Preview
FILED
DALLAS COUNTY
5/1 5/2019 9:35 PM
FELICIA PITRE
DISTRICT CLERK
Cassandra Walker
CAUSE NO. DC-17-10592
MARTY MURPHY, IN THE DISTRICT COURT
0mm
Plaintiff and Counterclaim-
Defendant
V.
PAVECON HOLDING CO., INC.,
PAVECON LTD. CO., 192nd JUDICIAL DISTRICT
PAVECON PUBLIC WORKS LP, mmmmmmmmmmmmmm
PAVECON PUBLIC WORKS GP
LLC, LABCON, INC., DAVID
WALKER,
Defendants and Counterclaim—
Plaintiffs, DALLAS COUNTY, TEXAS
DEFENDANTS’ RESPONSE TO PLAINTIFF’S MOTION TO STRIKE
DEFENDANTS’ NON—RETAINED REBUTTAL EXPERTS
There is no merit t0 Murphy’s motion to strike Defendants’ three non-retained
experts: David Walker, David Hardin, and Bob Arnett. In disclosing these three
Witnesses, Defendants satisfied Rule 194’s requirements. Murphy’s contrary
arguments all rest 0n a misreading 0f Defendants’ disclosures, a misconstruction 0f
Rule 194’s plain text, and a misunderstanding of the rules 0f evidence. Once these
are placed in their proper context, the substance 0f these Witnesses’ testimony is clear
and satisfies Rule 194’s minimal requirements.
I. The Thin Line Between Texas Rule of Evidence 701 and Rule 702
Warranted Walker’s, Hardin’s, and Arnett’s Designation as
“Fact/Expert Witnesses.”
When a CPA, a CEO, and an attorney are called t0 testify about matters Within
their knowledge and experience, and are asked a question at trial that requires them
t0 render an opinion based 0n that knowledge and experience, are they testifying as
a lay Witness 0r as an expert? The answer could very well be both. See, e.g., Robbins
v. Reliance Ins. CO., 102 S.W.3d 739, 748 (TeX. App.—C0rpus Christi 2001, no pet.)
(holding that witness’s testimony about the interaction 0f insurance documents in his
business was admissible under either Rule 701 0r Rule 702). Under Texas Rule 0f
DEFS.’ RESP. T0 PL.’s MOT. T0 STRIKE NON-RETAINED EXPERTS PAGE 1
Evidence 701, lay Witnesses may provide opinion testimony based 0n facts Within the
witness’s “rational perception,” even When such opinion testimony results from the
witness’s application 0f some expertise. Lundy v. Allstate Ins. Co., 774 S.W.2d 352,
357 (TeX. App.—Beaumont 1989, no writ) (holding that fire investigator’s testimony
that a fire was set intentionally based on his personal review 0f the fire site, and
about the various reasons Why people intentionally set fires, was admissible lay
opinion testimony under Rule 701). Texas Rule of Evidence 702, on the other hand,
permits opinion testimony When the testimony is based 0n scientific 0r other
“specialized knowledge” and is helpful t0 the jury. The problem, however, is that in
cases like this one, Where witnesses like Walker (a CEO), Hardin (a CPA), and Arnett
(an attorney) Will testify and probably provide opinions based 0n their specialized
knowledge, “[a] distinct line cannot be drawn between lay opinion and expert
testimony because all perceptions are evaluated based on experiences.” Osbourn v.
State, 92 S.W.3d 531, 537 (TeX. Crim. App. 2002). Should a party disclose such
fact/expert Witnesses as experts 0r not?
One answer is to wait until trial and hope for the best. But if a party guesses
wrong and ends up 0n the wrong side 0f the razor thin line between lay opinion
testimony and expert opinion testimony, the consequences can be severe. Texas Rule
0f Civil Procedure 198.6 requires the exclusion of Witnesses Who are not timely
designated. TeX. R. CiV. P. 193.6(a). Accordingly, the easiest way t0 avoid this trap is
to d0 What Defendants did: designate Witnesses like Walker, Hardin, and Arnett as
“expert and/or mixed fact/expert Witnesses Who, in the course of their testimony,
may be asked questions that call for expert opinion testimony and/or rebuttal expert
Witness testimony and are designated as such,”1 and set forth the subject matter and
general substance 0f the opinions for each expert (as further shown below).
1 Pl.’s
Mot. t0 Strike Improperly Designated Expert Witnesses, EX. 3, Defs.’ Suppl. Rebuttal Expert
Disclosures at 2; EX. 5, Defs.’ Rebuttal Expert Disclosures at 2.
DEFS.’ RESP. T0 PL.’s MOT. T0 STRIKE NON-RETAINED EXPERTS PAGE 2
Neither these designations nor the substance 0f these experts’ opinions pose
any surprise 0r prejudice to Murphy. Murphy has had Arnett’s designation since
December 17, 2018, and the scope and substance 0f that testimony is clear: Arnett
will testify that Pavecon’s attorney’s fees are reasonable and (likely) that Murphy’s
attorney’s fees are unreasonable. That Defendants have left it open as t0 Whether
Arnett Will be called t0 rebut Murphy’s claim for fees on rebuttal is a defendant’s
prerogative. Only Murphy bears the burden of proof 0n his claim for fees?
As for Walker and Hardin’s designations, they too pose n0 surprise 0r prejudice
to Murphy. Defendants made clear in their rebuttal expert disclosures that if Murphy
is permitted t0 testify about issues such as the value 0f his services 0r his rate of
compensation—a proposition Defendants have challenged in part because Murphy
has yet t0 actually reveal What those opinions are3—Walker Will rebut those as-yet
undisclosed opinions. Moreover, Murphy has already availed himself of the
opportunity t0 cross-examine Walker as t0 his opinions about “Pavecon’s bonus
programs and profit-sharing programs Which compensate Pavecon’s executives and
management personnel at a level above the prevailing competitive pay”4—to the
extent these opinions are expert testimony at all. Murphy deposed Walker for nearly
five hours and the bonus and stock programs were a frequent topic of conversation.
As such, any assertion of surprise or prejudice from Murphy would be futile.
The same is true 0f any challenge to Hardin’s designation. “[T]he opinions of
Ken Sibley regarding Plaintiffs damages and Plaintiff regarding his damages,”5 are
known to Murphy. And, if called at trial, Hardin may testify about his role as CPA in
2
Rather than supplement disclosures every month as the attorney’s fees in this case have escalated
in recent months, and since Arnett’s designation, Defendants Will produce information about the
amount 0f fees and applicable rates closer t0 trial.
3 See Defs.’ Mot. t0 Strike P1.’s Experts at 9—10 (arguing that Murphy’s “opinions” about his
compensation rate and the value of his services should be excluded because, among other reasons, such
opinions are based purely on Murphy’s ipse dixit).
4 Pl.’s Mot. to Strike Non-Retained
Experts, Ex. 3, Defs.’ Rebuttal Discl. at 2.
5 Pl.’s Mot. t0 Strike Non-Retained
Experts, EX. 3, Defs.’ Rebuttal Discl. at 2—3.
DEFS.’ RESP. T0 PL.’s MOT. T0 STRIKE NON-RETAINED EXPERTS PAGE 3
“preparing the tax returns for the Pavecon companies” and Why Sibley’s and
Baucum’s opinions about those issues are wrong.6 Moreover, topics such as “Plaintiff’s
compensation, the tax treatment 0f Plaintiff’s compensation, and Plaintiff’s K-ls” are
well-plowed ground by this point, and Murphy cannot claim surprise 0r prejudice if
Hardin testifies that, in his opinion, those documents that he personally prepared
were prepared correctly. If that testimony is expert testimony at all, it is testimony
Murphy should have anticipated based 0n the plain language provided in Defendants’
disclosures.
II. Defendants Have Sufficiently Disclosed Both Subject Matter and the
Substance ofWalker’s, Hardin’s, and Arnett’s Opinions.
Despite Murphy’s contrary assertions, the record shows that Defendants’
disclosures are sufficiently specific to disclose both the subject matter and general
substance of each expert’s impressions and opinions (if such opinions are even subject
to Rule 702).
The subject matter of Arnett’s testimony is the issue of attorney’s fees. The
general substance of Arnett’s testimony is that, based 0n his personal knowledge and
experience, Defendants’ demand for fees is reasonable and, potentially, Murphy’s
demanded fees are unreasonable.7
The subject matter 0f Walker’s testimony is rebuttal in nature and concerns
the subjects 0f Murphy’s compensation and Pavecon’s business. The general
substance 0f Walker’s testimony will be that Murphy was fairly compensated and
that Pavecon’s bonus and profit-sharing programs were fair and competitive.8
The subject matter 0f Hardin’s testimony is also rebuttal in nature and may
concern Hardin’s rebutting attacks on his personal preparation of Pavecon’s tax
returns and his performance of his duties as Pavecon’s CPA under general accounting
6 P1.’s Mot. t0 Strike Non-Retained Experts, EX. 3, Defs.’ Rebuttal Discl. at 2—3.
7 Pl.’s Mot. to Strike Non-Retained Experts, Ex. 3, Defs.’ Rebuttal Discl. at 3.
8 Mot. t0 Strike Non-Retained Experts, EX. Rebuttal Discl. at
Pl.’s 3, Defs.’ 2.
DEFS.’ RESP. T0 PL.’s MOT. T0 STRIKE NON-RETAINED EXPERTS PAGE 4
principles.9 The general substance of Hardin’s opinions are that he did nothing wrong
When preparing the companies’ taX returns 0r in the performance 0f his duties as an
accountant, despite What Sibley, Murphy’s expert, may say (if given the chance).10
This is all the rules require for experts like these. TeX. R. CiV. P. 194.2(f).
This is especially true since Defendants have provided Murphy more
information about these Witnesses’ testimony than have other parties in prior cases
whose experts were admitted. In Miller v. Kennedy & Minshew, Prof’l Corp,
142 S.W.3d 325 (TeX. App.—F0rt Worth 2003, pet. denied), for example, the court
affirmed the trial court’s decision to permit two defense experts t0 testify even though
the defendant had failed to designate either witness as an expert. Id. at 349. In fact,
one 0f the experts (Bares) had not even been designated as a fact Witness. Id.
Notwithstanding these facts, the court held that each expert could permissibly testify
because, as in this case, there was no unfair surprise or prejudice t0 plaintiff. Id. As
here, the plaintiff had defendants’ discovery responses and had the substance 0f the
experts’ testimony for more than a year. Id. The plaintiff had also retained his own
experts who could attack the testimony of the defendant’s two non-disclosed experts.
Id.
If a complete failure to disclose experts, 0r even as a fact witness, did not
warrant striking such experts’ testimony under the facts of Miller, then Defendants’
actual disclosure of three experts under very similar facts cannot warrant striking
Walker, Hardin, 0r Arnett. Murphy’s motion should therefore be denied.
9 Pl.’s Mot. to Strike Non-Retained Experts, Ex. 3, Defs.’ Rebuttal Discl. at 2—3.
10 Pl.’s Mot. t0 Strike Non-Retained Experts, EX. 3, Defs.’ Rebuttal Discl. at 2—3.
DEFS.’ RESP. T0 PL.’s MOT. T0 STRIKE NON-RETAINED EXPERTS PAGE 5
III. Defendants Identified the Documents that May Be Implicated in
Hardin’s Testimony.
There are n0 grounds for striking Hardin based 0n Rule 194’s requirement that
experts identify any “documents, tangible things, reports, models, or data
compilations that have been provided to, reviewed by, or prepared by or for the expert
in anticipation 0f the expert's testimony.” TeX. R. CiV. P. 194.2(f)(4)(A). The key
phrase from Rule 1942’s disclosure requirement that Murphy gives short shrift is the
last phrase: “in anticipation of the expert’s testimony.”
Hardin is not Defendants’ retained, testifying expert. He is Defendants’ every-
day outside CPA. Hardin personally prepared certain documents in that every-day
role, and Defendants affirmatively identified those documents in their disclosures:
“Pavecon’s taX returns”; “the tax treatment 0f Plaintiff’s compensation”; and
“Plaintiff’s K-1s.”11 Defendants did not provide any 0f the materials identified in Rule
194 to Hardin so that he may testify in this case, and neither Defendants nor Hardin
prepared any such materials so that Hardin could testify in this case. So there were
no additional documents t0 identify and therefore n0 basis for Murphy’s motion.
CONCLUSION
Defendants’ disclosure 0f its non-retained experts complies With the rules.
Defendants timely identified each Witness, identified the subject matter of each
witness’s testimony, and provided the general substance of each expert’s opinions.
Defendants’ disclosure runs n0 risk of unfair surprise 0r prejudice to Murphy since,
as in cases like Miller, Murphy has had sufficient time and his own experts t0
understand the factual basis for each expert’s opinion—to the extent such testimony
is expert testimony at all. Murphy’s motion should therefore be denied.
11 Pl.’s Mot. t0 Strike Non-Retained Experts, EX. 3, Defs.’ Rebuttal Discl. at 2—3.
DEFS.’ RESP. T0 PL.’s MOT. T0 STRIKE NON-RETAINED EXPERTS PAGE 6
Date: Mav 15, 2019 Respectfully submitted,
/s/Joshua J. Bennett
J.Robert Arnett II
Texas Bar No. 01332900
barnett@carterarnett.com
Stacey Cho Hernandez
Texas Bar No. 24063953
shernandez@carterarnett.com
Joshua J. Bennett
Texas Bar No. 24059444
jbennett@carterarnett.com
CARTER ARNETT PLLC
8150 N. Central EXpy, Ste. 500
Dallas, Texas 75206
Telephone: (214) 550-8188
Facsimile: (214) 550-8185
ATTORNEYS FOR DEFENDANTS
CERTIFICATE OF SERVICE
I hereby certify that, on May 15, 2019, all counsel of record were served With
this instrument through the Court’s electronic filing system.
/s/ J. Robert Arnett II
J.Robert Arnett II
DEFS.’ RESP. T0 PL.’s MOT. T0 STRIKE NON-RETAINED EXPERTS PAGE 7