Litigating the AIA Forms
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1 Litigating the AIA Forms Patrick Greene, Jr. Peckar and Abramson PC River Edge, NJ Howard G. Goldberg Goldberg & Banks PC Pikesville, MD Kristen Sherwin Winstead PC Dallas, TX Paul D. Wilson Associate Justice of the MA Superior Court Boston, MA
2 Litigating The AIA Forms Oscar Owner vs Cautious Contractor The Admissibility of Expert Testimony on Interpretation of AIA Provisions Motion to Exclude Testimony Admissibility Hearing
3 MOTION TO EXCLUDE EXPERT TESTIMONY OF HOWARD G. GOLDBERG REGARDING INTERPRETATION AND APPLICATION OF CONTRACT PROVISIONS
4 This Court Should Preclude Proposed Expert Testimony Regarding the Meaning of the Contract Terms 1.The testimony does not meet the standards of Fed. R. Ev The testimony involves questions of law to be applied by the court and is not the proper subject of expert testimony
5 It is well-established that the trial court serves the key role of gatekeeper in connection with the admissibility of expert testimony. Daubert v. Merrell Dow Pharms, Inc., 509 U.S. 579, (1993)
6 The test for admissibility under Rule 702 of the Federal Rules of Evidence has three parts. [A]fter determining that a witness is qualified as an expert to testify as to a particular matter, and that the opinion is based upon reliable data and methodology, the court must then determine whether the expert s testimony (as to a particular matter) will assist the trier of fact. Nimely v. City of New York, 414 F.3d 381, 397 (2d Cir. 2005)
7 Three Part Test: 1.Witness is "qualified" as an expert; 2.Opinion is based upon reliable data and methodology; and 3.Will assist the trier of fact to understand the evidence or to determine a fact in issue.
8 The Proffered Testimony Fails The Test 1.Assuming that Mr. Goldberg is qualified; 2.His opinion is not based upon reliable data and methodology; and 3.His testimony will not assist the trier of fact to understand the evidence or to determine a fact in issue.
9 The "Expert's" Opinion Is Not Based Upon Reliable Data And Methodology 1.The proffered opinion is not based on any study or reliable data merely the expert's personal experiences with the usages of contract language; 2.There is no established "industry practice" or "custom and usage" that would assist the trier of fact in resolving an ambiguity even if there were an ambiguity which there is not.
10 The "Expert" Testimony Will Not Assist The Trier Of Fact To Understand The Evidence Or To Determine A Fact In Issue 1.Interpretation of the Contract is a legal question for the court to decide not an issue of fact for the jury; 2.For this reason, courts ordinarily preclude proposed expert testimony regarding the meaning of the contract terms.
11 RESPONSE TO MOTION TO EXCLUDE EXPERT TESTIMONY OF HOWARD G. GOLDBERG REGARDING INTERPRETATION AND APPLICATION OF CONTRACT PROVISIONS
12 This Court Should Permit Goldberg s Expert Testimony Under Fed. R. Ev. 702 and Daubert v. Merrell Dow Pharms., 509 U.S. 579 (1993), Goldberg is a qualified expert by his knowledge, skill, experience, training, and education; his testimony is relevant to the issues in the litigation; and will assist the trier of fact in reaching its ultimate conclusion.
13 Legal Standard for Admission of Expert Witness 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. Ev. 702.
14 Fed. R. Ev. 702 Expert Determinations The touchstone of Fed. R. Ev. 702 is helpfulness of the expert testimony. The Court has broad discretion in making Fed. R. Ev. 702 determination of admissibility. Most importantly, the expert testimony must be sufficiently reliable and relevant to be helpful to the finder of fact. Expert evidence is not inadmissible merely because it embraces an ultimate issue to be decided by a trier of fact.
15 Mr. Goldberg s Testimony Meets the Requirements for Admissibility 1.Mr. Goldberg is qualified; 2.Mr. Goldberg s testimony is relevant to the issues and will assist the trier of fact; and 3.Mr. Goldberg s testimony is reliable and not conclusory.
16 Mr. Goldberg is a Qualified Expert J.D., University of Maryland School of Law, 1971 Order of the Coif Practicing Construction Law since 1971 AAA Mediator since 1997 AAA Arbitrator since 1990 Member American College of Trial Lawyers Board of Governors of American College of Construction Lawyers Legal Counsel to the Documents Committee of the American Institute of Architects Assisted in drafting AIA form Construction Industry contract documents Honorary Member American Institute of Architects Prolific Author and Speaker on the AIA Construction Industry Documents
17 Mr. Goldberg s Testimony is Relevant to the Suit and Will Assist the Trier of Fact An expert can offer his/her opinion when the expert has specialized knowledge that will assist the trier of fact in understanding the evidence or determining a fact in issue. Here, Goldberg s testimony relates directly to his specialized knowledge with regard to the AIA form contract documents and such testimony will assist the trier of fact to make determinations upon ultimate liability issues by helping the trier of fact to: understand the customary responsibilities of the parties to the AIA form contract documents; and understand key technical terms in the construction industry used in the AIA form contract documents.
18 Mr. Goldberg s Testimony is Relevant to the Suit and Will Assist the Trier of Fact Mr. Goldberg s testimony is similar to that allowed in Rush Presbyterian St. Luke's Med. Ctr. v. Safeco Ins. Co., 722 F. Supp. 485, 497 (N.D. Ill. 1989) and Finer Space, LLLP v. Diamond H. Constr., LLC, No. H , 2008 U.S. Dist. LEXIS 4389 at *7 (S.D. Tex. 2008).
19 Mr. Goldberg s Testimony is Reliable & Not Conclusory An expert may testify in the form of an opinion even if the opinion embraces an ultimate fact issue. When interpreting an industry specific contract and construing a specific contractual term, courts must give consideration to the meaning attributed to that term in the industry. An expert is permitted to testify about the customs and usages in a specialized industry and to amplify the terms of a contract if customs and usages shed light on the meaning of those terms Construction Industry is such a specialized industry.
20 Mr. Goldberg s Testimony is Reliable & Not Conclusory Here, Mr. Goldberg s testimony does not reach that of a legal conclusion: Testimony will allow the trier of fact to reach an ultimate conclusion by explaining technical terms and customs of the construction industry as used in the AIA form contract documents. Similar to that permitted in: Western Industries, Inc. v. Newcor Canada Ltd., 739 F.2d 1198, (7th Cir. 1984); Pless v. Cleveland Wrecking Co., No. 01-CV- 0792, 2006 U.S. Dist. LEXIS (W.D.N.Y. September 18, 2006) Primavera Familienstiftung v. Askin, 130 F. Supp. 2d 450, 529 (S.D.N.Y. 2001); Rush Presbyterian St. Luke's Med. Ctr. v. Safeco Ins. Co., 722 F. Supp. 485, 497 (N.D. Ill. 1989); Lincoln Pulp & Paper Co. v. Dravo Corp., 436 F. Supp. 262, 271 (D. Me. 1977).
21 DAUBERT HEARING 21
22 Article 12.2 Correction of Work Before Substantial Completion The Contractor shall promptly correct Work rejected by the Architect or failing to conform to the requirements of the Contract Documents, discovered before Substantial Completion and whether or not fabricated, installed or completed. Costs of correcting such rejected Work, including additional testing and inspections, the cost of uncovering and replacement, and compensation for the Architect s services and expenses made necessary thereby, shall be at the Contractor s expense.
23 Article 12.2 Correction of Work After Substantial Completion In addition to the Contractor s obligations under Section 3.5, if, within one year after the date of Substantial Completion of the Work or designated portion thereof or after the date for commencement of warranties established under Section 9.9.1, or by terms of any applicable special warranty required by the Contract Documents, any of the Work is found to be not in accordance with the requirements of the Contract Documents, the Contractor shall correct it promptly after receipt of notice from the Owner to do so, unless the Owner has previously given the Contractor a written acceptance of such condition. The Owner shall give such notice promptly after discovery of the condition. During the one-year period for correction of Work, if the Owner fails to notify the Contractor and give the Contractor an opportunity to make the correction, the Owner waives the rights to require correction by the Contractor and to make a claim for breach of warranty. If the Contractor fails to correct nonconforming Work within a reasonable time during that period after receipt of notice from the Owner or Architect, the Owner may correct it in accordance with Section 2.5.
24 Article 12.2 Correction of Work After Substantial Completion (cont.) The one-year period for correction of Work shall be extended with respect to portions of Work first performed after Substantial Completion by the period of time between Substantial Completion and the actual completion of that portion of the Work
25 Article 12.2 Correction of Work After Substantial Completion (cont.) The one-year period for correction of Work shall not be extended by corrective Work performed by the Contractor pursuant to this Section 12.2.
26 Insurance: Exhibit A Requires Owner or Contractor to obtain and maintain property insurance written on builder s risk all-risk completed value or equivalent policy form Begins from premise that Owner will obtain and maintain property insurance, but allow parties to shift burden to Contractor Sufficient to cover the value of the entire Project on a replacement cost basis And existing structure in case of renovation or remodeling Maintained until Substantial Completion and thereafter continued or replaced through the Contractor s one-year period for correction of the Work
27 Insurance: Exhibit A Must include the interests of the Owner, Contractor, Subcontractors, and Sub-subcontractors and the interests of mortgagees as loss payees Owner assumes financial responsibility for any loss not covered because of deductibles or self-insured retentions
28 Insurance: A201 Article 11 New provisions on adjustment and settlement of loss covered by property insurance: Loss adjusted by and payable to the Owner as fiduciary Prior to settlement Owner notifies Contractor of proposed settlement and proposed allocation of proceeds Contractor has 14 days to object If Contractor does not object, the Owner settles and Contractor bound by settlement and allocation If Contractor timely objects, Owner may proceed to settle the loss and dispute between Owner and Contractor is resolved per the Claims and Disputes provisions
29 Article Failure to Purchase Required Property Insurance If the Owner fails to purchase and maintain the required property insurance, with all of the coverages and in the amounts described in the Agreement or elsewhere in the Contract Documents, the Owner shall inform the Contractor in writing prior to commencement of the Work. Upon receipt of notice from the Owner, the Contractor may delay commencement of the Work and may obtain insurance that will protect the interests of the Contractor, Subcontractors, and Sub-Subcontractors in the Work. When the failure to provide coverage has been cured or resolved, the Contract Sum and Contract Time shall be equitably adjusted. In the event the Owner fails to procure coverage, the Owner waives all rights against the Contractor, Subcontractors, and Sub-subcontractors to the extent the loss to the Owner would have been covered by the insurance to have been procured by the Owner. The cost of the insurance shall be charged to the Owner by a Change Order. If the Owner does not provide written notice, and the Contractor is damaged by the failure or neglect of the Owner to purchase or maintain the required insurance, the Owner shall reimburse the Contractor for all reasonable costs and damages attributable thereto.
30 Article 7.3 Construction Change Directives A Construction Change Directive is a written order prepared by the Architect and signed by the Owner and Architect, directing a change in the Work prior to agreement on adjustment, if any, in the Contract Sum or Contract Time, or both. The Owner may by Construction Change Directive, without invalidating the Contract, order changes in the Work within the general scope of the Contract consisting of additions, deletions, or other revisions, the Contract Sum and Contract Time being adjusted accordingly.
31 Evidence of Owner s Financial Arrangements Contractor entitled to financial assurances before commencement of Work. Contractor entitled to renewed assurances: Owner has failed to pay money when due Contractor has reasonable basis to question Owner s ability to pay There is a material change in the Work 31
32 JUDGE S RULING 32
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