HomeMy WebLinkAbout2021-cv-2063-CNS-MEH - City Of Fort Collins V. Open International, Et Al. - 216 - Order On Motions To Exclude1
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Charlotte N. Sweeney
Civil Action No. 1:21-cv-02063-CNS-SP
CITY OF FORT COLLINS, a Colorado home rule municipality,
Plaintiff,
v.
OPEN INTERNATIONAL, LLC, a Florida limited liability company and
OPEN INVESTMENTS, LLC, a Florida limited liability company,
Defendants.
ORDER
Before the Court are: (1) Defendants’ Motion to Exclude Opinion Testimony by City’s
Proffered Non-Retained Expert Michelle Frey (ECF No. 122); (2) Defendants’ Motion to Exclude
Testimony by City’s Damages Expert Ronald Seigneur (ECF No. 150); (3) Defendants’ Motion to
Exclude Testimony and Opinions of the City’s Expert Jon Brock (ECF No. 151); (4) Plaintiff’s
Motion to Exclude and Limit Opinions of Peter Schulman (ECF No. 152); and (5) Plaintiff’s
Motion to Exclude Expert Opinion of Defendant’s Expert John Hutchinson (ECF No. 153).
I. FACTS
This is a breach-of-contract case arising from Defendants’ alleged failure to deliver Open
SmartFlex (OSF), a Customer Information System (CIS) software product intended for use in
administering Plaintiff’s broadband utility services. The instant motions were all filed on January
Case 1:21-cv-02063-CNS-SP Document 216 Filed 05/03/23 USDC Colorado Page 1 of 19
2
6, 2023 (ECF Nos. 150, 151, 152, 153), save for one filed on December 19, 2022 (ECF No. 122).
A ten-day jury trial is set to commence on October 23, 2023 (ECF No. 214).
Of note, while Defendants’ motion pertaining to expert witness Michelle Frey was styled
as a “motion to exclude” (see ECF No. 122), the relief Defendants seek really amounts to striking
the expert for failure to comply with Federal Rule of Civil Procedure 26’s disclosure requirements.
As such, while the Court will analyze the motion pertaining to Ms. Frey under Rule 26, it will
assess the remaining motions to exclude under Federal Rule of Evidence 702 as well as the
standards set forth in Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 590–91 (1993).
II. LEGAL STANDARDS
A. Federal Rule of Civil Procedure 26
Under Rule 26(a)(2), a party must disclose the identity of any witness it may use at trial to
present expert testimony. Pertinent here, if the expert witness is not required to provide a written
report, the party’s disclosure must state: “(i) the subject matter on which the witness is expected
to present evidence under Federal Rule of Evidence 702, 703, or 705; and (ii) a summary of the
facts and opinions to which the witness is expected to testify.” Fed. R. Civ. Proc. 26(a)(2)(C).
Under Rule 37(c)(1), if a party fails to disclose an expert witness per the requirements of
Rule 26(a)(2), the party may not use that witness to supply evidence at trial unless the failure to
disclose was substantially justified or harmless. Fed. R. Civ. P. 37(c)(1). The Court has broad
discretion in determining whether the Rule 26 violation was substantially justified or harmless,
and the court need not make explicit findings on this issue. Woodworker’s Supply, Inc. v. Principal
Mut. Life Ins. Co., 170 F.3d 985, 993 (10th Cir. 1999) (citations omitted). When exercising its
discretion, the Court looks to several factors: “(1) the prejudice and surprise to the party against
Case 1:21-cv-02063-CNS-SP Document 216 Filed 05/03/23 USDC Colorado Page 2 of 19
3
whom the testimony is offered; (2) the ability of the party to cure the prejudice; (3) the extent to
which introducing such testimony would disrupt the trial; and (4) the moving party’s bad faith or
willfulness.” Id. “A trial court has considerable discretion to determine an appropriate sanction
under Rule 37 and the particular circumstances of a given case.” Cartel Asset Mgmt. v. Ocwen Fin.
Corp., No. 01-CV-01644-REB-CBS, 2010 WL 502721, at *17 (D. Colo. Feb. 8, 2010) (citation
omitted).
B. Federal Rule of Evidence 702
Federal Rule of Evidence 702 governs the admissibility of expert testimony:
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 if: (a) 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; (b) the testimony is based
on sufficient facts or data; (c) the testimony is the product of reliable
principles and methods; and (d) the expert has reliably applied the
principles and methods to the facts of the case.
Fed. R. Evid. 702; see also Daubert, 509 U.S. at 590–91. The party submitting the expert’s
testimony must show by a preponderance of the evidence that the testimony is admissible. See,
e.g., Bethel v. Berkshire Hathaway Homestate Ins. Co., No. 17-CV-01456-CMA-KLM, 2022 WL
1037572, at *2 (D. Colo. Apr. 1, 2022). To determine whether expert testimony is admissible, a
court must determine whether: (1) the expert is qualified; (2) the expert’s proffered opinion is
reliable; (3) the expert’s testimony is relevant; and (4) the proffered testimony will assist the trier
of fact. See id. at *2; 103 Invs. I, L.P. v. Square D Co., 470 F.3d 985, 990 (10th Cir. 2006); United
States v. Rodriguez-Felix, 450 F.3d 1117, 1122-23 (10th Cir. 2006).
An expert is qualified if they have the “knowledge, skill, experience, training, or education”
to render an opinion. Roe v. FCA US LLC, 42 F.4th 1175, 1180 (10th Cir. 2020) (citing Fed. R.
Case 1:21-cv-02063-CNS-SP Document 216 Filed 05/03/23 USDC Colorado Page 3 of 19
4
Evid. 702). An expert’s testimony is reliable if the methodology employed by the expert is based
on “sufficient data, sound methods, and the facts of the case.” Id. (citation omitted). The expert’s
testimony must be scientifically sound, but “absolute certainty” is not required. Dodge v. Cotter
Corp., 328 F.3d 1212, 1222 (10th Cir. 2003) (quotation omitted). Testimony is relevant if it
“logically advances a material aspect” of the case and has a “valid scientific connection” to the
case’s disputed facts. Norris v. Baxter Healthcare Corp., 397 F.3d 878, 884 n.2 (10th Cir. 2005)
(citation omitted). The court looks to other non-exclusive factors to determine if the testimony will
assist the jury: (1) whether the testimony is relevant; (2) whether it is within the juror’s common
knowledge and experience; and (3) whether it will usurp the juror’s role of evaluating a witness’s
credibility. Rodriguez-Felix, 450 F.3d at 1123 (citation omitted). Doubts about the testimony’s
usefulness should be resolved in favor of admissibility unless such factors (e.g., time or surprise)
weigh in favor of exclusion. See Robinson v. Missouri Pac. R. Co., 16 F.3d 1083, 1090 (10th Cir.
1994) (quotation omitted).
III. ANALYSIS
A. Plaintiff’s Non-Retained Hybrid Expert Michelle Frey (ECF No. 122)
Defendants move to strike Plaintiff’s non-retained expert, Michelle Frey, because Plaintiff
failed to disclose her opinions per Rule 26(a)(2)(C)(ii) (ECF No. 122 at 2–4). Specifically,
Defendants argue that, while Plaintiff properly disclosed “the subject matter on which the [Dr.
Frey] is expected to present,” Plaintiff failed to provide “a summary of the facts and opinions to
which [Dr. Frey] is expected to testify,” leaving Defendants unable to prepare to cross-examine
her (id. at 2). Plaintiff counters that Defendants are already well familiar with Dr. Frey’s opinions
and involvement in this case—both parties listed Dr. Frey as a fact witness in their initial
Case 1:21-cv-02063-CNS-SP Document 216 Filed 05/03/23 USDC Colorado Page 4 of 19
5
disclosures, Defendants made numerous allegations related to Dr. Frey’s opinions in their
counterclaims, and Defendants participated in a deposition of Dr. Frey on October 12, 2022 (ECF
No. 155 at 2–7).
Although Defendants appear to have prior familiarity with Dr. Frey’s opinions, Rule
26(a)(2)(C) disclosure obligations nevertheless “cannot be ignored or dismissed as a mere
formality, and while less demanding [than the disclosure requirements for retained experts], these
requirements must still be met.” Nosewicz v. Janosko, No. 1:16-cv-00447-PAB-KLM, 2019 WL
4248895, at *5 (D. Colo. Aug. 19, 2019) (citation omitted). There is, however, “scant case law
outlining what constitutes a sufficient disclosure under Rule 26(a)(2)(C).” Seeley v. Home Depot
U.S.A., Inc., No. 1:16-cv-00584-PAB-NYW, 2018 WL 4275375, at *4 (D. Colo. Sept. 7, 2018)
(citation omitted). At a minimum, though, while a disclosure need not “outline each and every fact
to which the non-retained expert will testify or outline the anticipated opinions in great detail,” it
must “provide a brief account of the principal facts supporting [the expert’s] opinions” in order to
“obviate the danger of unfair surprise” regarding the expert’s testimony. Id. at *4, *5 (citations
and internal quotation marks omitted).
Here, Plaintiff’s disclosure outlines the broad contours of Dr. Frey’s opinions in six bullet
points (see ECF No. 122-1), but it lacks any “account of the principal facts” underlying her
opinions. Seeley, 2018 WL 4275375, at *5. Plaintiff is amenable to supplementing its disclosure,
however, and the Court agrees with Plaintiff that Defendants have not been prejudiced by the
disclosure’s insufficiency (ECF No. 155 at 10–14). Accordingly, Defendants’ motion to exclude
the testimony of Dr. Frey is DENIED. Plaintiff is ORDERED to supplement its disclosure by May
26, 2023, and may not exceed the original scope of the disclosure.
Case 1:21-cv-02063-CNS-SP Document 216 Filed 05/03/23 USDC Colorado Page 5 of 19
6
B. Plaintiff’s Retained Damages Expert Ronald Seigneur (ECF No. 150)
Ronald Seigneur’s expert report identifies and calculates eight categories of damages
Plaintiff purportedly suffered due to Defendants’ failure to deliver OSF: (1) the replacement cost
of the broadband billing solution; (2) the replacement cost of the utilities CIS solution; (3) lost
staffing efficiencies for tasks that OSF was supposed to automate; (4) annual overhead expenses
that would not exist if OSF worked; (5) payments to consulting firms for assistance with the OSF
project; (6) lost net revenue; (7) payments to Defendants for OSF’s partial development; and (8)
labor costs related to OSF’s implementation (see ECF No. 150-4 at 6–11).
In the instant motion, Defendants first argue that Mr. Seigneur’s testimony regarding
categories 1–6 above should be excluded because these damages either are “consequential
damages” expressly prohibited by MPSA § 12.1 or, in the aggregate, they exceed “the fees paid or
payable by customer . . . during the twelve (12) months prior to the event giving rise to liability”
in violation of the Master Professional Services Agreement (MPSA) § 12.1 (ECF No. 150 at 3–6).
Plaintiff counters that Defendants’ argument presents disputed questions about available
damages—namely, whether these losses qualify as “consequential damages,” and what the precise
“event giving rise to liability” was (ECF No. 174 at 5–6, 8). The Court agrees with Plaintiff that
the proper vehicle to resolve these questions is a motion for summary judgment, not a motion to
exclude expert testimony under Rule 702. See Wells Fargo Bank, N.A. v. Stewart Title Guar. Co.,
No. 2:19-cv-00285-DB-JCB, 2020 WL 6451963, at *3 (D. Utah Nov. 3, 2020) (“[T]he court will
not entertain summary judgment-esque arguments disguised as Daubert objections.”); see also
Colton Crane Co. v. Terex Cranes Wilmington, Inc., No. CV 08-8525 PSG (PJWx), 2010 WL
2035800, at *1 (C.D. Cal. May 19, 2010) (explaining that motions in limine are not “an appropriate
Case 1:21-cv-02063-CNS-SP Document 216 Filed 05/03/23 USDC Colorado Page 6 of 19
7
means to resolve factual disputes or weigh evidence,” and “should not be used as disguised motions
for summary judgment”).
Similarly, Defendants argue that Mr. Seigneur’s testimony regarding damages categories
5–8 should be excluded because these damages are available only in the event of recission, and
Plaintiff waived its right to rescind the contract by “fail[ing] to promptly seek recission upon
learning of [Defendants’] alleged misrepresentations and, further, continuing to work with
[Defendants] to perform and extend the MPSA” (ECF No. 150 at 6–7).1 In response, Plaintiff
asserts that Defendants’ argument presents a disputed question—i.e., whether recission is an
available remedy in this matter—that is more appropriately resolved in a summary judgment
motion, not a Daubert motion (ECF No. 174 at 8–9). Indeed, as Plaintiff correctly points out,
Defendants raised an identical argument in its motion for summary judgment filed on December
19, 2022 (id. at 8; see ECF No. 132 at 23–26). The Court agrees and, for the reasons explained
above, will not entertain this improper second attempt at a motion for summary judgment.
Finally, Defendants contend that Mr. Seigneur’s expert report is deficient in that it (1) fails
to identify his methodology for calculating the damages he identified in this case, (2) misapplies
certain concepts of contract damages and lost profits in a way that renders his damages calculations
unreliable, and (3) relies on insufficient facts and data (ECF No. 150 at 8–15). None of these
contentions are persuasive. First, the Court notes that Mr. Seigneur’s report explains his
1 Relatedly, Defendants argue that even if recission is available in this matter, Mr. Seigneur’s testimony regarding
damages categories 5–8 should be excluded because his calculations misapplied certain principles of recission (ECF
No. 150 at 7–8). To the extent Defendants allege that Mr. Seigneur’s ultimate recission calculations are flawed, this
Court notes that, in the context of a Daubert challenge, Plaintiff need not prove that Mr. Seigneur is indisputably
correct. See Two Moms and a Toy, LLC v. Int’l Playthings, LLC, No. 1:10-cv-02271-PAB-BNB, 2012 WL 5249459,
at *5 (D. Colo. Oct. 24, 2012) (“Typically, to determine the reliability of expert testimony, courts do not focus on
the correctness of the opinion.”). On this point, the Court finds that Defendants’ criticisms go to the weight, not
admissibility, of Mr. Seigneur’s recission damages calculations.
Case 1:21-cv-02063-CNS-SP Document 216 Filed 05/03/23 USDC Colorado Page 7 of 19
8
methodology for calculating damages in sufficient detail—for each of the eight categories of
damages identified, Mr. Seigneur provides an overview of the steps and key assumptions
underlying his calculations (see ECF No. 150-4 at 6–11; see id. at Schedules A–M). He further
provides thorough explanations of the rationale underlying his lost net revenue calculation, why
he employed an ex-post approach to account for the time value of money in his calculations, and
the discount rates and growth rates he employed in his calculations (see id. at 11–14). The Court
finds it sufficiently clear from the overall content and organization of Mr. Seigneur’s report that
his methodology amounts to identifying applicable damages categories based on his experience,2
explaining the computational assumptions he makes based on facts made known to him in this
case, then opining on the amounts of damages incurred in each category. This method is, as a
general matter, sufficiently reliable for Mr. Seigneur to offer admissible testimony under Rule 702.
As to Defendants’ remaining contentions about the accuracy of Mr. Seigneur’s calculations
and the sufficiency of the data upon which he relies, these criticisms go to the opinion’s weight,
not its admissibility. Hardy v. Union Pac. R.R. Co., No. 1:10-cv-01880-REB-MJW, 2011 WL
5295199, at *3 (D. Colo. Nov. 2, 2011) (“To the extent [the expert’s] facts and data . . . may be
inaccurate, incomplete, or otherwise imperfect, those flaws go to the weight to be ascribed to his
opinions, and not to their admissibility.”); Cook v. Rockwell Int’l Corp., 580 F. Supp.2d 1071,
2 In general, Defendants’ characterization of Daubert’s “reliability” requirement is accurate—the methodology by
which the expert reached his opinion must be sufficiently identified, and that methodology must be generally
deemed reliable in the field in which the expert works (see ECF No. 150 at 9 (quoting United States v. Crabbe, 556
F.Supp.2d 1217, 1222 (D. Colo. 2008))). But as Plaintiff correctly observes, where non-scientific expert testimony is
concerned, the Daubert factors may not always be helpful in assessing reliability given “the nature of the issue, the
expert’s particular expertise, and the subject of his testimony”—rather, in many cases, “the relevant reliability
concerns may focus upon personal knowledge or experience” (see ECF No. 174 at 10–11 (quoting Kumho Tire Co.,
Ltd. v. Carmichael, 526 U.S. 137, 150 (1999))). Here, the “reliability” of Mr. Seigneur’s opinions appears to derive
not from any strictly scientific procedure, but instead from “over 30 years of experience providing business
valuations and calculating damages” (ECF No. 174 at 4). The Court thus finds Mr. Seigneur’s calculation of
economic damages sufficiently reliable in light of the particular nature of his expertise.
Case 1:21-cv-02063-CNS-SP Document 216 Filed 05/03/23 USDC Colorado Page 8 of 19
9
1085 (D. Colo. 2006) (it is for the jury “to decide whether the expert used the best or most reliable
methodology” and “what weight to accord to his testimony”).
For these reasons, Defendants’ motion to exclude the testimony of Mr. Seigneur is
DENIED.
C. Plaintiff’s Retained Technical Expert Jon Brock (ECF No. 151)
Plaintiff retained expert witness Jon Brock to opine on “relevant industry standards and
how [Defendants] failed to meet those standards” while implementing OSF (see ECF No. 175 at
1). Here, Defendants move to exclude Mr. Brock’s expert opinions for numerous reasons.
First, Defendants argue that Mr. Brock’s report set forth the wrong industry standard for
responding to a request for proposals (RFP)—while he claims that a vendor must respond to an
RFP based on its “actual and then-current capabilities and functionalities,” Defendants’ own expert
on the subject, John Hutchinson, claims that “the standard is to respond according to the express
instructions in the RFP and based on the product the vendor is proposing to deliver” (ECF No. 151
at 1–5). To the extent that Mr. Brock’s purported industry standard conflicts with Mr.
Hutchinson’s, Defendants have identified a quintessential “battle of the experts” for which cross-
examination before a jury, not a Daubert motion, is the proper testing ground. See Thompson v.
State Farm Mut. Auto. Ins. Co., 457 F. Supp.3d 998, 1005 (D. Colo. 2020).
Second, Defendants argue that Mr. Brock’s opinion about whether Defendants met the
industry standard for responding to RFPs is an improper attempt at contract interpretation, since
Defendants’ RFP Response was ultimately incorporated into the MPSA (ECF No. 151 at 3, 4–5;
see id. at 3, n.2). But even if the RFP Response later became part of the contract, Plaintiff correctly
points out that Mr. Brock’s opinions about Defendants’ failure to meet industry standards refer to
Case 1:21-cv-02063-CNS-SP Document 216 Filed 05/03/23 USDC Colorado Page 9 of 19
10
the pre-contract time in which the contents of the RFP Response induced Plaintiff to award
Defendants the contract for services (ECF No. 175 at 3). Put more simply, Mr. Brock’s opinions
on this point do not interpret a contract but are instead directed toward Plaintiff’s fraudulent
inducement and negligent misrepresentation claims.
Third, Defendants argue that Mr. Brock’s account of the relevant industry standard and
whether Defendants failed to meet it are irrelevant to the claims at issue in this case (ECF No. 151
at 4). This is inaccurate. Among other claims, Plaintiff has alleged negligent misrepresentation
(ECF No. 192 at 21–23), which requires proof that:
(1) one in the course of his or her business, profession, or
employment; (2) makes a misrepresentation of a material fact,
without reasonable care; (3) for the guidance of others in their
business transactions; (4) with knowledge that his or her
representations will be relied upon by the injured party; and (5) the
injured party justifiably relied on the misrepresentation to his or her
detriment.
Nelson v. Csajaghy, No. 1:14-cv-02617-CMA-KLM, 2015 WL 4035876, at *13 (D. Colo. May
28, 2015) (emphasis added). And at least as to this claim, “while industry standards are not
dispositive on the issue of reasonable care, they are relevant.” Great Northern Ins. Co. v. NGL
Warehouse, LLC, No. 1:14-cv-03233-PAB-NYW, 2017 WL 275321, at *4 (D. Colo. Jan. 18,
2017).
Fourth, Defendants argue that Mr. Brock’s opinions regarding Defendants’ failure to meet
industry standards are unreliable. Specifically, Defendants claim that: (1) Mr. Brock’s testimony
as to Defendants’ defective functional matrix grading relies on the wrong numbers; and (2) Mr.
Brock’s testimony that Defendants misrepresented their then-current functionalities ignores that
Defendants intentionally graded the functional matrix based on a future, in-development version
Case 1:21-cv-02063-CNS-SP Document 216 Filed 05/03/23 USDC Colorado Page 10 of 19
11
of OSF (ECF No. 151 at 5–6). But to the extent that Defendants perceive any shortcomings in Mr.
Brock’s assessments of Defendants’ functional matrix grading, the Court notes that these are
matters for cross-examination, not bases for wholesale exclusion of Mr. Brock’s testimony. See
Daubert, 509 U.S. at 595 (“Vigorous cross-examination, presentation of contrary evidence and
careful instruction on the burden of proof are the traditional and appropriate means of attacking
shaky but admissible evidence.”).
Fifth, Defendants argue that Mr. Brock’s opinions relied on “ISG’s Project Estimation as
a Service (PEaaS) tool” without an explanation of the PEaaS tool’s methodology (ECF No. 151 at
6–8). But here, the Court agrees with Plaintiff that the methodology underlying Mr. Brock’s PEaaS
analysis was adequately explained. Specifically, his report noted that PEaaS is a tool “used to size
capital projects for budgeting, regulatory, and audit purposes,” that it compares a client’s project
“against projects of similar size and complexity” to evaluate the project’s expected cost in terms
of dollar amounts, project duration, and labor hours, and that, here, OSF was compared to projects
of similar scope and complexity “drawn from a database of 13,000+ completed projects” (ECF
No. 175 at 6; ECF No. 151-1 at 38–39). Given this explanation, Mr. Brock’s reliance on PEaaS in
forming his opinions is a proper subject for cross-examination, not broad exclusion. See Kumho
Tire Co., 526 U.S. at 150 (permitting leeway to assess the reliability of non-scientific expert
testimony “depending on the nature of the issue, the expert’s particular expertise, and the subject
of his testimony”).
Sixth, Defendants argue that several of Mr. Brock’s opinions constitute impermissible legal
conclusions (ECF No. 151 at 8–9). With respect to his assertions about Defendant’s
“misrepresentations” in this case, the Court agrees. Here, Plaintiff claims that Mr. Brock’s repeated
Case 1:21-cv-02063-CNS-SP Document 216 Filed 05/03/23 USDC Colorado Page 11 of 19
12
assertions that Defendants “misrepresented” the functions and capabilities of OSF, as well as the
OSF project’s schedule and cost, were not improper attempts to apply the facts to the law; rather,
they were efforts to apply the facts against the industry standard of “respond[ing] accurately and
factually to the RFP” (ECF No. 175 at 8). But even assuming this as true, an expert’s testimony
nevertheless veers into the territory of improper legal conclusion when the witness over-relies on
terms that “have a separate, distinct, and specialized meaning in the law different from that present
in the vernacular.” United States v. Richter, 796 F.3d 1173, 1196 (10th Cir. 2015) (citation
omitted); see United States v. Schneider, 704 F.3d 1287, 1294 (10th Cir. 2013) (noting that expert
testimony raises concerns when the expert “uses a specialized legal term and usurps the jury’s
function”). And the concern is heightened here, because the notion of “misrepresentation” touches
upon essential elements of Plaintiff’s burden of proof for its fraudulent inducement and negligent
misrepresentation claims. As such, while Mr. Brock may testify factually about Defendants’
conduct during the RFP process and whether it comported with industry standards, any references
to Defendants’ “misrepresentations” will be excluded.
Seventh, Defendants argue that Mr. Brock’s opinions about a purported industry standard
of “vendor transparency, honesty, experience, and accountability” are (1) unreliable, essentially
because it “reads as something [Mr. Brock] created out of whole cloth”; and (2) unhelpful to the
jury, because whether Defendants violated this industry standard has little bearing on whether
Defendants breached the contract at issue in this case (ECF No. 151 at 10–11). The Court is
unpersuaded. A review of the relevant portion of the report appears to show that Mr. Brock refers
to the industry standard of “vendor transparency, honesty, experience, and accountability” as a
shorthand for “a standard and expectation that the vendor, as the expert, will staff the project with
Case 1:21-cv-02063-CNS-SP Document 216 Filed 05/03/23 USDC Colorado Page 12 of 19
13
individuals that have expertise in the field and industry being deployed,” as well as a “standard in
the industry to have a risk register and associated risk mitigation that is released with the weekly
status” (ECF No. 151-1 at 44, 48). In this light, Mr. Brock’s description of the industry standard
(i.e., regarding a vendor’s project staffing and disclosure of risks and delays, not simply the
vendor’s duty to act honestly) was proper. Furthermore, as explained above, Mr. Brock’s
discussion of the industry standard is relevant to Plaintiff’s negligent misrepresentation claim. See
Great Northern Ins. Co., 2017 WL 275321, at *4.
Eighth, Defendants argue that Mr. Brock’s opinions about OSF not being “highly
configurable” or “ready for the U.S. market” are unreliable, because (1) Mr. Brock “has never
examined, used, or evaluated OSF,” nor has he “offer[ed] any reliable alternative basis that could
make up for his lack of examination, and (2) Mr. Brock has not explained how OSF’s lack of
certain functionalities “means the entire OSF product was not ‘ready’ for the entire U.S. market”
(see ECF No. 151 at 11–13) (emphases in original). These arguments, too, are unpersuasive. Even
if Mr. Brock did not examine the software itself, he did apply industry standards against other
evidence he reviewed, including “Open’s own assessments of its product” (see ECF No. 175 at
12–14). And because Mr. Brock “has been involved with more than 300 utilities related to their
CIS, billing systems, customer service portals, CRM, call centers, and other systems,” and “has
studies and evaluated over 20 different CIS/billing vendors” since 1993 (see ECF No. 151-1 at 4),
his familiarity with this industry may properly form the basis of his opinions about OSF’s
configurability and market readiness. See Kumho Tire Co., 526 U.S. at 150 (the reliability inquiry
may be satisfied based upon a non-scientific expert’s personal knowledge or experience).
Case 1:21-cv-02063-CNS-SP Document 216 Filed 05/03/23 USDC Colorado Page 13 of 19
14
Ninth and finally, Defendants argue that Mr. Brock’s various other opinions about
Defendants’ state of mind, the credibility of Defendants’ experts, and Defendants’ promise to
deliver OSF by a certain date are all improper (ECF No. 151 at 13–15). As to Mr. Brock’s
comments on Defendants’ intent or state of mind (e.g., “Open knowingly misrepresented the
functionalities and capabilities of its then-existing product”; “Open under-estimated the project
knowingly in order to win the business”), the Court agrees.3 “Courts generally exclude expert
testimony that directly attempts to state a corporate defendant’s state of mind,” because “expert
opinions on the intent, motives, or states of mind of corporations have no basis in any relevant
body of knowledge or expertise.” Fischer v. BMW of N. Am., LLC, No. 1:18-cv-00120-PAB-MEH,
2020 WL 9259705, at *6 (D. Colo. Mar. 10, 2020). Thus, any of Mr. Brock’s references to
Defendants’ intent or state of mind will be excluded.
For these reasons, Defendants’ motion to exclude Mr. Brock’s opinion is DENIED IN
PART and GRANTED IN PART.
D. Defendants’ Retained Damages Expert Peter Schulman (ECF No. 152)
In his rebuttal expert report regarding damages, Peter Schulman opines that in the event of
the contract’s recission, Plaintiff would be entitled to zero damages based on an offset of
Defendants’ costs (ECF No. 152-2 at 29–30). He also assumed for purposes of his calculations
that Plaintiff’s damages under MPSA § 12.1 are limited to the 12-month period between July 3,
2020, and July 2, 2021 (id. at 19–20).
3 Defendants’ other contentions—about Mr. Brock having allegedly commented on Mr. Hutchinson’s qualifications,
and about Defendants’ promises to deliver OSF by a certain date—are unavailing.
Case 1:21-cv-02063-CNS-SP Document 216 Filed 05/03/23 USDC Colorado Page 14 of 19
15
In the instant motion, Plaintiff argues that Mr. Schulman’s opinions regarding recission
damages (at pages 29–30 of his report) should be excluded because: (1) Mr. Schulman failed to
assume Defendants’ liability when calculating “offset” recission damages, and (2) his opinion that
Mr. Seigneur’s report “misses the mutuality of the recission remedy” is an improper legal
conclusion (ECF No. 152 at 6–9). Neither of these arguments hold water. As explained above,
criticisms of an expert’s opinion based on its faulty assumptions or omissions go to the weight a
jury chooses to assign to the opinion, not its admissibility. Hardy, 2011 WL 5295199, at *3; Cook,
580 F. Supp.2d at 1085. Further, Mr. Schulman’s criticism above does not amount to a legal
conclusion—rather, it seeks to cast doubt upon the assumptions underpinning Mr. Seigneur’s
recission damages calculation. This is garden-variety rebuttal testimony. See Marmo v. Tyson
Fresh Meats, Inc., 457 F.3d 749, 759 (8th Cir. 2006) (“The function of rebuttal testimony is to
explain, repel, counteract, or disprove evidence of the adverse party.”).
Separately, Plaintiff argues that Mr. Schulman’s opinions regarding contract damages (at
pages 19–20 of his report) should be excluded because he calculated these damages on the
assumption that the relevant look-back date (i.e., the “event giving rise to liability” under MPSA
§ 12.1) was July 2, 2021 (ECF No. 152 at 9–10). Plaintiff points out that the true look-back date
remains under dispute, so Mr. Schulman’s calculations for the period between July 3, 2020, and
July 2, 2021, improperly assume how a disputed contractual term will apply (id.). The Court is
unpersuaded. The language of Mr. Schulman’s report does not opine on the applicability of MPSA
§ 12.1, nor does it opine that July 2, 2021, is the true look-back date—rather, it reflects only that
his firm was “instructed to use July 2, 2021, the date that the City filed its complaint, as the look
back date for applying payments during the 12 months referred to in” the MPSA (ECF No. 152-2
Case 1:21-cv-02063-CNS-SP Document 216 Filed 05/03/23 USDC Colorado Page 15 of 19
16
at 20). If the assumed look-back date of July 2, 2021, is ultimately rejected at trial, the failure of
this assumption may vitiate Mr. Schulman’s opinion on contract damages. For now, however, Mr.
Schulman’s reliance on the assumed look-back date does preclude his opinion on contract damages
from having an adequate foundation under Rule 702. See United States v. Crabbe, 556 F.Supp.2d
1217, 1224–25 (D. Colo. 2008).
For these reasons, Plaintiff’s motion to exclude Mr. Schulman’s opinion at pages 19–20
and 29–30 is DENIED.
E. Defendants’ Retained Technical Expert John Hutchinson (ECF No. 153)
Defendants retained expert witness John Hutchinson to opine on the primary cause(s) of
the OSF project’s failure (see ECF No. 153-1 at 4). Plaintiff moves to exclude Mr. Hutchinson’s
expert opinions for numerous reasons.
First, Plaintiff argues that Mr. Hutchinson’s opinions about the cause(s) of the OSF
project’s failure are unreliable, both because he failed to identify his methodology for conducting
a causation analysis, and because he failed to perform any audit of the project or account for all
issues affecting the project (ECF No. 153 at 4–6). But like Mr. Brock’s methodology discussed
above, Mr. Hutchinson relied on his “experience and knowledge from implementing CISs for over
twenty years” to assess the reasons for the project’s failure (ECF No. 153-1 at 5). This is an
acceptable methodology. See Kumho Tire Co., 526 U.S. at 150 (the reliability inquiry may be
satisfied based upon a non-scientific expert’s personal knowledge or experience). And to the extent
that Mr. Hutchinson may not have considered certain facts during his analysis, such an omission
is better suited to cross-examination than broad exclusion. See Daubert, 509 U.S. at 595
Case 1:21-cv-02063-CNS-SP Document 216 Filed 05/03/23 USDC Colorado Page 16 of 19
17
Second, Plaintiff argues that Mr. Hutchinson’s opinions about the deployment of
broadband services are unreliable, both because he failed to identify his methodology for analyzing
issues with broadband services, and because broadband services fall outside the purview of his
expertise (ECF No. 153 at 6–8). On this point, the Court agrees with Defendants that Mr.
Hutchinson’s opinions “depend not on application-specific expertise in broadband, but on
expertise in billing and customer-care system implementation projects” (see ECF No. 173 at 5–7).
As noted above, Mr. Hutchinson appears to possess ample knowledge and experience with CIS
implementation.
Third, Plaintiff argues that Mr. Hutchinson’s opinions about Plaintiff’s staffing of the OSF
project are unreliable because he failed to identify any methodology or industry standard for
assessing the adequacy of project staffing (ECF No. 153 at 8–9). For the same reasons discussed
above with respect to Mr. Hutchinson’s causation opinion, this argument fails. See Kumho Tire
Co., 526 U.S. at 150.
Fourth, Plaintiff argues that Mr. Hutchinson’s opinions about whether either of the parties
breached the contract are improper (ECF No. 153 at 9–11). The Court agrees that Mr. Hutchinson
may not offer an opinion on whether Plaintiff “breached” or “violated” the MPSA, nor may he
interpret the meaning of any contract provision, define the law that the jury must apply, or tell the
jury how to rule on questions of law. However, based on the statements challenged by Plaintiff, it
appears that Mr. Hutchinson is not attempting to interpret the MPSA—rather, he discusses the
parties’ respective responsibilities as defined in the Statement of Work as a benchmark to analyze
the parties’ execution of project-related tasks and the reasons why the OSF project failed. This is
acceptable expert reliance on language contained in the parties’ contract. Cf. Bethel v. Berkshire
Case 1:21-cv-02063-CNS-SP Document 216 Filed 05/03/23 USDC Colorado Page 17 of 19
18
Hathaway Homestate Ins. Co., 596 F.Supp.3d 1260, 1267 (D. Colo. 2022) (an expert witness “may
offer factual statements about language that is included in [a contract] for the purpose of offering
his opinions”).
Fifth, Plaintiff argues that Mr. Hutchinson’s opinions about Defendants’ state of mind and
credibility are improper (ECF No. 153 at 9–13). Plaintiff points out, for instance, that in his rebuttal
report, Mr. Hutchinson speculates that Defendant “always intended to modify the portal code
purchased from Milestone,” and that “the parties planned for this [testing to occur] all along” (ECF
No. 153-2 at 15, 17) (emphases added). For the same reasons discussed above with respect to Mr.
Brock, any of Mr. Hutchinson’s references to Defendants’ motives, plans, or intentions during the
OSF project will be excluded. See Fischer, 2020 WL 9259705, at *6.
Sixth and finally, Plaintiff argues that Mr. Hutchinson’s various other opinions should be
excluded as either conclusory or based on unspecialized knowledge (ECF No. 153 at 13–15). The
Court finds these remaining catch-all contentions unavailing and will not address them here.
For these reasons, Plaintiff’s motion to exclude Mr. Hutchinson’s opinion is DENIED IN
PART and GRANTED IN PART.
IV. CONCLUSION
Defendants’ Motion to Exclude Opinion Testimony by City’s Proffered Non-Retained
Expert Michelle Frey is DENIED (ECF No. 122). Pursuant to Fed. R. Civ. Proc. 26(a)(2)(C),
Plaintiff is ordered to supplement its disclosures by May 26, 2023.
Defendants’ Motion to Exclude Testimony by City’s Damages Expert Ronald Seigneur is
DENIED (ECF No. 150).
Case 1:21-cv-02063-CNS-SP Document 216 Filed 05/03/23 USDC Colorado Page 18 of 19
19
Defendants’ Motion to Exclude Testimony and Opinions of the City’s Expert Jon Brock is
DENIED IN PART and GRANTED IN PART, for the reasons set forth above (ECF No. 151).
Plaintiff’s Motion to Exclude and Limit Opinions of Peter Schulman is DENIED (ECF No.
152).
Plaintiff’s Motion to Exclude Expert Opinion of Defendant’s Expert John Hutchinson is
DENIED IN PART and GRANTED IN PART, for the reasons set forth above (ECF No. 153).
DATED this 3rd day of May 2023.
BY THE COURT:
___________________________________
Charlotte N. Sweeney
United States District Judge
Case 1:21-cv-02063-CNS-SP Document 216 Filed 05/03/23 USDC Colorado Page 19 of 19