United States District Court, S.D. Mississippi, Eastern Division
CARIBBEAN UTILITIES COMPANY, LTD. PLAINTIFF
HOWARD INDUSTRIES, INC., a Mississippi profit corporation, DEFENDANT
MEMORANDUM OPINION AND ORDER
STARRETT UNITED STATES DISTRICT JUDGE.
cause came before the Court on Defendant's Motion to
Exclude Ken Lefoldt's Damages Opinions . The motion
has been fully briefed [122, 136]. Having reviewed the
parties' submissions, the relevant legal authority and
otherwise being fully advised in the premises, the Court
finds that the motion will be granted in part.
case arises from electrical transformers manufactured by the
Defendant, Howard Industries, Inc. (“Howard”),
which Plaintiff, Caribbean Utilities Company, Ltd.
(“CUC”), alleges are defective. At issue
presently is expert testimony provided by CUC's expert,
Kenneth Lefoldt, Jr., a CPA who has provided opinions
regarding CUC's damages in a report dated March 1, 2019
and who was deposed on May 15, 2019. He has opined regarding
a method for quantifying the damages CUC has incurred because
of transformers that were allegedly defective. It is Mr.
Lefoldt's opinion that the remaining book value is an
appropriate method for capturing the value lost, which he
computes using a “straight line depreciation”
approach. Straight line depreciation is calculated by taking
the initial installed cost of an asset and spreading that
cost equally throughout the presumed useful life of the
asset. The net book value remaining when the asset is taken
out of service is arguably the amount of value in the asset
that CUC was unable to realize and for which it seeks
report, Mr. Lefoldt assumed a 30-year life
expectancy for the transformers and for his damage
calculations presumed that the 3, 856 Howard pole-mounted
transformers and the 582 pad-mounted
transformers at issue were taken out of service by
December 31, 2016.However, deposition testimony from CUC
corporate representative, David Watler, reveals that as of
March 7, 2019, there were only approximately 1, 000
pole-mounted transformers that had been taken out of
service. CUC's Clifton Rose testified that when
he left CUC in August 2018, the removal of Howard pad-mounted
transformers had not begun. CUC's expert, Bastiaan E.
Cornelissen testified that in about May 2019 he observed
close to 200 pad-mounted transformers “all over the
island.” CUC states in its opposition brief that
the replacement of all Howard transformers is currently
scheduled to conclude “around 2021 or 2022.”
 at p. 2. Mr. Lefoldt testified, “this is ---a
snapshot is a point in time. I think as we get closer to
trial, I think my numbers would have to be revised to reflect
the reality of what's actually . . . taking place up
until trial.” [106-2] at 41:1-20.
argues that Mr. Lefoldt was required to provide a complete
statement of all of his opinions pursuant to Federal Rule of
Civil Procedure 26(A)(2)(B)(i). The report was inaccurate at
the time it was authored, and because of that, Mr.
Lefoldt's opinions should be excluded. CUC responds that
Howard's motion is untimely; that there is no basis for
excluding Mr. Lefoldt's testimony regarding the
methodology used; no supplementation was required; and that
Mr. Lefoldt's testimony as to the damage numbers, while
helpful to the jury, is not required.
Timeliness of Howard's Motion
argues that Howard's motion is untimely because it did
not challenge the adequate disclosure of the expert witness
within the thirty days before the discovery deadline as
required by Local Uniform Civil Rule 26(a)(3). However,
CUC's argument misses the mark. Howard is not complaining
that the disclosure of Mr. Lefoldt was either improper or
incomplete. The disclosure apparently was done appropriately.
The gravamen of Howard's complaint with Mr. Lefoldt's
opinions is that they are unreliable and CUC is now precluded
from supplementing. Parties may challenge other parties'
experts prior to the deadline set forth for dispositive
motions, which Howard has done. On May 31, 2019, the deadline
for dispositive motions was reset to July 8, 2019 .
Howard's motion challenging these opinions was filed on
July 8, 2019. Therefore, the motion is not untimely.
The Reliability Mr. Lefoldt's Opinions Regarding Total
argues that Mr. Lefoldt's opinions of multi-million
dollars in losses should be excluded because they are
inaccurate in that they do not reflect the reality of the
situation based on testimony from CUC's own
representatives. The Court finds that the argument is one of
reliability. When evaluating expert testimony, the
overarching concern is whether the expert testimony is
“relevant” and “reliable.” Smith
v. Goodyear Tire & Rubber Co., 495 F.3d 224, 227
(5th Cir. 2007) (citing Daubert v. Merrell Dow Pharm.,
Inc., 509 U.S. 579 (1993)). The standards set forth in
Daubert fittingly align with Federal Rule of
Evidence 702, which states that an expert witness may testify
[i]f 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 on 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
testimony “must be reliable at each and every step or
it is inadmissible. The reliability analysis applies to all
aspects of an expert's testimony: the methodology, the
facts underlying the expert's opinion, the link between
the facts and the conclusion, et alia.” Pearson v.
Wal-Mart Stores, Inc., No. 2:17-CV-144-KS-MTP, 2019 WL
2373201, at *2 ...