Get Your Experts Opinions Nailed Down Ahead of Trial, or Else!

Erin Dunnavant | Property Insurance Coverage Law Blog | December 8, 2018

Recently, Florida’s Third District Court of Appeal found that a trial court abused its discretion by allowing the trial testimony of an insured homeowner’s expert when he expanded on his opinions during trial. The case is Citizens Property Insurance Corporation v. Vazquez.1

The loss dealt with an explosion inside a marijuana grow house located across the street from the insured homeowners’ residence. The explosion at the grow house occurred on September 22, 2012. Just after the explosion, the homeowners reported their claim to Citizens. After Citizens’ experts inspected they found the cause of damage to be wear and tear, excluded causes under Citizens policy and not due to the explosion. As such, Citizens denied the claim.

The homeowners then sued Citizens for breach of contract based on the denial. Although the trial was originally set in June of 2014, it was continued four times allegedly at the request of the homeowners and their counsel and the case did not actually go to trial until August 17, 2015. To support their position, the homeowners hired Dr. Calvin Konya, a blaster from Ohio to testify on their behalf. Mr. Konya was finally produced for his deposition on the eve of trial, despite several attempts by Citizens to depose him prior to that, according to the record. Mr. Konya’s deposition testimony was that the explosion at the house across the street could have caused damage to the home. He also admitted that he had never been to the insured property and could not testify regarding specific damages. According to the record, Dr. Konya arrived in Florida on day two of the trial (August 18, 2015) and went to the homeowners’ property that evening to finally inspect. The homeowners’ counsel did not disclose Konya’s visit to Citizens. On August 21, 2015—three days after Dr. Konya’s inspection, the homeowners’ counsel called him to testify. There Citizens learned for the first time he had been out to the property. Having now observed the property, Dr. Konya was able to expand on his previously given opinions and found that with certainty the explosion had caused specific damages. (A significant step beyond could have caused the damage).

During Citizens’ lawyer’s cross examination, Dr. Konya also admitted that without the inspection, he could not have given an opinion on specific damages. Citizens moved to suppress the witness’ testimony, but the trial court denied the motion. Then once Konya’s testimony came out, and the “beans were spilled” Citizens moved for new trial and that was also denied. After the jury awarded the homeowners $100,000.00, Citizens appealed.

Ultimately the appellate court agreed with Citizens, finding that the trial court had abused its discretion in allowing Dr. Konya’s testimony as it not only resulted in “unfair surprise” to Citizens but it was also “prejudicial” and required reversal. The appellate decision was based on the notion that parties have the right to rely on discovery deadlines and that expert opinions will not change after those deadlines. The mid-trial inspection of the homeowners’ expert that ultimately caused him to expand on his opinions given at deposition violated the discovery deadline and caused unfair surprise to Citizens. This was exhibited by the fact that Citizens’ trial counsel relied on the testimony during opening statement, particularly during a part where he stated that the jury should be listening to the homeowners’ experts who could not prove causation with certainty. In addition to causing unfair surprise to Citizens and their counsel, the appellate court found the allowance of Dr. Konya’s trial testimony to be prejudicial as the previously undeveloped and never disclosed opinion of Dr. Konya became the foundation of the homeowners’ case. The court also found that the timing of the testimony did not permit Citizens to challenge Dr. Konya’s qualifications or rebut this critical testimony.

Ultimately the appellate court summed up its holding:

Accordingly, we conclude that the trial court abused its discretion when it allowed Konya to testify because Konya’s opinion was based on information obtained post-discovery and mid-trial. Because Konya’s trial testimony both surprised and prejudiced Citizens during trial, we reverse the final judgment and remand for a new trial.

While writing about a loss for insured policyholders is not my favorite task, I feel like I need to make my fellow policyholder advocates aware of “what not to do” when issues like this cause both parties to expend the time and resources to start over with a trial. However, I am unaware of the facts and circumstances surrounding why the trial was continued so many times and why the expert couldn’t appear sooner. It may have concerned an illness or events that occurred outside of everyone’s control. (I am giving homeowners’ counsel the benefit of the doubt here).

Here are some tips to avoid what happened in this case:

  1. Obtain your experts early and picture your case going before a jury from the onset; ironically it may help your case settle early if the insurance company knows you are coming in well prepared;
  2. Conversations regarding your expert’s obligations should always include the chance that the claim might have to get tried. You never know when an insurance carrier is going to dig their heels in or when your client is going to just get so fed up that they want to go to trial on principal. However, your expert should expect to be visiting the property and needs to know that he will have to sit for deposition at some time prior to the discovery deadline. In an ideal world, their initial opinions should be thorough enough to support your case in chief on the off-chance that their deposition is not taken prior to trial.
  3. If you are a trial lawyer, some work on the weekends is inevitable as preparing a Civil Case for trial is a massive undertaking. As such, be willing to produce your expert on a weekend prior to the discovery cutoff in an absolute pinch as its better than violating the Court’s discovery deadline.
  4. If some emergency happens requiring a during trial inspection, the homeowners’ counsel here MIGHT have been able to salvage this one if they’d simply disclosed to Citizens that he’d been out there and let Citizens lawyer depose him the night before he testified.

With all that said, I would also like to remind my friends, colleagues, and fellow lawyers out there representing Citizens that this is a very narrow holding based on these very particular facts and should not be applied too sweepingly.
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1 Citizens Prop. Ins. Corp. v. Vazquez, Case No. 3D15-2864 (Fla. 3d DCA November 21, 2018).

Construction Law Practice Tip: Certificate of Merit Requirements in Federal Court

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Pierre Grosdidier and Ryan Gardner | Haynes and Boone LLP | November 12, 2018

Under Texas law, a plaintiff must file a certificate of merit in any action for damages arising out of the provision of professional services. A certificate of merit is an affidavit from a third-party professional who is knowledgeable about the defendant’s practice area that essentially gives credence to the plaintiff’s claims. A failure to file a certificate with the first-filed petition will result in the action’s dismissal in Texas state courts. But, federal courts are currently divided on whether plaintiffs must also file a certificate of merit when bringing these claims in diversity. No federal Circuit Court has addressed the Texas certificate of merit statute yet, but several federal district courts have considered the issue both for the Texas statute and other comparable state laws and reached conflicting conclusions. Two Texas district court cases discussed below illustrate this conflict well.

Faced with these conflicting results, construction law practitioners bringing claims against professionals in federal court should consult the case law to determine whether the forum court has decided the issue and how. Even if a district judge has previously held that plaintiffs in diversity can dispense with certificates of merit, it is conceivable that another judge might hold otherwise. Moreover, a district judge’s decision that no certificate of merit is required might be reversed by the Fifth Circuit Court of Appeals. Considering the time required to appeal, a negligence claim against a professional might be well past its limitations by the time the appellate court remands the case and the district court dismisses it without prejudice. Therefore, the best practice might be to always include a certificate of merit with an initial complaint.

In Estate of C.A. v. Grier, the Southern District of Texas held the certificate of merit requirement did not apply to federal diversity cases. The Supreme Court’s seminal opinion in Erie Railroad Co. v. Tompkins along with its more recent opinion in Shady Grove Orthopedic Associates v. Allstate Insurance Co. guided the court’s analysis. Erie held that courts adjudicating diversity-jurisdiction claims must apply state substantive law but federal procedural law to the proceedings. To determine if Section 150.002 was a substantive or procedural rule, the court applied the two-step test set forth in Shady Grove: (1) it determined whether the state law—Section 150.002—conflicted with federal law and, (2) if such a conflict did exist, the court asked if applying the federal rule was valid under the federal Rules Enabling Act, which forbids federal procedural rules from abridging, enlarging, or modifying any substantive rights.

Applying the first step, the court found Section 150.002 conflicted with various Federal Rules of Civil Procedure. The court first found a conflict with federal law because Section 150.002 imposed more stringent pleading requirements than Rules 8 and 9. Specifically, the court found Section 150.002’s requirement that the certificate of merit contain the specific factual allegations, including the action, error, or omission by the professional that formed the basis of the suit, created additional pleading requirements beyond Rule 8’s requirement that a pleading provide a short and plain statement of the plaintiff’s claim. Section 150.002 was, therefore, inconsistent with federal law. The court also found Section 150.002 conflicted with the discretion given to courts by Rule 11 to sanction attorneys for filing meritless claims. The court held the mandatory dismissal requirement took away the court’s Rule 11 discretion except as to whether the case should be dismissed with prejudice. Moreover, it concluded the certificate of merit requirement was inconsistent with Rule 26’s expert disclosure and report requirements by accelerating the federal procedures regarding experts.

Turning to the second step, the court held that applying Rules 8, 9, 11, and 26 in light of Section 150.002 did not affect any substantive rights (and, therefore, did not violate the Enabling Act) because Section 150.002’s “most obvious purposes are procedural.” Specifically, Section 150.002 was a procedural rule designed to inform the defendant of the specific conduct the plaintiff is challenging and to assure the court that the claims have merit.

The court found federal law provided other procedural means to accomplish these objectives, namely those offered by Rules 8 and 26(a). Thus, it held that Section 150.002 did not apply to federal diversity cases and denied the defendant’s motion to dismiss.

In State Automobile Mutual Insurance Co. v. Dunhill Partners, Inc., the Northern District of Texas reached the opposite conclusion when faced with identical arguments. The court found Section 150.002 did not conflict with Rules 8 or 9 because the statute was not about pleadings, facts, or notice but rather about “rooting out professional negligence claims that lack expert testimony.” As to Rule 11, the court found no inconsistency because the Federal rules implicitly mandated dismissal for a procedural deficiency, such as under a Rule 12(b) motion, and because Rule 11 focuses on attorneys, not the claims. The court also found no conflict with Rule 26 because Section 150.002’s concurrent filing requirement did not alter the federal schedule for disclosures or discovery. Additionally, the court found the certificate of merit requirement to be substantive because its dismissal requirement had a direct effect on the ultimate result of the litigation. The Court, therefore, held Section 150.002 should apply to federal diversity cases, dismissed all claims without prejudice, and ordered the plaintiff to file an amended petition within 30 days to avoid dismissal with prejudice.

Supreme Court of Florida Upholds the Frye Standard

Andrew O. Gay and Luis Prats | Carlton Fields | November 13, 2018

On October 15, 2018, in the matter of Richard Delisle vs. Crane Co., et al.[1], the Supreme Court of Florida unequivocally reaffirmed that Frye remains the standard for the admission of expert testimony. This reaffirmation comes after the Florida Legislature amended section 90.702 to incorporate the Daubert standard into the Florida Rules of Evidence in 2013.

A little backstory may be instructive. The Frye standard gets its name from a federal court of appeals opinion in Frye v. United States[2], which, in general, required expert testimony to be based on “well-recognized scientific principle or discovery.”[3] Accordingly, novel scientific technique that is not generally accepted by the established scientific community is inadmissible. In Florida, the Frye standard became the rule for the admission of expert testimony.[4]

Almost 50 years after Frye, the Federal Rules of Evidence were born, which included Rule 702. Rule 702 dealt specifically with the admission of expert testimony at trial. Years later, in its opinion in Daubert v. Merrell Dow Pharmaceuticals[5] dealing with the application of Federal Rules of Evidence Rule 702, the United States Supreme Court determined that the judge is the “gatekeeper” when it comes to admissibility of expert testimony, which contradicted the Frye standard that placed the decision of admissibility with the scientific community. In 2000, Federal Rules of Evidence Rule 702 was amended to reflect the Daubert standard. Since that time, the Daubert standard, as codified in Federal Rules of Evidence Rule 702, is the standard used in all federal courts.

Florida, however, has not followed suit. In 1997, following Daubert, the Supreme Court of Florida stated that Florida will continue to apply the Frye standard in order to “guarantee the reliability of new or novel scientific evidence.”[6] Despite the Court’s repeated affirmations, the Florida Legislature amended the Florida Rules of Evidence Rule 90.702 to incorporate the Daubert standard.

The question before the Supreme Court of Florida in Delisle concerned the constitutionality of the Florida Legislature’s 2013 amendment to Florida Rules of Evidence Rule 90.702. The Court found that the amendment was unconstitutional because it concerned a procedural, not a substantive, matter, and because the amendment was in conflict with a rule of the Supreme Court of Florida.

The Court stated that Florida Rules of Evidence Rule 90.702 is not substantive because “it does not create, define, or regulate a right.”[7] The Court noted further that this Rule 90.702 “solely regulates the action of litigants in court proceedings,”[8] thus rendering the Rule procedural. Pursuant to the Florida Constitution, the Supreme Court of Florida has the exclusive authority to “adopt rules for the practice and procedure in all courts.”[9] Accordingly, “[t]he Legislature may only repeal the rules of this Court by ‘general law enacted by two-thirds vote of the membership of each house of the legislature.’”[10] The amended Florida Rules of Evidence Rule 90.702 conflicted with the Supreme Court of Florida’s earlier affirmations that Frye is the applicable procedural standard for the admission of expert testimony. The Florida Legislature failed to collect the required votes.

You may be asking yourself: “This is all fine and well, but how does this impact me?” Good question. For cases brought in Florida, and depending on the circumstances, litigants may have the option to choose between litigating in federal court or Florida state court, which will cause the expert’s testimony to be scrutinized differently. This should be given serious consideration at the early stages of the litigation.

Do not hesitate to contact any member of our construction practice group if you have questions about the Richard Delisle vs. Crane Co., et al. decision or any other construction contract or litigation matter.

[1] NOTICE: this opinion is not final until time expires to file rehearing motion and, if filed, determined.

[2] 293 F. 1013 (D.C. Cir. 1923).

[3]Id. At 1014.

[4]Seee.g. Kaminski v. State, 63 So. 2d 339, 340 (Fla. 1952); Bundy v. State, 471 So. 2d 9, 13 (Fla. 1985);Stokes v. State, 548 So. 2d 188, 195 (Fla. 1989); and Hadden v. State, 690 So. 2d 573 (Fla. 1997).

[5] 509 U.S. 579 (1993).

[6]Brim v. State, 695 So. 2d 268 (Fla. 1997) (citing Stokes v. State, 548 So. 2d 188 (Fla. 1989)).

[7]Richard Delisle v. Crane Co., et al., No. SC16-2182 at 17 (Oct. 15, 2018).

[8]Id.at 17.

[9] Art. V, § 2(a), Fla. Const.

[10]Richard Delisle v. Crane Co., et al., No. SC16-2182 at 14(Oct. 15, 2018), quoting Art. V, § 2(a), Fla. Const.

Florida Supreme Court Rebuffs Legislature’s Mandate to Adopt Daubert Standard

Clifford J. Zatz and William L. Anderson | Crowell & Moring LLP | October 22, 2018

Five years after the Florida legislature amended the state’s evidence code to incorporate the Daubert standard for admissibility of expert testimony, the Florida Supreme Court last week held the amendment unconstitutional. “With our decision today,” said the Court, “we reaffirm that Frye, not Daubert, is the appropriate test in Florida courts.” Florida now rejoins the minority of states that adhere to the “general acceptance” standard for expert testimonyEqually important for toxic tort defendants, the Court held that medical causation testimony, including the “every exposure” theory of mesothelioma causation, “is not new or novel and is not subject to Frye analysis.”

This year marks the 25th anniversary of the U.S. Supreme Court’s decision in Daubert v. Merrell Dow Pharmaceuticals, IncDaubert announced a new, “flexible” standard for the admissibility of scientific expert testimony, holding that the “general acceptance” test of Frye v. United States, had been displaced by the Federal Rules of Evidence. Since then, Daubert has been the test in the federal courts; its standard is now incorporated in the text of Federal Rule of Evidence 702.

But the Daubert – Frye debate has continued in the state courts. In 2016, in litigation alleging that cell phone radiation causes brain tumors, the District of Columbia finally abandoned Frye in favor of Rule 702. By legislation effective in August 2017, Missouri adopted the Daubert standard. In August of this year, the New Jersey Supreme Court required trial courts to consider the Daubert factors, but stopped short of declaring New Jersey a “Daubert jurisdiction,” declining to accept the entire body of Daubert case law. At last count, Daubert states outnumbered Frye states by a ratio of about 4:1. (Three states – Nevada, North Dakota, and Virginia – maintain their own unique standards for admissibility.) Over the years, studies have shown that Daubert leads more often than Frye to the exclusion of expert testimony, especially in favor of defendants.

Perhaps no state has grappled with the Daubert – Frye decision more than Florida. But the debate has come to an apparent end with the decision in DeLisle.

The path to the DeLisle decision was a long one, and reflected strong disagreement within the bar. After the legislature passed the so-called “Daubert Amendment” in 2013, the Florida Bar’s Code and Rules of Evidence Committee received comments on the Amendment. The comments were opposed to the Amendment by a count of 81-29. Accordingly, the Committee recommended, by a vote of 16-14, that the Supreme Court not adopt the Amendment. The Court then received comments of its own – this time 131-56 in favor of adopting Daubert. But in a February 16, 2017 per curiam order, the Court declined to adopt the Amendment, to the extent it was procedural, “due to the constitutional concerns raised, which must be left for a proper case or controversy.”

DeLisle was that “case or controversy.” The plaintiff in DeLisle alleged that he had contracted mesothelioma as a result of exposure to asbestos, both occupationally and in cigarette filters. The jury reached a verdict of $8 million in his favor. Reviewing the admission of the plaintiff’s expert testimony under Daubert, the Florida Fourth District Court of Appeal reversed, ordering a new trial for defendant R.J. Reynolds and entry of a directed verdict for defendant Crane. It held that the trial court had “failed to properly exercise its gatekeeping function” as to plaintiff’s causation experts.

The Supreme Court’s decision turned on whether the Daubert Amendment was properly characterized as substantive or procedural. The latter, it pointed out, could be enacted only by the Court itself, and repealed only by a supermajority of two thirds of each house of the legislature. Here, only the state Senate, not the House, had passed the bill by the requisite vote.

The majority opinion addressed the relative merits of Daubert and Frye only in a footnote, expressing concern that the amendment “would affect access to the courts…by imposing an additional burden on the courts.” A concurrence, however, offered a laundry list of objections to Daubert: any other approach “reflects a mistrust of the jury system”; it “has blocked more court access than it has enabled”; defendants “exploit” its requirements “as a sword against plaintiffs’ attorneys”; it applies more often than Frye”; it often requires expensive, multi-day hearings”; it increases the burdens on the parties.

Curiously, the majority described Frye as “the higher standard of reliability,” quoting its own decision in Brim v. State, yet also reaffirmed its view that “Frye is inapplicable to the vast majority of cases…” It ignored R.J. Reynolds’ argument that the DeLisle plaintiff’s expert testimony should be excluded under either standard. Without analysis and in a single paragraph, the Court held that “medical causation is not new or novel and is not subject to Frye analysis.” The Court thus effectively authorized “every exposure” testimony to reach the jury in Florida toxic tort cases without judicial screening.

 

Don’t Cross The Line With Deposition Witnesses

Shari L. Klevens and Alanna Clair | Mondaq | October 4, 2018

Here are some tips for avoiding ethical issues and the possibility of sanctions in connection with depositions.

Most experienced litigators have at least one horror story of a deposition that went poorly. It usually starts with an opposing attorney with an ax to grind or one that is determined to prove to their client that they are an especially “zealous advocate.” However, attorneys can forget that, although depositions may be held in informal settings, the rules of decorum and professionalism still apply in full force.

Courts will not hesitate to sanction attorneys who engage in conduct during depositions that would never be tolerated in the courtroom. In particular, as reflected by a number of recent decisions in California, courts do not look kindly upon conduct that demonstrates a lack of respect for opposing counsel.

For example, in Claypole v. County of Monterey, No. 14-CV-02730-BLF at *4 (N.D. Cal. Jan. 12, 2016), the U.S. District Court for the Northern District of California sanctioned an attorney for advising opposing counsel that she should not raise her voice because “it’s not becoming of a woman or an attorney who is acting professionally under the rules of professional responsibility.”

While it is perhaps unsurprising that such an obviously sexist remark drew the court’s ire, other courts have imposed sanctions for “snarky” comments that may be somewhat commonplace in heated depositions but nonetheless are viewed by courts as being inconsistent with the level of civility expected from attorneys. In Lucas v. Breg, No. 3:15-CV-00258-BAS-NLS, at *2 (S.D. Cal. May 13, 2016), the U.S. District Court for the Southern District of California sanctioned an attorney for statements to opposing counsel during a deposition such as “shame on you,” “you know, someone apparently didn’t fill you in on who you’re dealing with here,” and “it appears you might be hallucinating by positing the possibility that the defendants are going to win this lawsuit.”

The resulting sanctions for such conduct can be severe and could  include an order requiring payment of opposing counsel’s fees or a monetary fine. For more severe conduct, a bar grievance may be possible. Below are some tips for avoiding ethical issues and the possibility of sanctions in connection with depositions.

Encourage Your Witness to Tell the Truth

A common source for the types of disputes that can lead to sanctions is an attorney’s improper preparation of the witness for the deposition. While preparing the witness for questions that will likely be asked during a deposition is certainly important, most attorneys recognize that “coaching” the witness is inappropriate.

Specifically, preparation that arguably assists the witness in fabricating responses to anticipated questions or implicitly suggests that the witness withhold or alter the truth may violate Rule 3.3 of the California Rules of Professional Conduct. This rule, which will become effective on Nov. 1 as part of the extensive revisions to the California Rules of Professional Conduct, provides that   a “lawyer shall not … offer evidence that the lawyer knows to be false.” Moreover, “if a lawyer, the lawyer’s client, or a witness called by the lawyer, has offered material evidence, and the lawyer comes to know of its falsity, the lawyer shall take reasonable remedial measures, including, if necessary, disclosure to the tribunal,” unless disclosure would violate the lawyer’s duty to maintain confidentiality. The comments further specify that Rule 3.3 applies in ancillary proceedings, such as a deposition.

Accordingly, any coaching that crosses the line to the point where the attorney either advises the client to testify falsely or otherwise fails to dissuade the client from doing so may implicate Rule 3.3, depending on the circumstances.

Pay Attention to The Rules

Although uncivil conduct is generally regarded as wholly inappropriate in every court, jurisdictions can vary regarding whether a host of other conduct is permitted during a deposition. For example, the issue of whether an attorney can confer with the deponent can be a gray area, and some courts refuse to permit such conferences while a question is pending.

For guidance, attorneys can check their rules of civil procedure, local rules, or standing orders to confirm appropriate deposition conduct. For example, one of the most common issues is the use of “speaking objections,” which can be used to coach the deponent on how to answer certain questions or to provide information that essentially amounts to testimony being provided by the defending attorney.

Such objections are generally improper in federal courts, as Federal Rule of Civil Procedure Rule 30(c)(2) provides that “an objection must be stated concisely in a nonargumentative and nonsuggestive manner.” State courts often similarly prohibit objections that go beyond simply stating the basis for the objection.

Another issue that might be addressed in the local rules (and that can lead to disputes) is the circumstances upon which an attorney may instruct the client not to answer a question. The most common basis for an instruction to the client not to answer is where the question seeks privileged information. However, there can be some variation as to other circumstances that may justify an instruction not to answer. For example, in addition to permitting instructions not to answer where privileged information is sought, the Los Angeles Superior Court’s “Guidelines for Civility in Litigation” provide that such an instruction can be made where the question is “manifestly irrelevant or calculated to harass.”

It is also important to remember that, even where an instruction not to answer is based on a privilege claim, the deponent may be required to answer questions relevant to the existence, extent, or waiver of the privilege, such as the date of the communication, who made the statement, to whom and in whose presence the statement was made, other persons to whom the contents of the statement have been disclosed, and the general subject matter of the statement, unless such information itself is privileged.

Even despite rules clearly prohibiting certain conduct at depositions, too many attorneys believe that the rules are merely “suggestions” or that there will be no adverse consequences to pushing the limit. However, as reflected by recent cases, attorneys that flout the rules do so at their own risk.