Commercial Litigation and Arbitration

Distinguishing Rule 701 from 702 Testimony — Failure to Provide Report Bars Expert Testimony under 702 but Not Lay Opinion under 701 — Amended 26(a)(1) Disclosure Filed After Discovery But Within Pretrial Order Deadline Is Timely

From Braun Builders, Inc. v. Kancherlapalli, 2010 U.S. Dist. LEXIS 48691 (E.D. Mich. May 18, 2010):

Braun's first motion in limine seeks to exclude the testimony of Gregory Guza, contending that Guza should not be permitted to testify as an expert at trial because he was not timely disclosed as a witness and an expert report was not provided. The Kancherlapallis' initial disclosures included only one expert witness, Dr. Frank P. Stafford. On February 4, 2010, the Court granted Braun's motion to strike Stafford from the witness list and prohibit his testimony at trial because the expert report required by Federal Rule of Civil Procedure 26(a)(2)(B) and the scheduling order *** was not provided on time. The order notes that "expert witnesses may not be called [to testify at trial] unless an expert report is timely provided." Fed. R. Civ. P. 37(c). On January 29, 2010, a month after discovery closed, the Kancherlapallis submitted amended initial disclosures. The amended disclosures included Guza on the witness list for the first time. The Kancherlapallis have not provided a Rule 26(a)(2)(B) report on Guza's testimony, contending instead that he is not an expert witness.

Guza is a general contractor, presumably a licensed professional, from Cass City who has consulted with the Kancherlapallis concerning the cost of finishing the remodeling project and remedying problems allegedly caused by Braun. Guza has built homes in the past and also constructed a medical facility in Caseville. Although Guza was not added to the Kancherlapallis' witness list until January 19, 2010, Sharon Kancherlapalli mentioned his name at her deposition in October 2009, noting that he had prepared estimates to complete the unfinished remodeling project and conduct necessary repairs. After the deposition, Braun requested documents, e-mails, and other correspondence related to the Guza estimate. When the Kancherlapallis refused to provide those materials, Braun filed a motion to compel discovery on December 15, 2009.... The motion to compel was granted by Magistrate Judge Binder on January 15, 2010, two weeks before the Kancherlapallis amended their witness list to include Guza as a witness.

Guza's cost estimate *** indicates that his company, working with a four-man crew, could have completed the work performed by Braun in ten weeks at the cost of $ 138,000. *** The estimate does not provide information on Guza's estimating methodology, measurements, or assumptions. It is not clear whether the Kancherlapallis consulted with Guza to prepare for litigating this case, or if the consultation was based on a genuine search for a new contractor to complete the job.***The only challenge initiated by Braun relates to whether Guza was properly disclosed as a witness under Rule 26.

If Guza were intended as an expert witness, an expert report would have been required by October 30, 2009. The Kancherlapallis concede that they never provided an expert report to Braun. Indeed, Guza was not disclosed as a witness until January 29, 2010, the same day motions challenging experts were due. Accordingly, pursuant to Federal Rules of Civil Procedure 26(a)(2) and 37(c), Guza may not testify at trial as an expert witness. As a result, if he does testify, he may not provide an opinion that is "based on scientific, technical, or other specialized knowledge." Fed. R. Evid. 701. The question, then, is whether the testimony Guza proposes to provide requires technical or specialized knowledge. Federal Rule of Evidence 701 was amended in 2000 "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." Fed. R. Evid. 701 advisory committee notes (2000).

[A] witness' testimony must be scrutinized under the rules regulating expert opinion to the extent that the witness is providing testimony based on scientific, technical, or other specialize knowledge . . . . By channeling testimony that is actually expert testimony to Rule 702, the amendment also ensures that a party will not evade the expert witness disclosure requirements set forth in Fed. R. Civ. P. 26 . . . by simply calling an expert witness in the guise of a layperson.

Id. (citing Gregory P. Joseph, Emerging Expert Issues Under the 1993 Amendments to the Federal Rules of Civil Procedure, 164 F.R.D. 97, 108 (1996) ("[T]here is no good reason to allow . . . suprise expert testimony.")). The rules, then, require courts to distinguish between lay and expert testimony. "[L]ay testimony 'results from a process of reasoning familiar in everyday life,' whereas 'an expert's testimony results from a process of reasoning which can be mastered only by specialists in the field.'" United States v. White, 492 F.3d 380, 401 (6th Cir. 2007) (citing State v. Brown, 836 S.W.2d 530, 549 (Tenn. 1992)). The distinction, however, is "far from clear." Id. Accordingly, a computer technician charged with running commercially available software and analyzing the results is an expert, United States v. Ganier, 468 F.3d 920 (6th Cir. 2006), but a physician testifying as to whether another physician has complied with the norms of professional medical practice is not, United States v. Wells, 211 F.3d 988 (6th Cir. 2000).

[Footnote 1] Wells was decided before the 2000 amendments to the rules, and the court did not explicitly hold that the physician's proposed testimony was not expert opinion. Rather, it held that the physician could apply his "specialized knowledge" to his testimony as a fact witness. White, 492 F.3d at 491. The 2000 amendments may have demanded a different result.

As the Sixth Circuit has emphasized, the key to making a proper determination is to focus not on the witness, but on the testimony the witness intends to provide. *** Accordingly, Guza may testify as a lay witness concerning his personal knowledge of the facts of this case. He may testify, for example, that he inspected the house and noted it was missing shingles from the roof, that the interior framing was only partially completed, or that windows in front of the house were eighteen inches from the floor. He may not, however, apply the technical and specialized knowledge he has gained through his years of training and experience as a construction contractor to explain how much it would cost to remedy particular construction defects. Such testimony fits into Rule 702 and requires proper disclosures and an expert report before it will be admitted.

While it is easy enough to articulate the standard, drawing the line between the testimony Guza may offer and that which he may not will be difficult during the trial. Accordingly, it is appropriate to provide some ground rules in advance. Guza may not provide cost estimates for labor and materials already completed or the estimated labor and materials necessary to finish the project to the specifications the Kancherlapallis believed they were purchasing. Guza may testify to facts, including what he observed when he inspected the home, applicable building codes, and general practices in the construction industry. He may not, however, apply those facts to Braun's conduct in this case. For example, he may not testify as to whether, in his opinion, the home in general or particular aspects of its construction comply with code or whether Braun's conduct in bidding and performing the job is in compliance with general industry standards.

In short, to the extent Guza provides opinion testimony, it must be an opinion that is admissible under Rule 701. An opinion that is "(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." Fed. R. Evid. 701. It may not, however, be an opinion "based on scientific, technical, or other specialized knowledge within the scope of Rule 702." ***

Braun also challenges Guza's qualifications to testify as a lay witness under the disclosure provisions of the Federal Rules of Civil Procedure. Rule 26(a)(1) requires the exchange of initial disclosures, including the name and address of every individual a party believes may have discoverable information. It does not require disclosure of lay witnesses. The scheduling order and Rule 26(a)(3) require that lay witnesses be disclosed by March 26, 2010. Guza was identified as a probable witness on January 29, 2010, two months before the deadline. Moreover, Guza was identified as a person who was likely to have discoverable information during Sharon Kancherlapalli's deposition. Accordingly, his identity was "made known" to Braun in October 2009. Fed. R. Civ. P. 26(e)(1)(A). Guza may testify as a lay witness.

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