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Bar J Sand & Gravel, Inc. v. Fisher Sand & Gravel Co.

United States District Court, D. New Mexico

November 16, 2017

BAR J SAND & GRAVEL, INC., a New Mexico corporation, Plaintiff,
v.
FISHER SAND & GRAVEL CO., a North Dakota corporation, doing business in New Mexico through its division SOUTHWEST ASPHALT & PAVING, Defendant.

          MEMORANDUM OPINION AND ORDER

         In its amended counterclaims, Defendant Fisher Sand & Gravel Co. (“Fisher”) asserts that Plaintiff Bar J Sand & Gravel, Inc. (“Bar J”) made misrepresentations that forced Fisher to abandon a stockpile of material that Fisher could have otherwise sold. Doc. 46 at 26-31. Fisher intends to have its Vice President, Michael Moehn, testify about the value of this stockpiled material. In its motion to strike (Doc. 159), Bar J argues that such testimony constitutes expert testimony, that Fisher did not provide sufficient disclosure regarding such testimony and, therefore, the Court should prohibit the testimony. Because Moehn's testimony will be subject to cross-examination and constrained by the disclosure provided by Fisher, the Court will not prohibit Moehn from testifying as to the value of the stockpiled material. Accordingly, the Court denies Bar J's motion to strike.

         I. Background [1]

         This litigation stems from a supply agreement between Bar J and Fisher. Bar J's ability to enter into such a contract derived from a sand and gravel mining lease an entity not a party to this case, Bar J Trucking, Inc., had with the Pueblo of San Felipe. Doc. 38 at 3, doc. 46 at 2. In Count I of its amended counterclaims, Fisher asserts that Bar J misrepresented to Fisher that the lease between Bar J Trucking and San Felipe Pueblo would be renewed when, in fact, Bar J knew it would not. Doc. 46 at 23-31. As a result, Fisher alleges the non-renewal came as a surprise that caused it to abandon material it had stockpiled on Pueblo land. If sufficient notice of the non-renewal had been provided, Fisher claims it would have removed the stockpile, sold the stockpile, or reduced production so that there would have been no stockpile at the time the lease between Bar J Trucking and the Pueblo expired. Doc. 46 at 23, 27.

         Fisher intends to present evidence of the value of this stockpiled material through its vice-president, Michael Moehn. Fisher designated Moehn as a Fed.R.Civ.P. 30(b)(6) witness (Doc. 167 at 3) and provided an “Expert Disclosure on Fisher's Affirmative Claims” regarding Moehn's expected damages testimony (Doc. 159, Exh. A). Specifically, the expert notice stated:

Pursuant to Rule 26(a)(2)(C), Mr. Moehn will testify regarding the amount of damages that Fisher sustained as a result of having been forced by Bar J S&G to abandon a large stockpile of materials in or around January 2015. Specifically, Mr. Moehn will testify about the value of the inventory that Fisher was forced to abandon as well as the economic losses incurred by Fisher.
Mr. Moehn will testify that the value of the inventory that Fisher was forced to abandon was $3, 094, 964.08. Mr. Moehn's testimony regarding the value of the inventory is based on his knowledge of the materials that were abandoned and the value of those materials.
Mr. Moehn will testify that Fisher's economic losses were $2, 551, 573.44. Mr. Moehn's testimony regarding Fisher's economic losses is based on his knowledge of the costs associated with the production of the materials that were abandoned as well as the amounts of the materials.

Doc. 159, Exh. A. Bar J argues that this expert notice is deficient and, as a result, requests the Court to strike the disclosure and prohibit Moehn from testifying regarding the value of the stockpiled inventory and about Fisher's economic losses that resulted from abandoning this inventory. Doc. 159.

         II. Analysis

         Resolution of Bar J's motion to strike turns on whether Moehn is an expert witness and, if he is, whether he is the type described in Fed.R.Civ.P. 26(a)(2)(C), for whom limited disclosure is required, or the type described in Fed.R.Civ.P. 26(a)(2)(B), for whom more comprehensive disclosure is required. The Court easily concludes that Moehn's testimony is not the type for which comprehensive disclosure is required under Rule 26(a)(2)(B). Whether Moehn's testimony constitutes lay witness opinion testimony or expert testimony governed by Rule 26(a)(2)(C) is a closer question. The Court need not resolve this latter question, however, as it concludes that, regardless of which applies, Moehn's testimony should not be prohibited.

         Rule 26(a)(2)(B) applies to experts “retained or specially employed to provide expert testimony in the case or one whose duties as the party's employee regularly involve giving expert testimony.” The Rule requires such experts to prepare a written report that meets a number of listed requirements. Fed.R.Civ.P. 26(a)(2)(B)(i)-(vi). The record does not support a finding that Fisher employed or retained Moehn to provide expert testimony or that Moehn's duties regularly involve giving expert testimony. Rather, the record indicates that Moehn's regular duties during the time period in question included valuing the material Fisher produced and determining how much inventory to keep on hand. See Doc. 167 Exh. 4 at 2-4, Exh. 6 at 2-6; Doc. 170-2 at 2-3. Thus, Moehn's testimony is not subject to the requirements of Rule 26(a)(2)(B).

         Turning to whether Moehn's anticipated testimony constitutes lay witness opinion testimony or expert testimony governed by Rule 26(a)(2)(C), the Court initially notes that Fisher designated Moehn as a company representative pursuant to Fed.R.Civ.P. 30(b)(6). It asserts that Moehn “was actively involved in all aspects of the operation of the Mine, including but not limited to the sales prices, the financials, and the production.” Doc. 167 at 8. Further, Fisher presents evidence that part of Moehn's responsibilities included pricing material and determining how much inventory to keep on hand. Id. at 8-9. Thus, Moehn appears to be the employee Fisher believes is most qualified to assess the value of the stockpiled inventory.

         In its reply, Bar J disputes Fisher's assessed value of the stockpile. It argues that the stockpile is actually waste material. Doc. 170 at 3, 9. Bar J further attacks Fisher's valuation of the stockpile by noting that Fisher's valuation purportedly averages the value of various products without providing the underlying data to support its calculations -- thereby rendering its average valuation unreliable. Doc. 170 at 2, 4, 7. Bar J also argues Fisher's valuation is unreliable because no market actually existed for the stockpiled material Fisher claims it could have sold. Doc. 170 at 3. All of this may provide fertile ground for the cross-examination of Fisher's representative, Moehn, who will testify about how Fisher valued the stockpiled material. That Bar J has such avenues for cross-examination, however, does not mean that Moehn's testimony should be excluded on the basis that Fisher failed to provide sufficient disclosure of his expected testimony.[2]

         Fisher asserts that its damages are based on factual information it provided Bar J as part of its initial disclosures and that support for these damages does not require expert testimony. Doc. 167 at 1. It claims that it only declared Moehn to be an employee expert out of an abundance of caution. Id. Moehn's damage testimony, it argues, “is not based on any scientific, technical, or other specialized knowledge” but rather on Moehn's “personal knowledge of Fisher's operations at the Mine . . ...


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