Bazarian Int'l Fin. Assocs., LLC v. Desarrollos Aerohotelco, C.A.

• Decision Date: 25 April 2018
• Docket Number: Civil Action No. 13–1981 (BAH)
• Citation: 315 F.Supp.3d 101
• Parties: BAZARIAN INTERNATIONAL FINANCIAL ASSOCIATES, LLC, Plaintiff, v. DESARROLLOS AEROHOTELCO, C.A., et al., Defendants.
• Court: U.S. District Court — District of Columbia

315 F.Supp.3d 101

BAZARIAN INTERNATIONAL FINANCIAL ASSOCIATES, LLC, Plaintiff,

v.DESARROLLOS AEROHOTELCO, C.A., et al., Defendants.

Civil Action No. 13–1981 (BAH)

United States District Court, District of Columbia.

Signed April 25, 2018

Jesse Jenike–Godshalk, Pro Hac Vice, Thompson Hine LLP, Cincinnati, OH, David Andrew Wilson, Eric N. Heyer, Karyna Valdes, Thompson Hine LLP, Washington, DC, for Plaintiff.

Marisol Vilasuso, Pro Hac Vice, Wilfredo A. Rodriguez, Pro Hac Vice, Jennifer N. Hernandez, Pro Hac Vice, Avila Rodriguez Hernandez Mena & Ferri LLP, Coral Gables, FL, Charles Wheeler Chotvacs, Loss, Judge & Ward, LLP, Washington, DC, for Defendants.

MEMORANDUM OPINION

BERYL A. HOWELL, Chief Judge

Pending before the Court is the defendants' Daubert Motion in Limine to Exclude the Testimony & Reports of Williston H. Clover ("Defs.' Mot."), ECF No. 65. The plaintiff originally offered Clover as an expert to opine on what appears to be eleven distinct topics, for which the plaintiff asserted expert testimony would be relevant and aid the jury in resolving disputed issues between the parties. See generally Pl.'s Opp'n Defs.' Daubert Mot. Lim. Exclude Test. & Report Williston H. Clover ("Pl.'s Opp'n"), ECF No. 69. At the pre-trial conference, as clarified in a subsequent notice, the plaintiff withdrew three of those topics. Pl.'s Notice of Withdrawal of Portions of the Expert Report & Rebuttal Expert Report of Williston H. Clover ("Pl.'s Not."), at 1–2, ECF No. 95. The defendants assert that Clover is unqualified to offer expert testimony and failed to submit a report that complies with Rule 26(a)(2)(B) of the Federal Rules of Civil Procedure, and, in any event, that Clover's opinions are irrelevant, go to matters of common understanding, rest on unreliable data and methods, and are unduly prejudicial in light of their probative value. See Defs.' Mot. For the reasons that follow, the defendants' motion is granted in part and denied in part.

I. FACTUAL BACKGROUND

The Court's prior Memorandum Opinion denying the defendants' motion to dismiss the plaintiff's breach of contract claim, see Bazarian Int'l Fin. Assocs., LLC v. Desarrollos Aerohotelco, C.A. , 168 F.Supp.3d 1, 24 (D.D.C. 2016), as well as the Court's Memorandum Opinion dismissing the plaintiff's prior lawsuit against the defendants' alleged predecessor entity, Bazarian Int'l. Fin. Assocs., LLC v. Desarrollos Aerohotelco, C.A. , 793 F.Supp.2d 124, 125–27 (D.D.C. 2011), lay out in detail the present dispute's factual background and, thus, will not be recounted again here. In summary form, the plaintiff alleges that the defendants have breached a written Agreement requiring payment of a fee to the plaintiff for facilitating the financing for construction and operation of the Ritz–Carlton Hotel in Aruba. Under the Agreement, the plaintiff was to "perform exclusive investment banking services," requiring the plaintiff to, among other things, (1) "structure the financial package for the Project and prepare [a] self-contained Information Memorandum, including total project costs, proper debt/equity ratios, and projected investor returns," and (2) "conduct negotiations with" various institutional lenders "to secure, on a best efforts basis, financing for the project." Amend. Compl., Ex. A, Agreement §§ 1.C, 1.D, ECF No. 13–1; see also id. § 1.D (providing that the plaintiff "will act as the Company's exclusive advisor and investment banker in working with financial institutions, investors, and funding sources to raise the debt financing for the Company.").

In consideration for these services, the Agreement provided that the plaintiff would receive a "debt fee" to be "based on a flat two percent (2%) of the gross amount of the debt financing provided to the Project, net of" certain amounts not at issue here. Id. § 2.C. Such fees "are due and will become payable only upon the earlier of the first draw-down of funds and/or the first infusion of equity capital, provided that financing has been committed to the Project as a result of the efforts of Bazarian International." Id. § 2.D. "Bazarian International will still be entitled to the ... fee[ ]," pursuant to the Agreement, "if the financing for the Project is concluded within thirty-six (36) months following the termination of this Agreement from sources introduced to the Project by Bazarian International." Id. § 3. Finally, the Agreement directed that "[t]he Agreement will immediately become part of the relevant loan documents, management agreements, joint-venture agreements, guaranty agreements, bridge loan facilities and Memorandum of Association for this Project amongst and between the equity shareholders and lenders." Id.

The defendants timely filed the pending motion in limine, see Scheduling Order, dated Nov. 14, 2017, and, following oral argument at the final Pre–Trial Conference on April 20, 2018, this motion is now ripe for consideration before the trial scheduled to begin with jury selection, on May 7, 2018.¹

II. DISCUSSION

The defendants challenge the admissibility of Clover's testimony on four grounds. First, the defendants argue that Clover is unqualified to provide his proposed expert testimony and relies on unsound methodology. Second, the defendants argue that Clover failed to submit a report compliant with Rule 26(a)(2)(B) of the Federal Rules of Civil Procedure, requiring his testimony's exclusion. Third, the defendants argue that the testimony Clover proposes to provide goes to matters that do not call for expert opinion and thus is not relevant. Finally, the defendants argue that Clover's proposed testimony is unduly prejudicial in light of its probative value and thus merits exclusion. Each of these arguments is addressed in turn.

A. CLOVER'S QUALIFICATIONS AND RELIABILITY OF HIS METHODOLOGY

The defendants challenge Clover's credentials and methodology as a basis for excluding his proposed expert testimony. For the reasons that follow, Clover's qualifications are sufficient to satisfy the requirements of Rules 702 and 703.

"A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise" only if four conditions are met: (1) "the expert's scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue," (2) "the testimony is based on sufficient facts or data," (3) "the testimony is the product of reliable principles and methods," and (4) "the expert has reliably applied the principles and methods to the facts of the case." FED. R. EVID. 702. In Daubert v. Merrell Dow Pharmaceuticals, Inc. , 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993), the Supreme Court articulated a "two-prong analysis" under Rule 702"that centers on evidentiary reliability and relevancy: the district court must determine first whether the expert's testimony is based on ‘scientific knowledge;’ and second, whether the testimony ‘will assist the trier of fact to understand or determine a fact in issue.’ " Ambrosini v. Labarraque , 101 F.3d 129, 133 (D.C. Cir. 1996) (quoting Daubert , 509 U.S. at 592, 113 S.Ct. 2786 ) ).

Certainly, a critical aspect of the reliability of a proffered expert's opinion stems from that witness's qualifications. In this regard, "experience" alone can constitute a basis of "reliable principles and methods." FED. R. EVID. 702(c) ; see also id. advisory committee's note to 2000 amendment ("[T]he text of Rule 702 expressly contemplates that an expert may be qualified on the basis of experience."); Cedar Hill Hardware & Constr. Supply, Inc. v. Ins. Corp. of Hannover , 563 F.3d 329, 343 (8th Cir. 2009) (holding that an expert's proposed testimony was admissible under Daubert due to the expert's "exhaustive experience in the insurance industry"); First Marblehead Corp. v. House , 541 F.3d 36, 41 (1st Cir. 2008) (determining an expert to be qualified based on "nearly two decades of experience as a consultant in economics, finance, and strategy consulting"); Shaw Grp., Inc. v. Marcum , 516 F.3d 1061, 1068 (8th Cir. 2008) (finding a witness qualified as an expert "based on his experience working with military contracts similar to the" contract at issue); Hangarter v. Provident Life & Accident Ins. Co. , 373 F.3d 998, 1016, 1018 (9th Cir. 2004) (recognizing that non-scientific or technical testimony need not be "contingent upon a particular methodology or technical framework," so long as an expert's testimony is "reliable based on his knowledge and experience," and determining an expert to be qualified based on "twenty-five years' experience working for insurance companies and as an independent consultant"); Kona Tech. Corp. v. S. Pac. Transp. Co. , 225 F.3d 595, 611–12 (5th Cir. 2000) (recognizing "that a trial court's reliance on individuals experienced in a particular field for the purposes of obtaining explanation of the technical meaning of terms used in the industry is prudent." (internal quotations and citation omitted) ); Lauria v. Nat'l R.R. Passenger Corp. , 145 F.3d 593, 599 (3d Cir. 1998) (recognizing that an expert's knowledge "need not be based on testing or experiments beyond common understanding" so long as the expert's "testimony would be reliable or trustworthy in light of [the expert's] practical background and training"); Thomas v. Newton Int'l Enters. , 42 F.3d 1266, 1270 n.3 (9th Cir. 1994) ("[N]on-scientific testimony need only be linked to some body of specialized knowledge or skills" rather than "to the scientific method."). At the same time, however, an expert witness who "is relying solely or primarily on experience ... must explain how that experience leads to the conclusion reached ... and how that experience is reliably applied to the facts," rather than expect a court to "simply ‘tak[e] the expert's word for it.’ " Thomas v. City of Chattanooga , 398 F.3d 426, 432 (6th Cir. 2005) (internal quotation marks omitted) (quoting ...