Opinion
26869-21 26872-21 26874-21 26877-21
09-11-2023
ESTATE OF ROMAN J. FINNEGAN, DECEASED, KEVIN C. TANKERSLEY, PERSONAL REPRESENTATIVE & LYNNETTE FINNEGAN, ET AL., Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER
Joseph W. Nega Judge
These consolidated cases were called for trial on August 14 and 15, 2023, at a special session of the Court in Indianapolis, Indiana. On August 3, 2023, respondent filed a Motion in Limine to Exclude from Evidence the Report and Affidavit of James Douglas Bremner, M.D. (Bremner motion). By Order issued August 11, 2023, the Court took the Bremner motion under advisement and directed petitioners to offer Dr. Bremner's report and testimony as an offer of proof. At trial, the parties appeared and were heard on the Bremner motion.
On August 3, 2023, respondent filed a First Amendment to Motion in Limine to Exclude from Evidence the Report and Affidavit of James Douglas Bremner, M.D., and, on August 23, 2023, respondent filed a Second Amendment to Motion in Limine to Exclude from Evidence the Report and Affidavit of James Douglas Bremner, M.D.
I. Discussion
Proceedings in this Court are conducted in accordance with the Federal Rules of Evidence (FRE). See § 7453; Rule 143. Relevant evidence is generally admissible under FRE 402. FRE 401 provides that evidence is relevant if "it has any tendency to make a fact more or less probable than it would be without the evidence" and "the fact is of consequence in determining the action."
Unless otherwise indicated, statutory references are to the Internal Revenue Code, Title 26 U.S.C., in effect at all relevant times, and Rule references are to the Tax Court Rules of Practice and Procedure.
Testimony by expert witnesses is governed by FRE 702 and 703. FRE 702 provides that a witness who is "qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion" if his testimony will help the trier of fact and the following conditions are met: (1) the testimony is based on sufficient facts or data; (2) the testimony is the product of reliable principles and methods; and (3) the expert has reliably applied the principles and methods to the facts of the case. Testimony based on scientific, technical, or other specialized knowledge is subject to the Court's gatekeeping function, which forecloses expert testimony that does not "rest[] on a reliable foundation" or is not "relevant to the task at hand." Daubert v. Merrill Dow Pharm., Inc., 509 U.S. 579, 597 (1993); see Kumho Tire Co. v. Carmichael, 526 U.S. 137, 149 (1999) (extending the principles of Daubert to all expert testimony). The Court has broad discretion in the exercise of this gatekeeping function. See Trimmer v. Commissioner, 148 T.C. 334, 351 (2017); Neonatology Assocs., P.A. v. Commissioner, 115 T.C. 43, 85 (2000), aff'd, 299 F.3d 221 (3d Cir. 2002).
In this Court, an expert report is "received in evidence as the direct testimony of the expert witness." Rule 143(g)(2). Generally, an expert report is not admissible if it does not assist the Court in understanding the facts and contains improper conclusions as to issues of law. See, e.g., Hosp. Corp. of Am. v. Commissioner, 109 T.C. 21, 59 (1997); Laureys v. Commissioner, 92 T.C. 101, 129 (1989). To the extent that an otherwise helpful and admissible expert report expresses an improper legal conclusion, we will disregard it. See Hosp. Corp. of Am., 109 T.C. at 59; see also Kreit Mech. Assocs., Inc. v. Commissioner, 137 T.C. 123, 131-32 (2011) (allowing expert report with improper legal conclusion into evidence due to report's value in facilitating Court's understanding of factual issues).
In the Bremner motion, respondent seeks to exclude from evidence the report, affidavit, and testimony of petitioners' expert witness, James Douglas Bremner, M.D., on three separate grounds. First, respondent contends that, because Dr. Bremner's report was authored in March 2020 (almost three years after the settlement of petitioners' claims), it could not have served as a basis of settlement and thus lacks relevancy as to whether the settlement was paid in lieu of damages for physical injury or physical sickness within the meaning of section 104(a)(2). Second, respondent characterizes Dr. Bremner's report as improper advocacy, pointing in part to his conclusion that post-traumatic stress disorder is a physical sickness and the fact that he issued his preliminary report prior to interviewing petitioners. Third and finally, respondent argues that Dr. Bremner's report should be excluded under Daubert, because his conclusions are speculative, unreliable, and not based upon use of the scientific method. Petitioners oppose the Bremner motion on all three grounds.
We agree in part with respondent as to the relevancy objection. The Bremner report and affidavit include Dr. Bremner's diagnoses in 2020 of several of the petitioners as having post-traumatic stress disorder (PTSD). Those post-hoc diagnoses lack relevancy to the question of whether petitioners' settlement in 2017 was paid in lieu of damages for physical sickness or injury. We will thus grant the Bremner motion in part as to Dr. Bremner's diagnoses of petitioners. Therefore, those portions of the report, affidavit, and testimony regarding the 2020 diagnoses of petitioners are excluded from the record.
However, those elements of the report, affidavit, and testimony not directly related to Dr. Bremner's diagnoses of petitioners are a closer call. Out of an abundance of caution, we will deny respondent's motion and admit the remaining portions of the Bremner report, affidavit, and testimony.
Accordingly, it is
ORDERED that respondent's Motion in Limine to Exclude from Evidence the Report and Affidavit of James Douglas Bremner, M.D., filed August 3, 2023, as amended, is granted in part as to the portions of the Affidavit of J. Douglas Bremner, M.D., filed June 5, 2023 (Dkt. #36), the Expert Report of J. Douglas Bremner, M.D., filed June 6, 2023 (Dkt. #37), and Dr. Bremner's trial testimony that address Dr. Bremner's diagnoses of petitioners, and is denied in part, as to the remaining portions of the Affidavit of J. Douglas Bremner, M.D., filed June 5, 2023 (Dkt. #36), the Expert Report of J. Douglas Bremner, M.D., filed June 6, 2023 (Dkt. #37), and Dr. Bremner's trial testimony. It is further
ORDERED that Trial Exhibit 79-P is admitted into evidence.