Relevant case background
The dispute in BCD Associates, LLC v. Crown Bank arose out of the acquisition and renovation of a hotel. The plaintiff, BCD Associates, LLC, was hired as a general contractor for the hotel renovation project by a non-party to the litigation. The defendant, Crown Bank, funded the project.
The plaintiff initiated a lawsuit in the Delaware Superior Court on November 6, 2015 for breach of contract and related claims involving the project. The defendant asserted counterclaims against the plaintiff for fraud and conspiracy. The bench trial of the case is set to begin August 16, 2021.
During the litigation, the defendant retained an expert who is a professional engineer with 30 years of engineering and commercial construction management experience. The defendant’s expert prepared a report opining that the plaintiff: (i) entered a construction contract knowing that the fixed price was insufficient to complete the project; (ii) concealed costs; (iii) submitted misleading applications for payment; (iv) incurred less than a specified amount of costs during a specified timeframe; and (v) generated excessive costs by failing to manage the project competently.
The plaintiff moved to preliminarily exclude the expert’s report and testimony, arguing that his opinions were legal or generally factual and unsupported by the evidentiary record.
The Delaware Superior Court’s decision
The court discussed admissibility of expert testimony under Delaware Rule of Evidence 702:
If scientific, technical or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training or education may testify thereto in the form of an opinion or otherwise, if (1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case.
The court also discussed its gatekeeping role under the Daubert standard of ensuring that expert testimony is relevant, reliable, and will assist the trier of fact:
The witness is qualified as an expert by knowledge, skill experience, training or education; (ii) the evidence is relevant and reliable; (iii) the expert’s opinion is based upon information reasonably relied upon by experts in the particular field; (iv) the expert testimony will assist the trier of fact to understand the evidence or to determine a fact in issue; and (v) the expert testimony will not create unfair prejudice or confuse or mislead the jury.
In a jury trial, Delaware courts find considerable merit to the gatekeeping role envisioned by Rule 702, which protects against the risk of prejudice and can promote efficiency. But when the judge who rules on the gatekeeping motion is also the factfinder, there is often little value in making a preliminary determination about the reliability of an opinion, ostensibly to answer the question of admissibility. Delaware courts, like in BCD Associates, often find the better course is to make a more informed determination after hearing the expert, then give the opinion the weight it is due.
The court in BCD Associates denied the plaintiff’s motion to exclude the expert’s report and testimony, noting that while the expert’s opinions could be interpreted as stating legal conclusions, concerns of jury confusion were not present because of the nature of the bench trial, as opposed to a jury trial. For example, the court noted that considerations of jury confusion due to the expert’s use of terms such as “misleading” – which otherwise could be interpreted as stating legal rather than factual conclusions – were obviated in this case.
The court also noted that the plaintiff would have the opportunity to challenge the expert’s methods and qualifications on cross-examination, and the judge could consider any shortcomings in the expert’s testimony that were drawn out through that cross-examination. A judge is better able than a jury to separate the relevant and competent evidence from the irrelevant and incompetent. The court can receive disputed evidence subject to post-trial rulings on admissibility.
The court also determined that the expert’s testimony qualified under the applicable legal test as relevant, reliable, and likely to assist the trier of fact. In fact, the court observed that the expert’s experience and training could be helpful on issues, such as the adequacy of funding.
Client Alert 2021-210
- Expert testimony must be relevant, reliable, and likely to assist the trier of fact.
- Delaware courts are often hesitant to preliminarily exclude expert reports and testimony in a bench trial, as opposed to a jury trial, because concerns of undue prejudice and jury confusion are not present when the judge acts as both the gatekeeper and the factfinder.
- A judge, as opposed to a jury, is better able to separate the relevant and competent evidence from the irrelevant and incompetent, so the gatekeeper function in advance of allowing an expert to testify is more attenuated in a bench trial.