Category Archives: Working with Experts

USA legal system conceptual series - Illinois

Court Rejects Claim that Expert Failed to Determine a Business Valuation

Payroll Services by Extra Help, Inc. and Teresa Katubig sued Kimberlyn Haag in an Illinois state court. They asked the court to determine the value of Haag’s 25% shareholder interest in Payroll Services.

Pursuant to the shareholder agreement, Haag retained an expert who offered an opinion about the fair market value of the shares. Payroll Services and Katubig asked the court to reject the expert’s report on the ground that it was a “calculation” and not a “valuation.”

After the report was revised, and against Payroll Services’ objection that the expert merely changed the report’s title, the court decided that the expert’s opinion did, in fact, constitute a valuation. An appellate court agreed with that decision.

Facts of the Case

Katubig was the president of Payroll Services. Haag was an employee. Katubig and Haag entered into a shareholder agreement that gave Katubig 75% ownership and Haag 25% ownership of the business. Payroll Services later fired Haag and exercised its option to purchase her shares.

The shareholder agreement allowed the parties to agree upon a business valuation company and to abide by its determination of the business value. In the absence of agreement, it allowed each party to retain a business valuation company. In that event, the purchase price for the shares would be based on an average of the two valuations.

Payroll Services hired the Anders firm to prepare a valuation of the company. Haag hired Kemper Group to prepare a valuation.

An accountant employed by the Anders firm opined that Haag’s shares were worth nothing. That accountant referred to his analysis as a “valuation engagement.”

An accountant employed by the Kemper Group opined that Haag’s shares were worth $587,000. That accountant referred to her analysis as a “calculation engagement.” The accountant explained that a calculation engagement is based on a methodology defined by the accountant’s client and may differ significantly from a valuation engagement.

Haag requested payment of the average of the two values. Payroll Services objected, contending that a “calculation” is not the “valuation” required by the shareholder agreement. Payroll Services filed suit, asking the court to declare that it owed Haag nothing.

Expert Testimony

Haag argued that the shareholder agreement did not define the term “valuation.” In her view, the agreement did not require a “valuation engagement” and did not prohibit a “calculation engagement.”

Payroll Services countered that “valuation” is a term of art that is defined by the American Institute of Certified Public Accountants (AICPA). The AICPA’s Statement on Standards for Valuation Services, however, defines valuation as the process of determining the value of a business.

The AICPA statement describes both a valuation engagement and a calculation engagement while noting that a valuation engagement results in a “conclusion of value” while a calculation engagement results in a “calculation of value.” Whether to use a valuation engagement or a calculation engagement is decided by the accountant’s client.

The Anders accountant testified that business valuations can be prepared by using an asset approach, a market approach, an income approach, or a hybrid of those methods. Which method to use was a matter of professional judgment.

The Anders accountant noted that Payroll Services was in debt because it had recently purchased some other companies. Since the debt exceeded the company’s equity value, the accountant employed an income stream approach to decide that the shares had no market value.

The Kemper accountant testified that she could not prepare a valuation engagement because Payroll Services refused to provide the financial information that she needed. She therefore agreed with Haag to prepare a calculation engagement.

The Kemper accountant used the comparable company approach to valuation. She considered the price that Payroll Services had paid to acquire similar companies. Her valuation was based on that comparison.

The Kemper accountant testified that a valuation engagement should consider the economic reality of the company. She did not believe that the Anders accountant’s valuation reflected that reality because the stock of an ongoing enterprise that is regularly acquiring competing companies is probably not worthless.

Trial Court Decision

The court initially decided that Haag’s expert did not make a sufficient “valuation” as that term is used in the business valuation industry. Given the parties’ dispute as to whether the shareholder agreement required the term “valuation” to be defined by industry standards, as well as the dispute as to whether a calculation engagement satisfies the industry standard for valuations, the court granted Haag leave to file a new expert report.

Haag’s expert then prepared a “full valuation.” Payroll Services objected that the full valuation used the same methodology as the calculation engagement and arrived at the same conclusion. Payroll Services asked the court to reject the report because it was little more than the former report with a new title.

Haag’s expert explained that she conducted new research and calculated a book value in preparing her new report. The new information she received persuaded her that comparing Payroll Services to recent purchase prices of comparable companies would yield that most realistic valuation. She also explained that she rejected the income stream analysis relied upon by Payroll Services’ expert because the company’s acquisition of new businesses created debt that made the income stream an unrealistic measure of the company’s value.

The trial court determined that Haag’s new expert report met the definition of “valuation” as it was used in the business valuation industry. It accordingly admitted the report and awarded Haag the average of the two competing valuations.

Appellate Opinion

Competing methods for valuing property can yield dramatically different conclusions. In many cases, a judge or jury will decide which of two competing methods arrived at the most accurate result.

In this case, however, the judge merely needed to decide whether each expert produced a “valuation” as required by the shareholder’s agreement. If they did, the judge’s role was limited to calculating the average of the two valuations.

The appellate court rejected the trial court’s initial decision that a calculation engagement is not a valuation. The court noted that the shareholder agreement did not specify the means by which a valuation was to be made. The AICPA recognizes that both engagements are valuations and leaves it to the accountant and the client to determine which engagement to use.

The appellate court also rejected the holding that the term “valuation” should be defined according to business valuation industry standards. Since the parties did not adopt a particular definition of “valuation,” the court gave the term its ordinary meaning: an estimation of worth, especially one that is made by a professional. Regardless of its label, Haag’s expert prepared a valuation that met that definition.

Haag’s only obligation was to retain an expert to prepare a business valuation. She did so. The shareholder agreement left no room for the courts to decide which expert prepared a better valuation. Since both parties obtained valuations prepared by business valuation experts, the appellate court affirmed the trial court’s decision to award the average of those two valuations to Haag.

 

Mesothelioma

Court Denies Daubert Challenges to Expert Opinions About Asbestos Exposure in a Shipyard

John Wineland died from mesothelioma. Wineland’s personal representative sued Todd Shipyard and other defendants for negligently exposing Wineland to asbestos during Wineland’s service in the Navy.

Todd Shipyard filed a Daubert motion to exclude the testimony of four expert witnesses. Recognizing that the shipyard’s arguments addressed questions of credibility that should be decided by a jury, the court determined that the opinions of each expert were admissible.

Capt. Arnold Moore

Captain Moore was offered as an expert on “maintenance practices and conditions aboard Navy ships.” He has professional experience with “naval warships and their machinery, the operation and maintenance of steam propulsion plants, the repair and overhaul of Navy ships, [and] the role of Enginemen aboard naval ships.”

Moore reviewed personnel records regarding Wineland’s naval service, including records of his assignment to the engine room of the USS Tuscaloosa. That ship was overhauled at Todd Shipyard during Wineland’s service. Wineland devoted extensive time to preparing for and overseeing the overhaul.

Moore determined that the diesel engines and heated systems on the Tuscaloosa were insulated with asbestos. Records showed that Wineland frequently visited spaces where Todd Shipyard workers were performing repairs on the Tuscaloosa to observe the repairs and to inspect the repaired equipment.

Moore opined that removal and replacement of gaskets during the overhaul would have produced airborne asbestos fibers. He concluded that Wineland was likely exposed to asbestos dust while the ship was being overhauled at Todd Shipyard.

Todd Shipyard objected that Moore explained the basis for his opinions in insufficient detail. The shipyard noted that Moore identified no witnesses who actually saw Wineland performing the duties that Moore described.

The court decided that Moore’s methodology was reliable. In light of his experience and knowledge of the duties Enginemen, Moore’s review of records allowed him to determine the work that Wineland did while the ship was docked at Todd Shipyard. He did not need eyewitness accounts to understand that Wineland did the kind of work that exposes Enginemen to asbestos. Because his opinions had a reliable basis and would be helpful to the jury, the court denied the Daubert motion as to Moore.

Steven Paskal

Paskal is a certified industrial hygienist. His testimony was offered to explain “how asbestos reacts when released into the air, the risks it poses to human health, and how to mitigate those risks.” Paskal also expressed the opinion that Wineland was exposed to asbestos during his naval service and that work practices in shipyards during Wineland’s service were not designed to minimize exposure to asbestos particles.

Paskal based his opinions on his own experience as an industrial hygienist for the Navy and on his review of Moore’s reports. Todd Shipyard objected that Paskal had no factual basis for his opinions because he did not know the frequency, intensity, or duration of Wineland’s asbestos exposure at Todd Shipyard.

The court was unimpressed with the objection. Paskal was entitled to rely on Moore’s conclusion that Wineland was exposed to asbestos when gaskets and packing were removed and replaced. Moore’s review of maintenance and personnel records satisfied him that Wineland was frequently present when asbestos was released into the air. Details about the intensity and duration of those exposures were not necessary to the conclusion that Wineland was, in fact, exposed to asbestos. Paskal therefore had a factual basis for his opinions.

Paskal’s own training and experience allowed him to determine that each exposure to asbestos was “a million times greater” than Wineland would otherwise have experienced. He also offered the noncontroversial opinion that each exposure contributes to the risk of developing mesothelioma.

Todd Shipyard nevertheless complained that Paskal did not know how much cumulative exposure Wineland received at the shipyard. Apparently recognizing that a cumulative exposure rate was not necessary to his opinion, Todd Shipyard argued in a reply brief that Paskal had insufficient evidence of exposure to support an opinion that Wineland’s exposure at the shipyard was a substantial factor in the development of his mesothelioma.

While Ninth Circuit precedent requires evidence that asbestos exposure was sufficiently significant to contribute to mesothelioma, the court was satisfied that Moore’s opinion supplied a factual basis for Paskal’s opinion. Moore determined the length of time that the ship was docked in the shipyard and the approximate frequency with which Wineland supervised and inspected work during the overhaul. That testimony provided an underpinning for Paskal’s causation opinion.

Dr. David Zhang

Dr. Zhang is a physician who practices occupational medicine. In his opinion, Wineland suffered from asbestos-related pleural malignant mesothelioma. Todd Shipyard argued that Dr. Zhang had no factual basis for his opinion that Wineland was exposed to asbestos or that the asbestos caused his cancer.

The court easily dismissed that challenge. Moore and Paskal provided the factual basis for the conclusion that Wineland was exposed to asbestos. Since asbestos exposure is the only known cause of mesothelioma, the conclusion that asbestos exposure harmed Wineland is inescapable.

Charles Ay

Charles Ay is an asbestos consultant. He worked as an asbestos insulator in the shipyard industry for twenty years, then began a career in asbestos detection, testing, and abatement. He expressed opinions about the presence of asbestos in pipe insulation during the 1970s, the consistent methods used to remove pipe insulation in a variety of industries during the 1970s, and the concentrations of asbestos fibers that are present when insulation is removed from pipes.

Ay’s testimony was obviously relevant. Todd Shipyard challenged it on the ground that Ay never worked at Todd Shipyard. The notion that “only our employees can testify against us” is not supported by precedent. Ay had experience in shipyards. Todd Shipyard offered no reason to believe that its asbestos removal procedures were different than those in other shipyards. At best, Todd Shipyard’s objections went to the weight a jury might give to Ay’s testimony, not to its admissibility.

 

Criminal Forensics, word cloud concept 11

New Paper Condemns Failure to Establish Reliable Error Rates in Forensic Science

“Junk science” has been the rallying cry of lobbyists for the insurance and pharmaceutical industries. The term has largely been used to condemn expert evidence offered by plaintiffs in civil suits. While the claims that plaintiffs base cases on “junk science” have been largely overblown — the claims are intended, after all, to minimize the opportunity of juries to evaluate evidence of corporate negligence — there were a few well-publicized cases in which bad science may have influenced verdicts in civil cases. The Daubert revolution was a judicial and legislative response to those cases.

Since outrage about junk science has been carefully nurtured by corporate lobbyists, it has focused on expert evidence presented by plaintiff’s lawyers in civil cases. The outraged attacks upon experts tend to overlook questionable science that is funded by and relied upon by industries and their insurers to avoid liability.

Until recently, even less attention was paid to junk science advanced by prosecutors in criminal cases. If Daubert has value, judges should apply it consistently to all expert evidence, regardless of the side that offers it and regardless of whether the evidence is offered in a civil or criminal case. Yet judges routinely allow prosecutors to present testimony by forensic scientists that unbiased experts recognize as junk science.

Forensic Science Reliability

Slate recently called attention to a scientific paper that it deemed worthy of greater media attention. The paper (Misuse of Scientific Measurements in Forensic Science by Itiel Dror and Nicholas Scurich) discusses error rates in forensic science.

Error rates are a poorly understood factor in the application of the Daubert standard. Daubert demands that experts employ reliable scientific methodologies. A methodology that has a high error rate should generally be rejected as unreliable. While it is easy to understand that the reliability of a methodology is a function of how often the methodology produces an accurate result, the measurement of error rates to validate a methodology is less intuitive.

Dror and Scurich point out that the error rate for many forensic science methodologies is unknown. Crime lab employees often cover up that deficiency by claiming complete confidence in their results. Confidence, however, is not a substitute for science.

Fingerprint examiners, for example, often tell juries that the science of fingerprint comparison is infallible. As Dror and Scurich explain, there is no such thing as an error rate of “zero,” despite improper testimony to that effect. In fact, they cite a study demonstrating that the same expert comparing the same fingerprints on two separate occasions will reach a different result about 10% of the time.

Well prepared defense attorneys may be able to counter claims that fingerprint comparison is infallible with examples of mistaken fingerprint identifications that police agencies have relied upon in the past. The question, however, is whether the examiner should be permitted to testify at all — and whether a defendant should be placed at risk of a wrongful conviction — if the examiner can’t cite an error rate to prove that identifications are nearly always reliable.

Dror and Scurich lament that judges have often admitted the opinions of forensic science experts who rely on methodologies that “have no properly established error rates and even when experts have implausibly claimed that the error rate is zero.” How can a judge regard a methodology as reliable when the judge has no idea how often the methodology returns an erroneous result?

Error Rate Determinations in Forensic Science

Dror and Scurich argue that forensic sciences have difficulty measuring an accurate error rate because they classify opinions that a methodology returned an “inconclusive” result as correct. Rendering the opinion that a comparison is inconclusive does not mean that the opinion is correct.

Assume, for example, that nine of ten fingerprint examiners exclude the defendant as the source of a fingerprint on a pane of glass. If the tenth examiner testifies that the comparison is “inconclusive,” the examiner is likely wrong. Yet that incorrect opinion will be deemed “correct” in an analysis of error rates.

Crime lab employees too often have a bias in favor of prosecutors and police officers who are hoping for a particular result. When they know the police are hoping for a ballistics match that they cannot find, they may decide that the comparison is “inconclusive” to avoid damaging the prosecution’s case. If no match can be made, the opinion is wrong.

Since “inconclusive” results are not reflected in forensic science error rates, error rate computations by forensic scientists are skewed toward making the methodology seem more reliable than it actually is. As Dror and Scurich argue, “not ever counting inconclusive decisions as error is conceptually flawed and has practical negative consequences, such as misrepresenting error rate estimates in court which are artificially low and inaccurate.”

Lessons Learned

Defense attorneys should consider Daubert challenges whenever a prosecution is based on the testimony of a forensic scientist. The failure to rely on a methodology with an acceptable error rate may be a fruitful basis for challenging the admissibility of an expert opinion. Defense lawyers should also consider retaining their own expert for the purpose of educating the judge or jury about the danger of relying on error rates that count “inconclusive” results as if they are always accurate results.

Expert Allowed to Testify About Standard of Care Despite His Belief that the Standard Is Mythical

Pamela Scholl underwent lumbar fusion surgery in Indiana. Scholl alleged that the surgeon, Dr. Mohammed Majd, placed a screw too close to an iliac artery, causing nerve damage. She later had a second corrective surgery.

Scholl sued Dr. Majd for malpractice. Indiana law requires complaints of medical malpractice to be submitted to a medical review panel. The medical and insurance industries view those panels as discouraging malpractice lawsuits that have no merit. Plaintiffs’ lawyers regard panel members as having a pro-doctor bias and typically view them as an obstacle that adds a layer of delay and expense that is meant to benefit doctors and their insurers.

The panel concluded that Dr. Majd did not breach the applicable standard of care. Scholl then filed suit. She relied on the expert testimony of Dr. Robert Sexton to prove her claim.

After Scholl rested her case, Dr. Majd moved to dismiss on the ground that Dr. Sexton’s testimony failed to establish that Dr. Sexton was familiar with the applicable standard of care. That motion was based on Dr. Sexton’s testimony that the standard of care is whatever a physician thinks it is. Scholl appealed from the trial court’s decision to grant that motion.

Dr. Sexton’s Testimony

Dr. Sexton is a board-eligible neurosurgeon who has performed more than 12,000 spine surgeries during his career, including 150 fusions. Dr. Sexton retired from surgical practice but maintains an active medical license and complies with continuing medical education requirements.

A medical review panel determined that Dr. Majd’s surgery did not fall below the standard of care. Dr. Sexton testified that he disagreed with that conclusion. When he was asked about the panel’s findings, Dr. Sexton referred to the panel’s reliance on a “mythical” standard of care.

Dr. Sexton explained that there is no published standard of care. The review panel defined the standard of care generically as “what a reasonably skilled doctor . . . would do in a given situation.” Dr. Sexton suggested that the generic definition does not identify specific things a doctor should do but leaves it up to each doctor to invent his or her own standard of care.

Dr. Sexton testified that Dr. Majd’s surgery fell below the standard of care because his workup of Scholl before the surgery was “sparse.” He opined that a prudent spine surgeon would have performed a bone density test before deciding whether a spinal fusion was appropriate. He also testified that using a spinal fusion to correct Scholl’s condition as “very controversial.”

Dr. Sexton concluded that placing a screw too close to Scholl’s iliac artery caused her injury. He testified that the standard of care required a surgeon in Dr. Majd’s position to do one of two things: perform a bone graft without using screws or perform a decompressive laminectomy as an alternative to spinal fusion.

When he was asked whether Dr. Majd’s decision to perform a spinal fusion using screws fell below the standard of care, Dr. Sexton replied, “Based on the outcome, yes, I think it was.” On cross-examination, Dr. Sexton repeated that “there is no such thing as a standard of care except what the individual doctor thinks it is.”

After Scholl rested her case, Dr. Majd moved for judgment on the basis that Dr. Sexton did not demonstrate a familiarity with the applicable standard of care. The court granted Dr. Majd’s motion. Scholl appealed.

Appellate Analysis

Indiana follows the customary rule that a medical standard of care and its breach must be established by an expert opinion. The question before the court was whether Dr. Sexton’s opinion adequately conveyed the standard of care to the jury.

The court noted that Dr. Sexton quoted a doctor from the medical review panel who stated that the standard of care is “what a reasonably skilled doctor with reasonably skilled training would do in a given situation.” That is a correct paraphrasing of the standard of care. The fact that Dr. Sexton referred to it demonstrated his familiarity with the standard. His criticism that the standard is mythical in the abstract did not alter his understanding of the standard.

As the court noted, Dr. Sexton explained his reference to the “mythical” standard by noting that no textbook or other authoritative source clearly defines how a spinal surgeon should have treated Scholl’s condition. The court viewed his testimony as explaining that the standard of care was open to interpretation, as is often the case in medical malpractice lawsuits.

Of course, the abstract standard — doctors have a duty to do what reasonably skilled doctors would do — says nothing about what reasonably skilled doctors would do in a given situation. Dr. Sexton filled that gap by testifying that a prudent spine surgeon should perform a bone density test before surgery. He also testified that the standard of care required Dr. Majd to perform a laminectomy rather than a fusion with hardware, a procedure that would have eliminated the risk of causing the injury that resulted from placing a screw too close to the iliac artery.

Dr. Sexton’s extensive history as a spinal surgeon qualified him to express opinions about the applicable standard of care and its breach. The court held that Dr. Sexton’s characterization of the standard of review as “mythical” was “imprecise,” but those comments did not reveal a lack of understanding of the standard of care. The trial court accordingly erred by dismissing the lawsuit rather than submitting it to the jury.

Lessons Learned

The intersection of law and medicine can lead to collisions. Doctors think in terms of medical concepts. The standard of care is a legal concept. Dr. Sexton viewed the standard of care as “whatever a doctor thinks it is” because the medical panel used the language of the law to describe the standard.

What a reasonable doctor would do in a given situation is intended to be an objective standard but differing opinions of whether a doctor’s actions were “reasonable” reveal its subjective nature. Dr. Sexton identified the subjective nature of the standard of care when he defined the standard as whatever “a doctor thinks it is.”

Scholl’s case ended with a dismissal and an appeal because Dr. Sexton referred to the standard of care as “mythical.” That testimony honestly identified the difficulty of defining a precise standard that has not been identified in medical texts. Unfortunately, the testimony was also problematic. An expert’s reference to a legal standard as “mythical” is likely to wave a red flag in front of opposing counsel.

The case illustrates the need for plaintiffs’ lawyers to take the time to explain legal standards to expert witnesses and to caution experts not to editorialize about those standards. How the expert feels about a legal standard has no bearing on the case. The appeal could have been avoided if Dr. Sexton had simply testified that “the standard of care is what a reasonable spinal surgeon would do and, in my opinion, a reasonable spinal surgeon would have done the following.”

 

Court

Judge Rules Gender Equality Expert’s Opinion is Credible and Reliable

An Iowa federal judge has ruled that a gender equality expert’s opinion is both credible and reliable and has temporarily blocked the University of Iowa from cutting its women’s swimming and diving program.

The Dispute

On August 21, 2020, the University of Iowa announced its decision to eliminate women’s swimming and diving as a varsity intercollegiate sport for the 2021-22 academic year.  Six students, Sage Ohlensehlen, Christina Kaufman, Alexa Puccini, Kelsey Drake, Miranda Vermeer, and Abbie Lyman, who are female student-athletes on the women’s swimming and diving team were torn between remaining at the school and pursuing their athletic careers elsewhere.

The students filed a class-action lawsuit against the University of Iowa, its president, and its athletic director, claiming that the University failed to provide equal participation, equal treatment, and equal scholarship opportunities for female athletes as required under Title IX of the Education Amendments of 1972, 20 U.S.C. § 1681 et seq.

District Court

The students filed their lawsuit in the U.S. District Court for the Southern District of Iowa. On December 3, 2020, the plaintiffs filed a motion for a temporary restraining order and preliminary injunction.  The court denied emergency injunctive relief, but ordered that the matter proceed on an expedited basis.  The court reviewed each party’s written briefs, affidavits, and documentary evidence and held a hearing on the matter.

The Equity in Athletics Disclosure Act requires universities that receive federal funding to submit an annual report detailing the total number of full-time male and female undergraduate students enrolled at the university, the varsity intercollegiate athletic teams it sponsors, and the number of participants on each team on the date of that team’s first competition.

According to the information that the University provided in response to the Equity in Athletics Disclosure Act, the University of Iowa has been increasing its percentage of women undergraduate students over the past 10 years.  Currently, the University offers 24 intercollegiate athletic programs; 13 are women’s teams and 11 are men’s teams.

At issue is whether the University of Iowa will comply with Title IX after eliminating the women’s swimming and diving team alongside three men’s teams.  The students retained Dr. Donna Lopiano, Ph.D., to testify on their behalf.  Dr. Lopiano reviewed the participation data and compared it with University-sponsored website rosters and raw competition data and opined that she was confident to a high degree of certainty that women’s intercollegiate athletics at University of Iowa was likely to lack sufficient proportionality to female student enrollment.

The University dismissed Dr. Lopiano’s opinions as “unduly speculative” and characterized them as “conspiracy theories.”  The University made a motion that Dr. Lopiano’s opinions should be stricken from the record.

Upon review, U.S. District Court Judge Stephanie Rose determined that Dr. Lopiano was a highly credible expert and that her opinion was “exceedingly reliable.”  Judge Rose noted that Dr. Lopiano is a highly accomplished expert on gender equity in intercollegiate athletics and Title IX compliance.  Her opinion demonstrated that the students had a fair chance of demonstrating that the University is not in compliance with Title IX by providing its female athletes with athletic participation opportunities substantially proportionate to their representation in the student body.

Judge Rose granted the motion for a preliminary injunction, which prevents the University of Iowa from eliminating the women’s swimming and diving team or any other women’s intercollegiate athletic team until there is a full trial on the merits.

USA legal system conceptual series - Illinois

Illinois Supreme Court Permits Party to Redesignate a Controlled Expert as a Consulting Expert

The Supreme Court of Illinois recently reviewed a state appellate court decision that permitted a party to avoid disclosure of an expert report by redesignating the expert as a consulting expert rather than a testifying expert. The state supreme court affirmed the lower court’s decision.

Facts of the Case

Alexis Dameron sued Mercy Hospital and other medical defendants for malpractice after her femoral nerves were damaged during robotic surgery. In response to interrogatories, Dameron identified Dr. David Preston as a “controlled” expert witness. Dameron’s interrogatory answer stated that Dr. Preston would be performing certain tests on Dameron and would testify about the rest results.

Dr. Preston conducted the tests and prepared a report. A few weeks later, Dameron notified the defendants by email that she was withdrawing Dr. Preston as a controlled expert and redesignating him as a consulting expert. Dameron also declined to produce Dr. Preston’s report.

The defendants contended that Dr. Preston’s report was discoverable. Dameron filed a motion to designate Dr. Preston as a nontestifying consulting expert. Dameron claimed that Dr. Preston had been inadvertently identified as a controlled expert. The defendants, no doubt suspicious that Dameron was motivated to change the expert’s designation by displeasure with the expert’s opinion about the test results, resisted the motion.

The trial court denied the motion and ordered Dameron to produce Dr. Preston’s report. To create an appealable issue before a final judgment was entered, Dameron refused to comply and the court entered a “friendly” contempt order, which it stayed pending appeal.

Treating Physicians

As is common, Illinois law does not regard treating physicians as expert witnesses. Illinois recognizes that treating physicians use their expertise to provide medical treatment and share that expertise with juries when they testify about the treatment they rendered. They are, however, treated as fact witnesses who are not generally subject to the same rules that apply to retained experts.

The medical records and reports prepared by treating physicians are generally discoverable. Plaintiffs waive physician-patient privilege by starting a lawsuit that places their physical condition in issue.

The defendants argued that Dr. Preston was a treating physician because his testing of Dameron constituted treatment. The supreme court clarified that whether a doctor is a treating physician depends on the relationship between the doctor and patient, not on the substance of any testimony the doctor might give. Doctors who are retained primarily for the purpose of litigation are not treating physicians even if they conduct the same tests that a treating physician might conduct.

Dr. Preston was retained to provide opinions to assist Dameron in litigation. Dameron did not hire Dr. Preston to treat her medical condition. Rather, Dameron’s counsel hired and paid for Dr. Preston. Dameron’s relationship with Dr. Preston was not that of a patient who seeks medical treatment from a physician. The fact that Dr. Preston tested Dameron in order to form an opinion about her condition did not make him a treating physician.

Consulting Experts and Controlled Experts

Illinois law distinguishes between a “controlled” expert witness and an “independent” expert witness. A controlled expert is one who has been retained to give expert testimony. A party or a party’s employee who is identified as a testifying expert is also a controlled expert. An independent expert is any testifying expert who is not a controlled expert.

Illinois law draws a distinction between a controlled expert and a consulting expert. Illinois defines a consultant as “a person who has been retained or specially employed in anticipation of litigation or preparation for trial but who is not to be called at trial.”

Illinois requires litigants to identify testifying experts and to disclose the subject matter of their testimony. Litigants must make a more detailed disclosure of opinions to be offered by controlled experts, including reports they have written. The opinions expressed by consulting experts are privileged unless there are compelling reasons to order their disclosure.

Changing Expert Designations

No procedural rule in Illinois addresses the ability of a litigant to change the designation of an expert from “controlled” to “consulting.” Caselaw allows a party to abandon a previously designated expert if the abandonment does not prejudice or surprise the adverse party at trial.

The supreme court saw no meaningful difference between abandoning an expert and redesignating an expert. Dameron gave notice of the redesignation about a year before trial. The defendants were not surprised at trial by the redesignation. Dameron effectively abandoned a controlled expert, as Illinois caselaw allows.

Since Dameron did not disclose Dr. Preston’s report, the defendants were not prejudiced by reliance on opinions they expected Dameron to present at trial. Following federal precedent, the court concluded that an expert’s opinions cannot be shielded from discovery after the expert’s report is disclosed. When only the expert’s identity has been disclosed, the party who retained the expert is free to abandon a designation of the expert as a trial witness or to redesignate the expert as a consultant.

Work Product

The defendants claimed that Dr. Preston’s report was discoverable because it did not constitute “core work product” under Illinois law. They argued that medical test results are facts, not privileged opinions that would reveal Dameron’s litigation strategy or the mental impressions of her attorney.

The court decided that the language of the Illinois rule governing consultants defeated the defendants’ argument. The rule provides: “The identity, opinions, and work product of a consultant are discoverable only upon a showing of exceptional circumstances under which it is impracticable for the party seeking discovery to obtain facts or opinions on the same subject matter by other means.” The rule’s reference to “facts or opinions” protects not just work product but generally precludes the discovery of “facts or opinions” from consulting experts.

Examining the history of the Illinois rules and corresponding federal rules, the court decided that the work product privilege and the rule limiting discovery from consulting experts are not coextensive. The policies that support shielding consultants from discovery are not identical to the policies that underlie the work product privilege. Whether a consultant’s test results are characterized as facts or opinions therefore does not determine whether they are discoverable.

The defendants made no showing that they could not obtain comparable test results through an independent medical examination. Accordingly, no exceptional circumstances existed that permitted discovery of Dr. Preston’s test results. The supreme court concluded that the trial court erred by ordering production of Dr. Preston’s report and by holding Dameron in contempt for violating the discovery order.

 

Election Experts Testify in Virginia Voter ID Case

Virginia Supreme Court Allows in Evidence of Expert’s History of Testifying as an Expert

The Supreme Court of Virginia has ruled that evidence of an expert witness’ past testimony as an expert is admissible evidence.

The Accident

In December 2015, Deborah Graves was driving her vehicle when she was hit from behind by Samantha Shoemaker.  Graves experienced back, hip, and neck pain, along with increased depression and anxiety in the months following the crash.  Graves sought medical care and physical therapy that cost over $26,000.  Graves filed a lawsuit against Shoemaker, seeking $150,000 in damages.

The Expert Witness

Shoemaker’s insurer, State Farm, hired attorney John P. Cattano to represent her in the lawsuit.  Cattano retained Dr. William C. Andrews, an orthopedic surgeon who specializes in medicolegal work to testify as a defense expert witness.

Dr. Andrews reviewed Graves’ medical records and prepared an expert report.  Dr. Andrews opined that much of the pain that Graves complained of after the crash was caused by preexisting conditions.  Dr. Andrews also found that most of the treatment that Graves received was not medically necessary or reasonable to treat her minor injuries.  State Farm paid Dr. Andrews $3,362 to issue this report.

Shoemaker’s attorney deposed Dr. Andrews and discovered that Dr. Andrews had been hired by Cattano or his firm 30 to 35 times over the past 10 to 12 years and that he only testified on behalf of a plaintiff one of those times.  Dr. Andrews admitted that State Farm had paid him $793,198 for testimony he provided for their insureds from 2012 to 2018.  However, he claimed that he was not aware that State Farm was the insurer until he was told at the deposition.

Trial Court

Shoemaker admitted her fault, so the case went to trial on the issue of damages only.  Graves made a motion to introduce evidence of Dr. Andrews’ previous relationship with Cattano’s firm and State Farm.  After hearing arguments on the issue, the trial court allowed in evidence that Dr. Andrews had testified on behalf of Cattano’s clients 30 to 35 times in the past. She was not allowed to ask about prior work for State Farm because they were not in a “direct relationship.”

The jury returned a verdict in favor of Graves for $3,000 plus interest.  Graves moved for a new trial based upon the ruling that prevented her from introducing evidence of Dr. Andrews’ previous relationship with State Farm.  The court denied her motion and she appealed.

The Supreme Court of Virginia

On appeal, Graves argued that the trial court’s ruling went against the Supreme Court of Virginia’s ruling in Lombard v. Rohrbaugh, 262 Va. 484 (2001) by interpreting it to mean that a party must demonstrate a “direct relationship” between an expert and an insurance company before cross-examining the expert on previous payments from that insurance company.  The Supreme Court of Virginia agreed.

The court emphasized that its decision in Lombard only required that there be a “substantial relationship” between an insurer and an expert.  The court emphasized that the central issue is not “artificial labels.”  Instead, the focus should be on the potential for bias because of the witness’ interest in the case.

Here, State Farm’s past payments of nearly $800,000 to Dr. Andrews over the course of 7 years created a substantial relationship that had potential to create bias in the witness.  The court ruled that Graves should have been able to introduce this evidence to the jury.  The court vacated the trial court’s verdict and remanded the case for further proceedings.

 

Vote Here

Expert Witnesses Have Failed to Offer Convincing Opinions in Support of 2020 Election Challenges

Challenges to the 2020 presidential election have been based on a variety of legal claims. Some lawsuits have argued that states followed incorrect election procedures or that state legislatures failed to authorize changes that permitted voters to cast ballots more easily and safely during the pandemic. Others have alleged that ballots or counting procedures were fraudulent.

No challenge to date has altered the election outcome in any state. As judges have repeatedly commented, it is not the function of the courts to choose the president. Only convincing evidence coupled with a sound legal theory will convince a court to review election results after votes have been cast.

In several cases, expert witnesses have weighed in on the election. The expert evidence presented by election challengers has not been viewed with favor.

Nevada Experts

An election contest in Nevada was based largely on the assertion that voting machines did not accurately tabulate the votes that were cast. The challenge relied in part on the opinions of three expert witnesses. The court ruled that the expert testimony was insufficient to prove that the results were inaccurate.

To prove that votes were cast illegally, Michael Baselice conducted a telephone survey of voters. Surveys are only valid if participants consist of a sufficiently large group of randomly chosen voters who are representative of all voters. Since Baselice failed to identify the source of his survey data and “conducted no quality control of the data he received,” the court rejected his conclusions.

Jesse Kamzol concluded that votes were cast illegally based on his analysis of commercial databases of voters. Kamzol did not collect or verify the data, did not know how it was collected, and could not say whether his methodology accounted for false positives. The court concluded that the analysis was unreliable.

Scott Gessler concluded that mail voting was fraudulent. The court rejected that opinion because it was based on a small number of affidavits that Gessler made no effort to corroborate. The court faulted Gessler for failing to support his conclusions with verified facts.

Matthew Braynard

A Georgia election challenge relied on a telephone survey of absentee voters conducted by Matthew Braynard, a former employee of the Trump campaign. After the election, Braynard was hired as an expert witness and paid $40,000 to prepare an expert report. Braynard claims expertise in “the voter data and election administration field.”

Braynard alleged that his staff telephoned people chosen at random and asked them whether they requested and returned an absentee ballot. The answers were then compared to names in a statewide database of voters. Braynard extrapolated his comparisons and concluded that more than 200,000 absentee ballot were cast that were not requested by the voter or that the voter did not return.

Journalist Spenser Mestel explains why election surveys like Braynard’s are often based on bad science. More to the point, when Braynard was confronted with evidence that people he identified as illegal voters had in fact cast legal ballots, he admitted he made no effort to verify whether people listed in the database as having voted were the same people who told him that they had not voted. The election challenge was voluntarily dismissed soon after Braynard’s expert report was filed.

Braynard’s reports were filed in other election challenges, as well. A response to Braynard’s report filed in federal court by Stephen Ansolabehere, a professor of government at Harvard, contended that there was “no scientific basis for drawing any inferences or conclusions from the data presented.” His response identifies errors in Braynard’s data collection methodology and in his survey design and concludes that Braynard’s undescribed “list matching” technique was likely riddled with error.

Russell J. Ramsland Jr.

Attorney Lin Wood Jr. filed a lawsuit challenging the Georgia election. He relied in part on the expert opinions of Russell J. Ramsland Jr., a cybersecurity worker. Ramsland filed an affidavit that purported to identify inconsistencies in electronic voting machines. The New York Times reported that the alleged inconsistencies occurred in Michigan, not Georgia.

Nor were the claims accurate as to Michigan. The same Times report found that the “affidavit also listed a number of towns and counties in which Mr. Ramsland’s analysis ostensibly showed that the number of votes cast exceeded the number of eligible voters. But most, if not all, of the places Mr. Ramsland listed appeared to be townships and counties in Minnesota, not Michigan.

Ramsland filed a subsequent affidavit in a Michigan lawsuit that managed to focus on Michigan jurisdictions. Ramsland claimed that voter turnout in six Michigan precincts exceeded 100%. An investigation of those assertions judged them to be “wildly inaccurate.”

A federal judge who was appointed by President Trump rejected the Georgia challenge. The judge questioned the absence of reliable evidence to support the claim of fraud but ultimately decided that the plaintiff lacked standing to bring the suit. The Michigan lawsuit was dismissed because it was based on “theories, conjecture and speculation” rather than evidence.

Joshua Merritt

Sidney Powell has filed multiple election challenge lawsuits. Before filing in Michigan and Arizona, Powell famously told the media that she would “release the Kraken.” Her lawsuits in those states, as well as her lawsuits in Wisconsin and Georgia, were quickly dismissed.

Powell identified an expert witness in her complaints by the code name “Spyder” (sometimes “Spider”). Powell described Spyder as a former Military Intelligence expert. In a declaration filed in four states, Spyder opined that server traffic data proved that voting systems in the United States were “certainly compromised by rogue actors, such as Iran and China.”

The Washington Post reported that Spyder is Joshua Merritt, an information technology consultant. While he is an Army veteran who once enrolled in an entry-level military intelligence training program, he failed to complete the program. The military denies that he ever served as an intelligence analyst. Records show that he spent most of his military career as a truck mechanic.

Whether the judges who dismissed Powell’s lawsuits were aware that Merritt’s credentials have been stated incorrectly is unclear. The judges were likely unimpressed by a “secret expert witness” whose opinions were speculative and unsupported by reliable facts.

Terpsichore “Tore” Maras-Lindeman

Another secret witness for Powell claimed expertise as a “trained cryptolinguist.” That witness was recently identified as Terpsichore “Tore” Maras-Lindeman, a pro-Trump podcaster whose Navy experience lasted less than a year. Maras-Lindeman has a history of overstating her military credentials. Three years ago, she was fined for soliciting funds for a concert to benefit three homeless shelters and diverting those funds for her own purposes.

Michigan Audit

Claims that vote tabulating machines manufactured by Dominion switched votes to favor Biden have been widespread in social media. In response to a lawsuit founded on those claims, a Michigan judge gave an election challenger access to forensic images of logs prepared by the vote tabulation machines. The judge did not endorse those claims, but authorized the audit based on a voter’s claim that a Dominion machine incorrectly counted a vote on a village proposal to allow a marijuana dispensary.

The audit was authorized in Antrim County, where a clerk’s failure to update media drives for certain vote tabulators initially resulted in an incorrect vote count. An AP fact check found that the clerk’s subsequent correction of the error caused election challengers to argue that the error was caused by the Dominion vote tabulators when it was actually caused by human error.

The audit was conducted by Allied Security Operations Group. Its report was signed by Russell Ramsland, the same expert whose opinions were rejected in Georgia and an earlier Michigan case. The report does not identify or provide credentials of the people who prepared it. Whether they are experts is therefore unclear.

The report alleges that Dominion machines are “intentionally and purposefully designed with inherent errors to create systemic fraud and influence election results.” Dominion denies that allegation.

The AP fact check notes that some of the report’s assertions, including the claim that the county had a “68% error rate,” are largely unexplained. According to the AP, the report contains a “slew of other debunked claims about Dominion.”

After the audit was completed, Antrim County completed a hand recount of the presidential ballots. The recount confirmed that Trump won the county by less than 3,800 votes. The difference in the machine count and the hand recount amounted to about a dozen votes, a minor error rate that is common in elections. It is difficult to believe that a court will credit an audit that is undermined by an actual count of the votes.

A judge

Doctors Sued for Malpractice Must Use Expert Witness to Prove that a Different Doctor’s Negligence Caused the Patients Injury

The injury victim in a medical malpractice lawsuit is nearly always required to present expert testimony to establish that a physician breached the applicable standard of care and that the breach caused the victim’s injury. The Maryland Court of Appeals was asked whether the same standard applies to a doctor who defends a malpractice claim by asserting that the negligence of another party caused the victim’s injury. Under the facts of the case, the court decided that expert testimony was required.

Facts of the Case

Martin Reiss suffered from tumors in his kidney. A surgeon made a plan to remove the cancerous kidney as well as an enlarged lymph node that was adjacent to the kidney. The surgeon removed the kidney in 2011 but elected not to remove the lymph node because it was close to a large blood vessel that transports blood to the heart.

After the surgery, Reiss was treated by Dr. Russell DeLuca, an oncologist. Dr. DeLuca suspected that the lymph node was cancerous but agreed that it could not be removed safely. He opted to treat Reiss with chemotherapy. The treatment caused the lymph node to shrink, confirming that it was cancerous.

During a period of five years, Dr. DeLuca ordered periodic CT scans of the lymph node to determine whether it was enlarging. Between 2011 and 2014, Dr. Victor Bracey, a radiologist, interpreted the scans. He noted that a contrast dye was not used to perform scans, making interpretation less than optimal. He nevertheless concluded that the lymph node was not enlarging.

In 2015, a different radiologist, Dr. Elizabeth Kim, interpreted a non-contrast CT scan and found “soft tissue density” in the vicinity of the lymph node. She also concluded that the lymph node had enlarged since 2011. A biopsy confirmed that the lymph node was cancerous. A new oncologist agreed that the condition was inoperable.

Malpractice Lawsuit

Reiss sued Dr. Bracey and the surgeon who removed his kidney. He alleged that the surgeon was negligent for not removing the lymph node. At some point, Reiss dismissed his claim against the surgeon.

Reiss alleged that the lymph node could have been surgically removed at an earlier time. He alleged that by 2015, it had become inoperable. He contended that Dr. Bracey was negligent for failing to diagnose the enlargement of his lymph node at a time when it could have been removed.

Dr. Bracey denied that he was negligent. In his answer to the complaint, Dr. Bracey contended that Reiss’ oncologists were negligent and that their negligence caused Reiss’ injury.

Expert Testimony

Reiss presented the expert testimony of Dr. Paul Collier, a vascular surgeon, to establish that the lymph node could have been safely removed at any time before 2015 but not later. Dr. Bracey called Dr. James Black as an expert in vascular surgery. He agreed that the lymph node could have been removed in 2011 but disagreed with Dr. Collier’s opinion that the lymph node could not have been removed after 2015.

Reiss called Dr. Barry Singer as an expert in oncology. Dr. Singer testified that Reiss would have had a much greater probability of survival if the lymph node had been removed between 2011 and 2014. Dr. Singer opined that a biopsy would have confirmed that the lymph node was cancerous. He testified that surgical removal of cancer is always the best treatment option and that Reiss would have been cured if the lymph node had been removed. He explained that Reiss’ life expectancy is significantly shorter because the cancerous lymph node was not removed.

Alleged Negligence of Non-Parties

Dr. Bracey did not designate an expert to support his claim that Reiss’ oncologists were negligent. He instead made a general reservation of his right to rely on Reiss’ expert witnesses.

The trial judge ruled that the alleged negligence of the oncologists was relevant to Dr. Bracey’s defense. The judge also ruled that Dr. Bracey would not be allowed to cross-examine Reiss’ experts about the alleged negligence of his oncologists. The judge decided that Dr. Bracey needed to rely on his own experts and that disclosing an intent to rely on Reiss’ experts did not comply with expert designation rules. That ruling was not appealed.

Reiss called Dr. DeLuca as a fact witness. Dr. DeLuca testified that he discontinued chemotherapy because Dr. Bracey’s radiological reports convinced him that the cancer was in remission. He explained that he did not order dye to be used in administering the CT scan because he did not want to damage Reiss’ remaining kidney. He also testified that he did not refer Reiss’ case to the tumor board for an opinion on the viability of removing the lymph node because he relied on the surgeon’s opinion that the lymph node could not be removed safely.

Reiss’ new oncologist testified that he consulted with a general surgeon who advised against surgical removal of the lymph node because there was no clear separation between the lymph node and the vein. In that surgeon’s view, the risk of surgery would have outweighed the anticipated benefit. The oncologist acknowledged, however, that he did not ask a vascular surgeon to review the case.

No expert witness testified that the surgeon who removed Reiss’ kidney breached an applicable standard of care by not removing his enlarged lymph node. Nor did any expert witness testify that the standard of care required Dr. DeLuca or Reiss’ new oncologist to refer Reiss to a surgeon to remove the lymph node or to order a biopsy.

The jury demonstrated its confusion about the verdict form before finally determining that Dr. Bracey was not liable for Reiss’ injury. Reiss appealed.

Appellate Decision

Under Maryland law, “evidence of non-party negligence is relevant and admissible in medical malpractice cases.” The court noted that evidence of negligent acts by other doctors are relevant for three purposes: (1) to prove that the defendant doctor was not negligent; (2) to prove that the defendant doctor’s negligence was not a cause of the patient’s injuries; or (3) to prove that another doctor’s negligence was a superseding cause of the patient’s injuries “that cleaved the chain of causation running from the defendant’s negligence.”

Dr. Bracey was therefore entitled to introduce evidence that other doctors were negligent — for example, by not removing the lymph node during Reiss’ initial surgery, by not ordering dye to be used in the CT scan, by not performing a biopsy, or by not removing the lymph node after its cancerous nature became clear. If the jury decided that Reiss was injured because of mistakes made by other doctors and that Dr. Bracey did not contribute to that injury, it was entitled to find in Dr. Bracey’s favor.

The jury heard evidence about the decisions made by other doctors. The question before the court was whether the jury could find that those doctors were negligent in the absence of expert evidence.

Dr. Bracey made the technical argument that he never asserted the negligence of other doctors as an affirmative defense and therefore had no burden to prove their negligence. Rather, he denied liability and raised non-party negligence as an alternative theory of causation that, in his view, he didn’t need to prove.

The court of appeals concluded that the label attached to the defense is not dispositive. The court held that “expert testimony is required to establish non-party medical negligence without regard to whether a defendant is raising the non-party medical negligence as an affirmative defense or in connection with a general denial of liability.”

That holding is consistent with the general rule that juries require the assistance of expert witnesses to determine whether a physician breached an applicable standard of care. Dr. Bracey’s “alternative theory of causation” could not be advanced without evidence. Expert evidence is required to persuade a jury that medical negligence occurred. Without that evidence, a jury would have no basis for concluding that Dr. Bracey’s “alternative theory” was grounded in fact.

Whether or not Dr. Bracey had the burden of persuasion, he had the burden of producing admissible evidence that non-party doctors were negligent. That burden of production could only be met by introducing expert opinions. Since Dr. Bracey failed to offer expert opinions, it was error for the trial court to submit a jury form that asked whether non-party physicians were negligent. That question sent the message that non-party negligence could relieve Dr. Bracey of liability. In the absence of expert evidence that the other doctors were negligent, the jury should not have considered their conduct in determining whether Dr. Bracey was liable. The court therefore remanded the case for a new trial.

 

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Expert Witness Establishes GEICO’s Failure to Pay Reasonable Cost of Windshield Replacements

A Florida judge in Hillsborough County consolidated eleven lawsuits that Glasso, Inc. filed against GEICO. In each case, Glassco replaced windshields that were damaged in cars insured by GEICO. Glassco took an assignment of the insurance benefits from the car owners and billed GEICO directly for the replacement cost.

The lawsuits alleged that GEICO paid less than the invoiced amount. GEICO admitted that it did not pay the invoices in full. It relied on a clause in its insurance contract that limits its liability to the “prevailing competitive price” for repairs. GEICO contended that Glassco’s billings exceeded the prevailing competitive price for windshield replacements.

To support its claim, Glassco relied on the testimony of owners of businesses that make windshield repairs. Glassco also called an expert witness. The judge agreed with the expert’s opinion and entered judgment in favor of Glassco.

Facts of the Case

At trial, the owner of Glassco and the owners of two competing auto glass companies explained how they determine pricing. They take into account the cost they pay for replacement glass and for the materials (molding, clips, and adhesive) they use to install the glass. They also take into account their labor costs. All of those depend on the make, model, and year of the vehicle that needs a replacement windshield.

To reach a final price, the owners add profit to their costs. To calculate profit, the owners take into account the amounts charged by competitors in their same market. They also consider the charge that most insurance companies will pay without dispute.

The owners of Glassco’s competitors testified that Glassco’s pricing structure was consistent with prevailing market prices. They also testified that 95% of insurance companies pay their bills without dispute. Glassco has a similar rate of undisputed payment.

Expert Testimony

Barrett Smith testified as an expert witness for Glassco. Smith is an expert in the appraisal of collision damage repair. He operated an auto body repair shop before joining the insurance industry. As a claims adjuster, Smith evaluated collision damages and estimated reasonable repair costs. He returned to the collision repair industry before founding a business that provides expert appraisal and mediation services regarding collision damage.

Smith testified that he was hired to “perform comparative market research regarding the products and services provided in windshield replacement service” and to tender an opinion “as to the prevailing competitive price of the goods and services.” He concluded that Glassco’s prices were competitive and prevailing within its market.

Smith surveyed 24 glass repair facilities to determine their pricing structure. Based on that survey and his considerable experience in the collision repair and insurance industries, he found that Glassco’s prices were at the lower end of the prevailing range of prices in the market.

GEICO’s Defense

GEICO did not contest that Glassco performed the windshield repairs competently. GEICO did not disagree that Glassco was conveniently situated to the owners who brought their vehicles in to be repaired.

GEICO offered no expert testimony. It instead relied on the testimony of a corporate representative who handles glass litigation claims. She testified that GEICO paid invoices according to its own determination of the “prevailing competitive price.” She based her opinion of that price on GEICO’s glass pricing agreement with its affiliate SGC/Safelite.

Court Decision

The court decided that Glassco had the initial burden of offering “substantial, competent evidence to establish its prima facie case for what the prevailing competitive price is” because Glassco could not prove a breach of contract without demonstrating that it invoiced the prevailing competitive price. If Glassco succeeded in making a prima facie case, the burden shifted to GEICO to establish that the invoices exceeded the prevailing competitive price.

Glassco met its burden with industry and expert testimony. In particular, the court credited Smith’s expert testimony that Glassco’s pricing was at the low end of the prevailing range of competitive pricing.

To rebut that testimony, GEICO offered only the opinion of its own employee. The court faulted GEICO’s representative for failing to offer any data to support her conclusory opinion. GEICO’s pricing agreement with a single affiliate did not establish a prevailing price within the industry. The court therefore agreed that GEICO breached its insurance contracts by failing to pay the full amount that Glassco billed for its services.

Lesson Learned

Glassco’s lawsuit illustrates the impact that expert evidence can have in litigation. While Glassco may have prevailed by relying only on the testimony of glass company owners, the court might have regarded that testimony as self-serving, given the owners’ interest in maximizing their profits by forcing GEICO to pay their bills.

By calling an expert witness with years of experience in both the collision repair industry and in the insurance industry, Glassco offered important support for its claims. The expert collected a significant amount of survey data to support his opinion, giving the court a strong basis for understanding the prevailing competitive price structure for auto glass repair. The court’s favorable view of that expert evidence clearly contributed to Glassco’s litigation success.