your ownership in other properties in 2010 or 2011 or investigation of other potential acquisitions, was it your view that commercial real estate property values were good or were they [depressed] in the period of time of late 2010 and early 2011? A: (Swope They were severely [depressed]. Dep. at description of 49.) Defendants the method Swope used to the market was severely depressed. to analyze have real estate market not provided reach his Undoubtedly, conditions is any opinion that Swope's ability greater than the average person due to his professional experience in the field. However, his silence as to his methodology renders unreliable as expert testimony. Fed. R. Evid. his opinion 702(c). Swope's second opinion concerns the difficulty in obtaining financing for commercial real estate projects in Georgia during 2010 and 2011. In his deposition, Swope gave the testimony: I do have an opinion about the general economy. I do read the newspapers and I read multiple times that we were in the midst of great depression. the greatest recession since the I can speak specifically to the difficulty as to the real estate market at the time where lending had come to a virtual standstill. Only in rare cases were loans being made for a period of time. 14 following (Swope Dep. at 40 (emphasis added)). He also testified that, unlike with previous loans, Atlantic Bank required Swope to give a joint and several guaranty. of Swope's the above lending testimony concerning the shows, is Swope's devoid of knowledge and experience with NHX words, (Id. at 49.) his any appears availability of concerning technical to be and what opinion testimony and is opinion is the wholly read proper not appropriate as the methodology based he That is the extent in loans. standstill or on his of in specialized personal newspapers. subject As In lay other opinion expert testimony under Rule 702. Swope's value. third opinion Defendants assert Hills' market value sale. (Defs.' Opp. was Br., concerns that Swope $8,000,000 influence" repeatedly his denied National Hills' (Id. a reach National Hills. In 186) a in April proper See Fed. conclusion, because Hills' opine the that time of market National the short In direct questioning, that at "would inform" 46-69.) definite But opinion or Swope concerning valuation because he did not know the prevailing 2011. According to his own testimony, to at factors opinion. reaching capitalization rates data will Doc. 192 at 4. ) Swope testified concerning some "would National the Swope's Evid. Court Dep. at 7-9, 44.) Swope had insufficient facts or expert R. (Swope opinion 15 to the value of 702(b). GRANTS proffered as Plaintiffs' opinion motion testimony does (Doc. not satisfy the requirements of Federal Rule of Evidence 702. Swope will not be permitted to testify as an expert on these topics.1 C. Opinion Testimony of Jack Paller According "may give Defendants' opinion negotiations and how to to testimony concerning meet satisfying previous disclosure, the these experiences." contingencies terms and (Defs.' the of attorney Paller complexities the conditions Expert Jack of Electrolux lease compared to Disclosures the 1 his 6.) Plaintiffs argue that Paller is unqualified to give the opinions because his he legal lacks familiarity with the experience is unrelated to negotiations his and because proffered opinions. Upon reviewing Paller's deposition, the Court agrees. The first topic in Defendants' disclosure appears to address the complexity of the negotiations over the terms of the Electrolux Lease and the terms of the side agreements with Fresh Market and the Development Authority of Richmond County. Paller repeatedly explained that he did not negotiate the terms of the Electrolux package Lease, with the Fresh Market's Development concessions, Authority of or the Richmond bond County. 1 In their reply brief, Plaintiffs argued that Swope's opinion regarding the value of National Hills is also inadmissible as lay opinion testimony under Rule 701 because "he is not in possession of sufficient information to allow him to form an estimate of value, indeed specifically disclaimed Br., Doc. 203 at 2. ) At this is laid at trial, the Court regarding the value of National and having any [estimate]." (Pis.' Reply time, and assuming a proper foundation permits Swope to offer his opinion Hills as a lay witness. 16 (Paller Dep. as that of at 6-7, a 10, 12.) "scrivener" In general, who took the he described his role business terms that were negotiated by the parties and put them into "legalese." (Id. at 11, of 14.) Paller agreements with does counsel discuss for exchanging Electrolux representatives from Fresh Market. sharing of these agreed terms (Id. at drafts was and drafts the Paller part therefore Authority and But Paller is clear that the of translating into "legally enforceable documents 12.) the disclaimed the earlier and language." having an expert opinion concerning the complexity of the negotiations. Defendants the also argue that difficulty Defendants Lease's contingencies. Plaintiffs claim contingencies are that Paller's testimony will address faced (Defs.' whether business or in satisfying Opp. not matters Br., Doc. Defendants not the within Electrolux 193 would at 3.) meet Paller's the legal experience, therefore rendering Paller unqualified as an expert. (Pis.' to Exclude Paller, Mot. The Lease's Court Doc. 183, agrees with Plaintiffs. contingencies would or would Ex. 1.) Whether the not be Electrolux satisfied is ultimately a question of commercial real estate and not a matter of legal expertise. Accordingly, 17 the Court finds that Paller lacks the requisite expertise in commercial real estate to testify as an expert on this topic.2 To conclude, the Court GRANTS Defendants' Jack Paller from testifying as an expert. IV. As discussed motions. (Docs. above, 183, motion to exclude (Doc. 183.) CONCLUSION the 185, Court GRANTS 186.) To Plaintiffs' the extent Plaintiffs' motions address lay opinion testimony under Rule 701, DENIES the motions Swope, and Paller on will those be grounds. Accordingly, permitted to give opinion Daubert the Court Timberlake, testimony, but not as experts. ORDER ENTERED at Augusta, Georgia, this /rft^ day of May 2016. / HONORA^fEE J. RANDAL HALL UNITED STATES JOUTHERN DISTRICT JUDGE DISTRICT OF GEORGIA 2 Defendants' disclosure suggests that Paller will compare the difficulty of satisfying these contingencies with his previous experience. (Defs.' Expert Disclosures 1 6.) Paller could, for instance, discuss his previous experience with clients who were or were not able to satisfy similar contingencies in leases he drafted. Testimony comparing the difficulty of satisfying these contingencies to past successes or failures would assist the jury and would be based only on Paller's first-hand experience as his clients' attorney and not specialized knowledge in the commercial real estate field. Such testimony would be suitable as lay opinion testimony. See Fed. R. Evid. 701. 18
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