Summary
finding the proposed testimony of an “expert” to be inadmissible but making no claim that expert testimony is required to show damages
Summary of this case from Fabozzi v. Lexington Ins. Co.Opinion
01 Civ. 10137 (LAK)
January 5, 2004
ORDER
In anticipation of the commencement of the damages portion of the trial, defendants have challenged the admissibility of the proposed testimony of five of plaintiff's proposed expert witnesses and plaintiff has reciprocated by challenging that of one of defendants'. The Court conducted a three day in limine hearing on December 15-17, 2003. Having considered the evidence, the Court rules as follows: George Laibe
A subsequent ruling will dispose of the objections to the proposed testimony of Mr. Battaglia.
Plaintiff proposes to offer opinions of George Laibe as to the costs of rebuilding the Thunderbolt and repairing it on November 16, 2000 to operating condition. Defendants challenge Mr. Laibe's expertise as well as the relevancy of both of these opinions.
Qualifications
In order to evaluate Mr. Laibe's expertise, it is necessary first to understand what he did. He and others obtained the original drawings of the roller coaster, entered the information into an AutoCAD program, did a quantities take-off from the program, reviewed photographs, and developed a list of the materials required to replicate the roller coaster. On the basis of his prior experience, he then estimated the number and cost of man hours necessary to construct a new roller coaster and other costs. Hearing Tr. ("HT") 34-40, 90. He did much the same thing in estimating the repair cost, but here he was severely limited because the roller coaster had been destroyed before he was engaged and he therefore had only a number of photographs, showing only limited portions of the roller coaster, from which to work. Id. 40-89.
AutoCAD stands for automated computer assisted design.
Rule 702 permits testimony by a person "qualified as an expert by knowledge, skill, experience, training, or education . . ." Mr. Laibe has had no education or formal training in engineering, construction, or cost estimating. He began as a construction laborer and has spent some years working in the amusement industry, broadly defined. He later was employed for approximately one and one-half to two years as vice president of marketing and sales for Roller Coaster Corporation of America in which capacity he had some involvement in developing budgets for construction of wooden roller coasters. Subsequently, he was involved in a firm called The Coaster Works, which built two wooden roller coasters. He prepared budgets and pricing for both based on "the quantities that were given to [him] from the plan and profile by the design engineers." HT 15-16.
The extent to which Mr. Laibe actually developed budgets and performed related tasks relevant to his proposed testimony is not entirely clear. See HT 12-13.
The Court has no doubt that Mr. Laibe is qualified to take a bill of materials generated by design engineers for a roller coaster construction project and, using that starting point, to develop a cost estimate for the materials needed for the construction as well, perhaps, as other costs. It is not so clear that he is qualified to generate a bill of materials from original construction drawings, with or without an Auto CAD program. It is still less clear that he is qualified to give, from fragmentary photographs, a helpful opinion as to the extent of the repairs that were necessary to render the roller coaster operational. Compare Thorp v. American Aviation and General Insurance Co., 212 F.2d 821, 826 (3d Cir. 1954) (building contractor familiar with destroyed structure prior to its destruction who inspected and measured remains after fire qualified to give opinion as to replacement cost). But defendants did not fully develop these points during the hearing. Nevertheless, the Court is not prepared at this juncture to exclude his testimony on this ground for two reasons. First, "[t]he standard for qualifying expert witnesses is liberal." 4 Weinstein's Federal Evidence § 702.04[1] [a], at 702-42 (2003). Second, in view of the fact that the cost of repairs must be estimated from photographs in consequence of the City's tortious action, some liberality in the proof of the amount of damages is warranted. See, e.g., Cullen v. Nassau County Civil Service Comm., 52 N.Y.2d 492, 497, 442 N.Y.S.2d 470, 473 (1981). In consequence, the better course of action is to decline in advance of the damages trial to exclude Mr. Laibe's testimony on this ground but to deal with any issues at trial or, perhaps, after verdict. Relevancy
Defendants posit that the proper measure of damages is the lesser of the cost of restoring the property to its former condition and the diminution, if any, in the market value of the property by reason of the trespass. Def. Mem. 1. As Mr. Laibe does not propose to testify directly to either point, they argue, his testimony is irrelevant.
Assuming arguendo that the defendants are correct on the measure of damages, they nevertheless overlook the significance of the proposed testimony. It at least is arguable that the cost of restoring the roller coaster to its former condition — the dilapidated and inoperable condition in which it stood immediately prior to demolition — is approximately equal to the difference between the cost of rebuilding it from scratch and the cost of bringing the roller coaster, in its former condition, up to operable condition.
Doris Silber
Ms. Silber is a licensed real estate appraiser whom plaintiff offers to give her opinions as to the value of the land on which the roller coaster was situated and as to the appropriate method for valuing the roller coaster. Defendants challenge her testimony on the ground that her opinions are unreliable in that they are based upon incorrect legal and factual assumptions, viz. that the roller coaster had been declared a landmark and that it was "specialty property" as a matter of law.
As Ms. Silber admitted at the hearing, the roller coaster never was "landmarked" and her report, to that extent, simply was wrong. HT 270. She contended, however, that this error did not affect her opinion because she appraised the land as if it were vacant. Id. 275. This then is an issue going to the weight rather than the admissibility of her testimony.
As for the defendants' other argument, it is reasonably clear that Ms. Silber has used language loosely in referring to special purpose property (a real estate appraisal term) and specialty property (a legal term of art). She will not be permitted to testify to legal conclusions or offer opinions on the law. There is no reason, however, why she should not be able to give her opinion that the roller coaster was special purpose property to the extent, if any, that this is relevant to her opinion as to the appropriate method for valuing that structure.
Tony M. Small
Plaintiff proposes to call Mr. Small, a mechanical engineer, to testify that, in his opinion, it would be acceptable for one rebuilding the roller coaster to have experienced steel workers inspect the existing steel for corrosion and to replace any member that appeared questionable. See HT 110, 114-19, 122. Defendants object on the ground that he was identified too late and that they never had an opportunity to take his deposition. Implicit in this is the failure of plaintiff to serve an expert report with respect to this witness under Rule 26.
At this point, defendants have had the benefit of Mr. Small's testimony at the in limine hearing. While this is not the equivalent of a deposition, particularly in the absence of a Rule 26 report, it is better than nothing. In all the circumstances, the Court will not exclude Mr. Small's testimony as to his opinion, as a mechanical engineer, that it would be appropriate for one rebuilding the roller coaster to have experienced steel workers inspect the existing steel for corrosion and to replace any member that appeared questionable as distinguished from using an engineer or other methods to determine the reusability of existing steel. His testimony, however, will be limited to that precise point and will not be allowed to wander, as it did at the hearing, into his opinions concerning such matters as the proportion of the steel in the roller coaster that would have proved reusable had this method been employed or as to how he would have done the job.
Bruce Davidson
Plaintiff proposes to call Bruce Davidson to give his opinions concerning (a) the cost to bring the Thunderbolt, as it existed prior to the demolition, to working order (i.e., repair cost), (b) the cost of rebuilding the Thunderbolt, (c) the value of the Thunderbolt as it stood immediately prior to the demolition, (d) the "historic value" of the Thunderbolt, (e) the value of the so-called Kensington Hotel, a derelict wood structure with unrepaired fire damage, prior to its demolition, (f) the cost to repair the Kensington Hotel, as it existed prior to the demolition, to operable condition, (g) the cost of rebuilding the Kensington Hotel, and (h) the "historic value" of the Kensington Hotel. Defendants challenge Mr. Davidson as unqualified. They contend that his prefferred testimony is neither reliable nor based on appropriate foundations.
Mr. Davidson holds an associate degree in business from the University of Texas at Arlington and has worked in the amusement industry for years, starting as a 16-year old ride operator. HT 131-32. He has no training as a financial analyst. Id. 201. He has had significant experience in the theme park business, especially as a safety administrator and a supervisor of park rides, and has had a certain amount of budgeting experience. He also has been involved in selling and installing amusement park rides, including roller coasters, and has had some experience with repair of rides. He worked with George Laibe in assessing the extent to which materials in the Thunderbolt, as it stood prior to demolition, could be used in the course of repairing it to operating condition. Id. 158-59. The Court deals with the elements of the proposed testimony seriatim.
1. As nearly as can be understood, Mr. Davidson claims that he generated a "historic value" for the Thunderbolt of $1.5 million by assuming that the roller coaster had been repaired, estimating the ridership and operating performance of a "generic" roller coaster on the site, adding to it the incremental ridership that would have been generated by the fact that the ride was the "original" Thunderbolt, assuming that additional revenue producing operations such as food service would be built on the site, and constructing a business model that projected seasonal earning of $3.4 million. HT 160-87; DX W; DX W-1.
This testimony is patently inadmissible. To begin with, the Court is not satisfied that Mr. Davidson is qualified to offer opinions as to the historical value of anything or to project the operating results of a hypothetical business such as this, let alone the incremental ridership that would have been generated by an "historic" as opposed to a "generic" new roller coaster. While he had some experience running rides in established theme parks, there is a considerable difference between budgeting for such operations and forecasting the operations of an amusement ride that has been out of business since 1982 or 1983, not to mention the operations of ancillary businesses that never have operated. In view of his lack of education in this area and the lack of reliance on any data customarily relied upon by experts in such a field, there is no basis for putting this sort of testimony in front of a jury. But there are still more flaws. Mr. Davidson offered no connection between his "historic value" of $1.5 million and the projected business model with its supposed earnings of $3.4 million. Nor did he separate out what part of the $3.4 million figure, whatever its merits, would have been realized irrespective of whether there were a new roller coaster on the site or a repaired Thunderbolt. Much more could be said, but no useful purpose would be served by prolonging this order. Mr. Davidson will not be permitted to testify to any "historic value" of the Thunderbolt. As far as the Court can see, the "historic value" is a figure plucked from the air.
2. Mr. Davidson assisted Mr. Laibe in preparing the repair cost estimate. The starting point was Mr. Laibe's "new coaster budget." HT 158. They evaluated the photographs and assigned percentages of what they believed could be reused. Id. 159, 165-66, 188-89. Mr. Davidson testified that in his opinion, it would have cost $5.1 million to repair the Thunderbolt to operable condition in November 2000. Id. 166. What remains unclear, notwithstanding the hearing, is whether Mr. Davidson independently generated that estimate and, if so, by what means, as opposed to taking Mr. Laibe's estimate of the cost of building a new roller coaster to the Thunderbolt design, estimating the extent to which components of the Thunderbolt could have been used, reducing the cost of a new roller coaster by the cost of replacing the reusable components, and then characterizing the difference between the cost of new construction and the cost as new of the salvageable components as a "repair" cost.
If Mr. Davidson independently generated the repair cost estimate, the means by which he did and his qualifications for doing so remain obscure and will have to be addressed at trial. If he is to be called simply to say that he agrees with the salvageability estimates employed by Mr. Laibe, with Mr. Laibe's methodology, and with his result, the Court sees no present basis for excluding the testimony as to the repair cost estimate.
3. It is unclear from the hearing testimony whether Mr. Davidson had any material role in generating the $8.4 million cost for rebuilding the Thunderbolt that appears in DX W, although it appears that he probably relied on Mr. Laibe for that figure. The Court therefore lacks a sufficient basis for ruling now on the admissibility of any opinion by Mr. Davidson on that point.
4. Mr. Davidson opined that the value of the Thunderbolt, as it stood immediately prior to the demolition (a figure referred to in DW W as the "appraised value"), was approximately $2.1 million (disregarding the "historic value" figure discussed previously). E.g., HT 185. He derived this figure by subtracting from the cost of building a new roller coaster to the Thunderbolt design ( see ¶ 3) the cost to repair it ( see ¶ 2). See HT 192. The admissibility of this testimony depends upon the extent to which Mr. Davidson's testimony concerning the cost of building a new roller coaster and the repair cost is admissible. For reasons discussed in paragraphs 2 and 3, that cannot now be determined.
5. The Court ruled during the hearing that Mr. Davidson's proposed testimony regarding the so-called Kensington Hotel is inadmissible, essentially on the ground that the opinions expressed in his report are not his, but those of a Mr. Procter, an independent consultant whom he engaged to prepare these estimates. HT 213-14, 222-23, 230-31. While an expert often may rely upon the expert opinion of another in formulating his own opinion, the hearing made clear that Mr. Davidson has no expertise in this area, little information upon which to base any opinion, and no real understanding of the nature of the structure at issue. Id. 212-23. The estimates in the report included, for example, the cost of an HVAC system despite the fact that Mr. Davidson did not know whether the demolished structure was so equipped, Id. 220, the cost of an electrical system although he did not know if the building had been electrified, Id., the cost of dry wall although he never had seen any photographs of the interior, Id. 221, the cost of cabinets although he did not know if there had been any cabinets in the building, Id., and so on. Compare Thorp, 212 F.2d at 826 (upholding receipt in evidence of opinions as to value of personal property destroyed in fire predicated on detailed description of the destroyed property by one fully familiar therewith).
Max Rosin
The Court adheres to its ruling at the close of the hearing with respect to plaintiff's application to preclude the testimony of Mr. Rosin. HT 403-04.
SO ORDERED.