United States District Court, N.D. Illinois, Eastern Division
JOHN P. SULLIVAN, D.D.S, J.D., and STEPHEN D. HELM, Plaintiffs,
ALCATEL-LUCENT USA INC., a Delaware Corporation, Defendant.
MEMORANDUM OPINION AND ORDER
AMY J. ST. EVE, District Judge.
Defendant Alcatel-Lucent USA, Inc. ("Lucent" or "Defendant") has moved to strike portions of the written report of Plaintiffs' expert, Brian P. Liston, and to bar related testimony pursuant to Federal Rule of Evidence 702 and Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). For the reasons discussed below, the Court grants Lucent's motion.
Lucent owns commercial property in Naperville, Illinois ("Naperville Property") (R. 93, Pls.' Rule 56.1 Stmt. Facts ¶ 3) and decided, in late 2010 or early 2011, to contest the 2010 real estate tax assessment of that property. (R. 104, Def. Rule 56.1 Stmt. Add'l Facts ¶ 3). Following an unsuccessful appeal on the 2010 tax assessment, Plaintiff John Sullivan, an attorney who had assisted with the processing of Lucent's appeal, had a discussion with the Lisle Township Assessor, John Trowbridge ("Trowbridge"), who proposed a settlement offer reducing the 2010 and 2011 tax assessment for the Naperville Property. (Def. Stmt. Add'l. Facts ¶ 7.) Sullivan recommended to Lucent's in-house counsel, Lewis Lefkowitz ("Lefkowitz"), that Lucent decline the offer and file an appeal of the 2010 assessed valuation of the Naperville Property with the state review board. (R. 104-1, Feb. 6, 2011 Email.) Sullivan wrote to Lefkowitz that "Steve Helm and I would negotiate a contingent fee agreement to represent ALU on this (similar to the Forest Preserve agreement but with the % fee based on the 1st year savings only)." ( Id. )
Lefkowitz retained Sullivan and Plaintiff Stephen Helm to prosecute the appeal in front of the Illinois Tax Appeal Board ("PTAB"). (Pl. Stmt. Facts ¶ 8.) The parties entered into a contingent fee agreement which provided that Plaintiffs' fee "will be structured as a fee contingent on savings on the current year's taxes in these actions as follows: (a) 25% of such amount if the matter is settled or otherwise resolved prior to trial; or (b) 30% of such amount if the matter is settled or otherwise resolved after trial." (R. 89-7, Contingent Fee Agreement.)
On April 18, 2011, Plaintiffs filed before the PTAB a Commercial Appeal for Assessment Year 2010 for the Naperville Property on behalf of Lucent. (Pl. Stmt. Facts ¶ 27.) The City of Naperville and School District 203 intervened in the PTAB Appeal because they already had received funds from Lucent's 2010 real estate taxes on the Naperville Property. (Pl. Stmt. Facts ¶ 41.) On or about October 27, 2011, the Lisle Township Assessor assessed the value of the Naperville Property for the 2011 calendar year at $42, 829, 710, which represented an increase of the $160 over the 2010 assessed value. ( Id. ¶¶ 29-31.) On November 21, 2011, Lucent executed a "Letter of Authority to Act in Matters of Property Taxation" that appointed Sullivan to represent Lucent as its property tax agent with respect to the Naperville Property. (R. 89-16, Letter of Authority.) Pursuant to that Letter of Authority, on November 23, 2011, Plaintiffs filed an appeal for Tax Year 2011 with the DuPage County Board of Review ("2011 Assessment Appeal"). (Pl. Stmt. Facts ¶ 35.) The parties did not execute a new agreement to address Plaintiffs' work negotiating the 2011 Assessment. (Pl. Stmt. Facts ¶ 58.)
After filing the 2011 Assessment Appeal, Plaintiffs began negotiating with Trowbridge regarding the 2010 PTAB Appeal and the 2011 Assessment Appeal. ( Id. ¶ 37.) Plaintiffs successfully negotiated a comprehensive settlement agreement ("Comprehensive Settlement") that traded reduced stipulated assessments for the Naperville Property for Assessment Years 2011, 2012, and - in return for Lucent's agreement to withdraw the pending 2010 PTAB Appeal. ( Id. ¶ 40.) The parties intended for the Comprehensive Settlement to satisfy the City of Naperville and School District 203. ( Id. ¶ 41.)
Lucent approved the Comprehensive Settlement and accepted the 2011, 2012, and - stipulations of agreed assessed value for the Naperville Property in return for its agreement to withdraw the 2010 PTAB appeal. (R. 105, Def. Resp. to Pl. Stmt. Facts ¶ 52.) Plaintiffs estimate that the Comprehensive Settlement saved Lucent $910, 999.90 for the 2011 tax year and $1, 100, 028 for the 2012 tax year, and that it would save Lucent $1, 100, 028 for the - tax year. ( Id. ¶¶ 53, 54.) Additionally, the Comprehensive Settlement also provided Lucent with stipulated assessed values for the Naperville Property that were 38% lower in 2012 and 40% lower in - than the most recent assessed value. (Pl. Stmt. Facts ¶ 56)
Internal discussions between Lucent employees acknowledged Plaintiffs' entitlement to 25% of Lucent's 2011 tax savings. ( See Pl. Stmt. Facts ¶¶ 63, 69; R. 89-30, Feb. 12, 2012 Email.) Internal discussions, however, also acknowledged uncertainty with respect to Plaintiffs' entitlement to the 2012 and - tax savings. ( See R. 89-30, Feb. 12, 2012 Email; R. 89-32, May 29, 2012 Email; R. 89-31.) In July 2012, Lucent notified Plaintiffs that the 2011, 2012, and - tax savings were not governed by the contingent fee structure in the original Engagement Agreement, and rejected Plaintiffs' proposed fee of $500, 000. (R. 89-36, July 12, 2012 Letter)
On September 7, 2012, Plaintiffs filed their original three-count complaint in this matter. (Def. Stmt. Add'l Facts ¶ 24.) In Count I, Plaintiffs alleged a breach of contract claim for the 2011 tax savings based on the contingent fee agreement ("Agreement") with Lucent. In Count II, Plaintiffs alleged an anticipatory breach of contract claim for the 2012 and - tax savings based on work they performed on Lucent's behalf pursuant to the Agreement. In the alternative, in Count III, Plaintiffs alleged an unjust enrichment claim for tax savings that Plaintiffs secured for Lucent for tax years 2011, 2012, and 2013.
Plaintiffs and Defendant filed competing motions for summary judgment on each of the three counts. On May 6, 2013, the Court granted Plaintiffs' motion for summary judgment as to Count I in the amount of $227, 749.97, finding that the undisputed facts established that the parties intended for the Agreement to entitle Plaintiffs to 25% of the tax savings they negotiated for the Lucent for the 2011 tax year. (R. 149.) The Court denied summary judgment on Counts II and III because issues of fact exist. Plaintiffs subsequently moved to voluntarily dismiss Count III, and the Court granted the motion. (R. 178.)
Plaintiffs engaged Brian P. Liston as one of their two burden-of-proof experts. (R. 131-1, Liston Expert Rep.) Liston, along with attorney Gregory J. Lafakis, submitted an expert report regarding the dispute at issue here. Liston is an attorney who has experience in the fields of eminent domain and property tax appeals. (R. 131-1, Liston CV.) The report consists of their summary of the dispute as well as six opinions and the underlying bases for those opinions. ( Id. ¶ 7.) After submitting the joint expert report, Plaintiffs withdrew Mr. Lafakis as an expert. (R. 131-2, Nov. 5, 2013 email.)
"The admissibility of expert testimony is governed by Federal Rule of Evidence 702 and the Supreme Court's opinion in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993)." Lewis v. Citgo Petroleum Corp., 561 F.3d 698, 705 (7th Cir. 2009). Rule 702 provides, in relevant part, that "[i]f scientific, technical or other specialized knowledge will assist the trier of fact[, ]... a witness qualified as an expert by knowledge, skill, experience, training or education, may testify thereto in the form of an opinion...." Id . See also Happel v. Walmart Stores, Inc., 602 F.3d 820, 824 (7th Cir. 2010). "The proponent of the expert bears the burden of demonstrating that the expert's testimony would satisfy the Daubert standard" by a preponderance of the evidence. Lewis, 561 F.3d. at 705.
Under the expert-testimony framework, courts perform the gate-keeping function of determining whether the expert testimony is both relevant and reliable prior to its admission at trial. See id.; United States v. Pansier, 576 F.3d 726, 737 (7th Cir. 2009) ("To determine reliability, the court should consider the proposed expert's full range of experience and training, as well as the methodology used to arrive [at] a particular conclusion."). In doing so, courts "make the following inquiries before admitting expert testimony: first, the expert must be qualified as an expert by knowledge, skill, experience, training, or education; second, the proposed expert must assist the trier of fact in determining a relevant fact at issue in the case; third, the expert's testimony must be based on sufficient facts or data and reliable principles and methods; and fourth, the expert must have reliably applied the principles and methods to the facts of the case." Lees v. Carthage College, 714 F.3d 516, 521-22 (7th Cir. 2013); see also Stollings v. Ryobi Tech., Inc., 725 F.3d 753, 765 (7th Cir. 2013); Pansier, 576 F.3d at 737.
In assessing the admissibility of an expert's testimony, the Court's focus "must be solely on principles and methodology, not on the conclusions they generate." Winters v. Fru-Con Inc., 498 F.3d 734, 742 (7th Cir. 2007) (quoting Chapman v. Maytag Corp., 297 F.3d 682, 687 (7th Cir. 2002)). "The goal of Daubert is to assure that experts employ the same intellectual rigor' in their courtroom testimony as would be employed by an expert in the relevant field." Jenkins v. Bartlett, 487 F.3d 482, 489 (7th Cir. 2007) (quoting Kumbo Tire Co., Ltd. V. Carmichael, 526 U.S. 137, 152 (1999)). "A Daubert inquiry is not designed to have the district judge take the place of the jury to decide ultimate issues of credibility and accuracy." Lapsley v. Xtek, Inc., 689 F.3d 802, 805 (7th Cir. 2012).
Defendant challenges specific statements and opinions in Mr. Liston's report on two grounds: (1) that they are unrelated to his expertise, and (2) that they are legal opinions and conclusory in nature.
I. Brian Liston
Brian Liston is a licensed attorney in the state of Illinois, and has been practicing since 1991. (Liston CV.) He is currently a partner in The Law Offices of Liston & Tsantilis, P.C. in Chicago Illinois, and focuses his practice on the areas of eminent domain litigation, property tax appeals and incentives for land use. ( Id. ) Liston represents large companies and landowners in eminent domain and property ...