Summary
striking expert's testimony regarding parties' intent in entering into a contract
Summary of this case from Old Line Life Insurance Company v. BrooksOpinion
Civil Action No. 00-2099-CM
April 4, 2001
MEMORANDUM AND ORDER
Pending before the court is defendants' motion to strike plaintiff's expert witness disclosure (Doc. 65). Defendant seeks to strike plaintiff's designation of Boyd Mesecher as an expert and to preclude plaintiff from presenting Mr. Mesecher as an expert at trial. For the reasons set forth below, defendants' motion is granted in part.
• Background
This case arises out of the sale of defendants' Boeing 727 commercial jet aircraft. The parties dispute the type and effect of their relationship preceding defendants' sale of the aircraft to the Ecuadorian airline TAME. Plaintiff contends it entered into a brokerage agreement with defendants, whereby it was to be the exclusive broker of the aircraft for sale to TAME. Defendants dispute this characterization and contend that they attempted to enter into a purchase agreement with plaintiff, whereby plaintiff would purchase the aircraft and resell it to TAME, at a profit. Following defendants' sale of the aircraft to TAME without plaintiff's involvement, plaintiff filed suit alleging tortious interference with a business relationship, fraudulent promise of a future event, fraud by silence and breach of fiduciary duty.
Plaintiff seeks to introduce Boyd Mesecher as an aviation expert. Pursuant to the expert testimony report filed by plaintiff on September 25, 2000, Mr. Mesecher is put forth to offer testimony regarding:
• The inconsistency between the parties' September 30, 1998 exclusive agency contract and the August 24, 1998 letter of intent to purchase the aircraft. Specifically, Mr. Mesecher opines that the parties' dealings show an intent to establish an exclusive agency whereby defendants would receive a flat sales price of $5,650,000 for the aircraft "as is" and plaintiff would act as the exclusive agent for the aircraft to TAME, with plaintiff's commission to be the difference between the amount paid by TAME (i.e., $6,900,000), less modification costs, and less the flat sales price of $5,650,000.
• The general industry practice that brokers do not pay deposits on aircrafts offered for sale.
• That defendant Dodson's concern with allowing the aircraft out of the United States for maintenance work is inconsistent with industry practice, as foreign maintenance work by skilled mechanics is generally considered equivalent to domestic maintenance work. Further, the aircraft would have been fully insurable while out of the country for maintenance.
• The value of commercial jet aircraft is greatly affected by the state of the aircraft maintenance records, and the transaction at issue in this case was delayed because defendant Dodson did not have complete maintenance records when the aircraft was initially offered for sale and when it was inspected by TAME representatives.
• Defendant Dodson's practice of dealing with brokers and/or agents is not consistent with standard industry practices prevailing among experienced buyers and sellers of commercial jet aircraft.
The court notes the following list is numbered as plaintiff has numbered his expert witness report (i.e., 1,2,4,5,6). Plaintiff has not included a number 3 in this report.
• Federal Rule of Evidence 702
Federal Rule of Evidence 702 allows expert testimony, by opinion or otherwise, if the witness is qualified as an expert and his specialized knowledge "will assist the trier of fact to understand the evidence or to determine a fact in issue." Fed.R.Evid. 702. Expert testimony is admissible only if it is both relevant and reliable. Kumho Tire Co. v. Carmichael, 526 U.S. 137, 141 (1999) (citing Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993)). The court has a "gatekeeping" obligation to determine the admissibility of expert testimony. Id. However, rejection of expert testimony has been the exception rather than the rule. Fed.R.Evid. 702, advisory committee notes (Dec. 1, 2000). "Vigorous cross-examination, presentation of contrary evidence and careful instruction on the burden of proof are the traditional and appropriate means of attacking shaky but admissible evidence." Daubert, 509 U.S. at 595.
• Discussion
In their motion, defendants seek to exclude Mr. Mesecher's testimony on three separate grounds. First, defendants argue Mr. Mesecher's expert testimony is inadmissible where it is introduced to interpret contract language. Second, defendants argue Mr. Mesecher's testimony will not assist the trier of fact. Third, defendants argue Mr. Mesecher's testimony is contradictory and therefore, is inadmissible. Defendants do not attack Mr. Mesecher's qualifications as an expert or attack the reliability of the principles and methods he used to form his opinion. Instead, defendants attack only the relevance of Mr. Mesecher's opinion testimony to the issues in this case.
• Expert Testimony Introduced to Interpret Contract Language
"Absent any need to clarify or define terms of art, science, or trade, expert opinion testimony to interpret contract language is inadmissible." Koch v. Koch Indus., Inc., 2 F. Supp.2d 1385, 1401 n. 4 (D.Kan. 1998) (quoting N. Am. Specialty Ins. Co. v. Myers, 111 F.3d 1273, 1281 (6th Cir. 1997) (internal quotations omitted)). Although "[g]enerally, an expert should be allowed to explain the meaning of technical terms contained within technical documents," expert witness testimony introduced to address "[t]he expression of [a] witness' subjective intent" when entering into a document is "properly ruled out by the court." Int'l Paper Co. v. Standard Indus., Inc., 389 F.2d 99, 102 n. 2 (10th Cir. 1968).
Plaintiff seeks to introduce expert testimony regarding defendants' intent when entering into the September 30, 1998 exclusive agency contract and the August 24, 1998 letter of intent to purchase the aircraft. (Pl.'s Exp. Discl. (Doc. 32) at ¶ 1). Specifically, plaintiff seeks to offer expert testimony that the parties' dealings evidence an intent to establish an exclusive agency agreement. Mr. Mesecher's testimony would speak to the effect the parties intended their agreement to have. This is a task more properly performed by a fact finder. The court finds the proposed testimony invades the province of the jury as the ultimate finders of fact.
Defendants' motion is granted in part. The court orders paragraph 1 of Mr. Mesecher's expert report, as attached to plaintiff's expert witness disclosure, be stricken and precludes plaintiff from using Mr. Mesecher to introduce testimony regarding the parties' intent when entering into the contracts at issue here.
• Assist Trier of Fact
Expert testimony that does not assist the trier of fact "to understand the evidence or to determine a fact in issue" is inadmissible. Fed.R.Evid. 702; City of Hobbs v. Hartford Fire Ins. Co., 162 F.3d 576 (10th Cir. 1998). Rule 702 of the Federal Rules of Evidence provides:
If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of an opinion or otherwise, if (1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case.
Fed.R.Evid. 702 (as modified Dec. 1, 2000). Defendants argue that Mr. Mesecher's "specialized knowledge" in the field of aviation consultation will not assist the trier of fact in this case.
In determining whether the proferred expert's specialized knowledge will assist the trier of fact, the court will "`scrutinize' whether the `principles and methods' employed by an expert `have been properly applied to the facts of the case.'" Kumho Tire Co., 526 U.S. at 157 (quoting Advisory Committee's Note on Proposed Fed.R.Evid. 702, Preliminary Draft of Proposed Amendments to the Federal Rules of Civil Procedure and Evidence: Request for Comment 126 (1998)). Defendants do not attack the principles and methods employed by Mr. Mesecher or argue that they have been improperly applied to the facts of this case. Nor do the defendants attack the sufficiency of the facts or data upon which Mr. Mesecher's opinion is based. Instead, defendants argue that Mr. Mesecher does not establish an industry standard, and therefore, that his testimony is not relevant. Specifically, defendants argue that through his deposition testimony, Mr. Mesecher has established no industry standard exists. The court disagrees.
• Payment of Deposits by Brokers
Defendants first argue that Mr. Mesecher's deposition testimony conflicts with his proffered opinion that pursuant to general industry practice brokers are not required to pay deposits, and therefore, this testimony is not relevant. Specifically, defendants point to Mr. Mesecher's deposition, wherein he testified regarding the payment of broker deposits:
• Well, it's really up to the broker whether or not he's willing (sic) do that?
• Oh, yes. Sure.
• And if the broker is willing to do it, that's not unacceptable in your opinion, is it?
. . .
• Whatever the guy wants to do, it's his decision. It's not standard practice in the industry.
• But it's up to the individual broker whether or not he wants to agree to something of that type; is that your testimony?
• That's correct.
Defendant argues this testimony establishes that industry practice is, in fact, whatever the parties agree upon. Accordingly, defendants argue Mr. Mesecher's "specialized knowledge" regarding the buying and selling of aircraft is unnecessary and irrelevant.
The court is unpersuaded. Even assuming standard industry practice is determined by the parties' intent, the court finds it may assist the trier of fact to hear from an aviation consultant with fifteen years of experience in "negotiating and effecting approximately 300 transactions involving the purchase, sale or lease of commercial jet transport aircraft" (Pl.'s Exp. Rep. at 3), regarding his experience relating to the frequency with which broker deposits are required in the industry. The court, without the benefit of specific factual argument from either party on this issue, finds such testimony may aid the trier of fact in its resolution of the contested factual issues of whether "plaintiff reasonably relied upon defendants' promise to award to plaintiff the exclusive agency to negotiate and sell the Dodson Jet to TAME" (Pretrial Order at 16, ¶ 14), and whether "plaintiff was to be a purchaser of the subject aircraft or was only serving as a broker for the sale of the aircraft from Dodson to TAME." (Id. at 18, ¶ 35).
• Allowing Aircraft to Leave the Country Without Escrow
Defendants next argue that Mr. Mesecher's deposition testimony also conflicts with his proferred opinion that general industry practice dictates it is acceptable to allow aircraft to leave the country for maintenance without having the purchase price placed in escrow and, therefore, this testimony is not relevant. Specifically, defendants point to Mr. Mesecher's deposition, wherein he testified:
• Is it also the practice within the industry to not allow planes to leave the country until the full purchase price is paid?
• I'm sure there are cases where they haven't allowed the aircraft out unless the full price was paid.
• So, the industry practice is whatever the particular seller is agreeable to: is that correct?
• True. But the practice, meaning the more common is, yes, you don't worry about it. With an N registration on it, there's very little concern. It's not going to move, FA (sic) registration.
Defendant argues this testimony establishes that industry practice is, in fact, whatever the parties agree upon. Accordingly, defendants argue Mr. Mesecher's "specialized knowledge" regarding the buying and selling of aircraft is unnecessary and irrelevant.
Again, the court is unpersuaded. Even assuming the general industry practice is determined by the parties' intent, the court again finds it may assist the trier of fact to hear from an aviation consultant with fifteen years of experience in "negotiating and effecting approximately 300 transactions involving the purchase, sale or lease of commercial jet transport aircraft" (Pl.'s Exp. Rep. at 3), regarding his experience relating to the frequency with which escrow of an aircraft's purchase price is required prior to allowing a plane to depart the country. Again, without the benefit of specific factual argument from either party on this issue, the court finds such testimony may aid the trier of fact in its resolution of the contested factual issue of whether "defendants breached their fiduciary duty to plaintiff and acted in their own interest to the exclusion of plaintiff's interests" (Pretrial Order at 17, ¶ 31).
• Standard Industry Practice of Dealings Between Sellers and Brokers
Defendants finally argue that generally Mr. Mesecher's deposition testimony conflicts with his opinion regarding standard industry practice of dealings between sellers and brokers and specifically, that defendants' conduct in this case did not conform to such standard industry practices. Therefore, defendants argue such testimony is irrelevant. Specifically, defendants argue that the deposition testimony cited above reveals there is no "standard" industry practice. Defendants argue Mr. Mesecher's testimony supports the idea that standard industry practice is dictated by the parties' agreement as to the terms of their relationship. Accordingly, defendants argue Mr. Mesecher's "specialized" knowledge would not assist the trier of fact.
As defendants' argument here is an extension of its prior two arguments, the court is again unpersuaded. Even assuming the industry practice is determined by the parties' intent in their dealings, the court finds Mr. Mesecher's specialized knowledge in the area of aviation consulting may assist the trier of fact to determine the issues placed before it under the theories raised by the parties. For example, Mr. Mesecher's testimony may be probative on the contested issue of whether "plaintiff was to be a purchaser of the subject aircraft or was only serving as a broker for the sale of the aircraft from Dodson to TAME." (Pretrial Order at 18, ¶ 35). Defendants' motion on this issue is denied.
• Allegedly Contradictory Testimony
Defendant next argues Mr. Mesecher's proffered expert opinion regarding standard industry practice and his deposition testimony regarding standard industry practice, as outlined above, conflict with one another. Accordingly, defendants argue Mr. Mesecher's expert opinion is inadmissible. See Maddy v. Vulcan Materials Co., 737 F. Supp. 1528, 1532 (D.Kan. 1990) (excluding expert's affidavit because testimony within it conflicted with expert's prior deposition testimony).
The court is again unpersuaded. A review of Mr. Mesecher's deposition testimony reveals that the parties' ultimately may override a standard industry practice through their dealings. The court does not find Mr. Mesecher has testified that the standard industry practice is determined by the parties' intent in their dealings. Although the deposition testimony set forth by defendants in their motion may detract from any opinion Mr. Mesecher provides, the court does not find it directly contradicts his proferred expert opinion. Accordingly, the court denies defendants' motion on this issue.
Finally, the court notes plaintiff's expert testified during his deposition that he did not intend to offer an opinion as to whether the defendants had complete maintenance records for the aircraft when it was initially offered for sale or when it was inspected by the prospective purchasers.
• Order IT IS THEREFORE ORDERED that defendants' motion (Doc. 65) is granted in part. Paragraph 1 of Mr. Mesecher's expert report, as attached to plaintiff's expert witness disclosure, shall be stricken and plaintiff is precluded from using Mr. Mesecher to introduce testimony regarding the parties' intent when entering into the contracts at issue here.
Absent future objections or review by this court, Mr. Mesecher may offer testimony as outlined in his expert report at paragraphs 2, 4, 5 (excepting any testimony as to defendant Dodson's failure to have "complete" maintenance records on the aircraft when it was offered for sale, or when it was inspected by TAME representatives), and paragraph 6. IT IS SO ORDERED.
The court again notes plaintiff did not include a paragraph 3 in his submitted expert witness report.