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Univ. of South Carolina School of Law

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Saturday, December 12, 2009

The Areas Of My Expertise: Fifth Circuit Reverses Expert Witness Ruling In Hurricane Katrina Related Appeal

Federal Rule of Evidence 701 provides that

If the witness is not testifying as an expert, the witness' testimony in the form of opinions or inferences is limited to those opinions or inferences which are (a) rationally based on the perception of the witness, and (b) helpful to a clear understanding of the witness' testimony or the determination of a fact in issue, and (c) not based on scientific, technical, or other specialized knowledge within the scope of Rule 702.

As the Advisory Committee Note to the amendment to Rule 701 makes clear, Rule 701(c) was added in the wake of the Supreme Court's opinion in Daubert v. Merrdll Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), "to eliminate the risk that the reliability requirements set forth in Rule 702 will be evaded through the simple expedient of proffering an expert in lay witness clothing." The Advisory Committee Note goes on to indicate, however, that

most courts have permitted the owner or officer of a business to testify to the value or projected profits of the business, without the necessity of qualifying the witness as an accountant, appraiser, or similar expert. See, e.g., Lightning Lube, Inc. v. Witco Corp. 4 F.3d 1153 (3d Cir. 1993) (no abuse of discretion in permitting the plaintiff's owner to give lay opinion testimony as to damages, as it was based on his knowledge and participation in the day-to-day affairs of the business). Such opinion testimony is admitted not because of experience, training or specialized knowledge within the realm of an expert, but because of the particularized knowledge that the witness has by virtue of his or her position in the business. The amendment does not purport to change this analysis.

Despite the latter portion of the Note, in its recent opinion in Pendarvis v. American Bankers Ins. Co. of Florida, 2009 WL 4250686 (5th Cir. 2009), the Fifth Circuit found that a contractor could not testify as a lay witness about the estimated cost to repair a mobile home damaged by Hurricane Katrina.

In Pendarvis, the plaintiffs owned a 1999 Crimson 28 x 70 mobile home, and the defendant issued a policy covering the plaintiffs' mobile home for losses caused by, among other things, windIn August 2005, the mobile home was damaged by Hurricane Katrina, and the district court found after a bench trial that following Hurricane Katrina:

[p]laintiffs entered the home to find water coming through all of the windows and wet walls and carpet in almost every room. The utility room had leaves in the vent over the dryer; the kitchen had water running out of the cabinets, the microwave, and the stove; there was water dripping on the floor and standing on top of cabinets. The dining room had water damage inside the window sills; the fascia board was receding from the ceiling; the crown molding was coming off of the archway; the living room had water dripping from the ceiling; the walls and ceiling were bubbling; the master bedroom had water in the window sills; the master bathroom had water pouring through the ceiling; the vent was yellow from water; the track lights were popping. Plaintiffs did not have power for three days, and the electrical panel on the mobile home had to be changed for fear that it would cause a fire. None of these conditions existed prior to Hurricane Katrina.  

The plaintiffs filed a claim with the defendant for the damage, and the defendant's inspector inspected the mobile home and determined that the plaintiffs were only entitled to $4,704.83. The plaintiffs thereafter had contractor Leroy Young inspect the mobile home, and he estimated that the cost of repairing the mobile home would be $71,500. The plaintiffs then sent a detailed description of Young's estimate to the defendant, but the defendant believed Young's estimate was too high and refused payment. The plaintiffs thus sued the defendant but failed to timely furnish Young's expert report, so "the district court refused to allow plaintiffs to call Young as an expert." The court, however, "did allow Young to give his $71,500 repair estimate as a lay witness."

On appeal, the Fifth Circuit disagreed, despite the Advisory Committee Note to the amendment to Rule 701, finding

that Young's $71,500 estimate to repair the mobile home resulted from his knowledge as a specialist in the field of building construction and repairs. Young's repair costs estimate required, at a minimum, Young to forecast the amount, type, and costs of materials needed, as well as the amount of labor required to complete the long list of repairs. These forecasts are not common knowledge, "familiar in everyday life."  They require specialized knowledge of construction and repair work. Because specialized, technical knowledge was required, we find the district court abused its discretion in allowing Young's lay testimony.

While it's a close call, I think that I agree with the Fifth Circuit. Indeed, at trial, the plaintiffs themselves offered Young as an expert witness but failed to timely furnish his expert report.

-CM

http://lawprofessors.typepad.com/evidenceprof/2009/12/701cpendarvis-v-american-bankers-ins-co-of-floridaslip-copy-2009-wl-4250686ca5-la2009.html

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