Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca8-14-02943/USCOURTS-ca8-14-02943-0/pdf.json

Parties Involved:
Auto Handling Corp.
Appellee
Cottrell
Appellee
Deborah Taylor
Appellant
Timmy A. Taylor
Appellant

Document Text:

United States Court of Appeals

For the Eighth Circuit

___________________________

No. 14-2943

___________________________

Timmy A. Taylor; Deborah Taylor

lllllllllllllllllllll Plaintiffs - Appellants

v.

Cottrell, INC.; Auto Handling Corp.

lllllllllllllllllllll Defendants - Appellees

____________

Appeal from United States District Court 

for the Eastern District of Missouri - St. Louis

____________

 Submitted: April 16, 2015

 Filed: July 29, 2015

____________

Before BYE and SMITH, Circuit Judges, and SCHILTZ, District Judge. 1

____________

BYE, Circuit Judge.

TimmyA. Taylor ("Taylor") and Deborah Taylor brought this action to recover

damages resulting from injuries Taylor sustained in two incidents involving a

Cottrell, Inc. ("Cottrell") truck trailer. Upon Cottrell's motion in limine, the district

The Honorable Patrick J. Schiltz, United States District Judge for the District 1

of Minnesota, sitting by designation.

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court excluded one of Taylor's expert witnesses, finding the doctor had entered into

an impermissible contingent-fee agreement which completely undermined any

testimony he might offer. The district court then found Taylor lacked sufficient

evidence to create a triable issue on his neck and back injury claims without an expert

opinion on damages and causation, entered summary judgment on those claims in

favor of Cottrell, and stayed the remaining claims. We conclude the district court

erred in excluding Taylor's expert witness and reverse.

I

On October 1, 2007, Taylor was injured while attempting to secure a vehicle

on a Cottrell car-hauling trailer. He underwent medical care for his injuries, which

eventually led him to Dr. James M. Odor for a surgical consultation. After an

examination, Dr. Odor advised Taylor that the best chance for improvement was

through surgery. On February 21, 2008, Dr. Odor operated on Taylor to complete a

two-level cervicalfusion. After an unsuccessful "trial program" to return to work and

some further treatment, on November 6, 2009, Taylor returned to work full-time

without restrictions.

On January 12, 2010, Taylor was again injured when he fell approximately ten

feet froma Cottrell trailer. He wastaken to the emergency room, where he underwent

x-rays and a CT scan. He was eventually discharged home with some pain

medication. The same month, Taylor reported to Dr. Odor with neck and back pain. 

After testing, Dr. Odor observed several disc protrusions and a disc desiccation. 

These injuries led to another complex spinal surgery with Dr. Odor in September

2012, the cost of which exceeded $450,000.

Meanwhile, Taylor commenced this action in state court on April 3, 2009,

which Cottrell timely removed to federal court based on diversity jurisdiction. After

Taylor suffered the second injury and underwent more treatment, he amended his

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claims. While the litigation spanned over several years, the relevant events for the

issues currently in dispute on appeal occurred in the span of a few months and relate

to the district court's exclusion of Taylor's treating physician and expert witness (Dr.

Odor) and the district court's grant of summary judgment on some claims in favor of

Cottrell.

On August 9, 2013, two weeks before trial was scheduled to begin, Cottrell

moved for a trial continuance, asserting it had recently uncovered copies of

agreements between Taylor's counsel and Dr. Odor which evidenced an

impermissible contingent-fee agreement. After a hearing on August 14, the district

court granted the motion and permitted additional discovery. On December 27, 2013,

Cottrell filed a motion to strike Dr. Odor's testimony, for sanctions related to the

alleged failure to disclose the contingent-fee agreements, and to dismiss the entire

case for fraud on the court. In its order granting Cottrell's motion to strike, the district

court explained it was "dismayed at the events detailed in [the] Motion" and found

there was a contingency agreement—not merely a lien on any proceeds from the

litigation—which undermined Dr. Odor's interest in the case so much that the "best

course of action [was] to exclude the testimony of Dr. Odor as an expert witness." 

Taylor v. Cottrell, No. 4:09-cv-00536-HEA, Dkt. No. 351, at 3-5 (E.D. Mo. Feb. 4,

2014). Cottrell then filed a motion to bar evidence of Taylor's damages based on the

testimony of Dr. Odor or dismiss the neck and low back claims that depended on his

testimony. The district court granted the motion, barring any testimony from Dr.

Odor and dismissing the claims for Taylor's neck and back injuries. The district court

then granted permission to file an interlocutory appeal pursuant to 28 U.S.C.

§ 1292(b), which this Court denied on May 1, 2014. Upon Cottrell's motion, the

district court then severed the claims related to the neck and back injuries, entered

judgment on those claims, stayed the claims related to Taylor'sshoulder injuries, and

certified the judgment for immediate appeal.

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II

We review a district court's exclusion of expert testimony for an abuse of

discretion, see Brooks v. Union Pac. R. Co., 620 F.3d 896, 899 (8th Cir. 2010), and

its findings of fact for clear error, see Jackson v. Allstate Ins. Co., 785 F.3d 1193,

1206 (8th Cir. 2015). Taylor argues the district court abused its discretion in

excluding Dr. Odor as an expert witness because there was no agreement for the

payment of his expert services made contingent on the outcome of the litigation, and

even if there was, it did not warrant exclusion. It is difficult to determine the precise

interest the district court believed existed in this case and why any bias as a result of

such an interest could not be adequately addressed with the jury through crossexamination. However, the issue isimmaterial because we conclude the district court

erred regardless of which interest it believed existed.

The parties disagree on whether a payment for an expert witness's services

made contingent on the outcome of the litigation serves to disqualify the witness. 

This appears to be an issue of first impression in this Court. Courts in other

jurisdictions have disagreed on whether such a contingent financial interest

automatically disqualifies, may serve to disqualify, or can never alone disqualify an

expert witness. Compare Straughter v. Raymond, No. 08-2170 CAS (CWx), 2011

WL 1789987, at *3 (C.D. Cal. May 9, 2011) ("The Court finds that the better course

of action is to exclude the testimony of expert witnesses in civil cases whose

compensation is contingent on the outcome of the case."); Farmer v. Ramsay, 159 F.

Supp. 2d 873, 883 (D. Md. 2001) (striking expert's reports because "witness

contingency fee agreements affirmatively violate the fundamental policy ofMaryland

and the United States" (internal quotation marks omitted)), aff'd on other grounds, 43

F. App'x 547, 551 n.5 (4th Cir. 2002) (not deciding whether it was proper to exclude

the expert report because it was unnecessary); Accrued Fin. Servs., Inc. v. Prime

Retail, Inc., No. CIV.JFM-99-2573, 2000 WL 976800, at *3 (D. Md. June 19, 2000)

("Financial arrangementsthat provide incentives for the falsification or exaggeration

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of testimony threaten the very integrity of the judicial process which depends upon

the truthfulness of the witnesses."); J & J Snack Foods, Corp. v. Earthgrains Co., 220

F. Supp. 2d 358, 367 n.8 (D.N.J. 2002) ("A contingent fee arrangement with an expert

witness would be unethical, and would undermine or destroy the reliability of the

survey design and execution."), with Tagatz v. Marquette Univ., 861 F.2d 1040, 1042

(7th Cir. 1988) ("It is unethical for a lawyer to employ an expert witness on a

contingent-fee basis but it does not follow that evidence obtained in violation of the

rule is inadmissible. The trier of fact should be able to discount for so obvious a

conflict of interest. In any event, there was no objection to Dr. Tagatz's testifying as

an expert witness, so we need not delve deeper into this intriguing subject." (internal

citations omitted)); Universal Athletic Sales Co. v.Am.Gym,Recreational& Athletic

Equip. Corp., 546 F.2d 530, 539 (3d Cir. 1976) ("[I]t does not necessarily follow that

any alleged professional misconduct on his part would in itself render his testimony

. . . a nullity."); Milfam II LP v. Am. Commercial Lines, LLC, No. 4:05-cv-0030-

DFH-WGH, 2006 WL 3247149, at *2 (S.D. Ind. Mar. 30, 2006) ("The Seventh

Circuit has not held such arrangements illegal per se but has instead left the trier of

fact to consider the credibility issues."); Valentino v. Proviso Twp., No. 01 C 557,

2003 WL 21510329, at *3 (N.D. Ill. June 26, 2003) ("Thus, the issue of Horstman's

compensation and his beliefs about his compensation only affect Horstman's

credibility as a witness, not the admissibility of his report and testimony."). Because

we find that no such contingent interest exists in this case, we need not further

address the issue.

It is not clear from the district court's order whether the district court believed

a contingent-fee agreement existed for Dr. Odor's expert witness services or for the

payment of past medical services performed by Dr. Odor. The district court broadly

referenced "a contingency fee arrangement with an expert witness," and stated

"payment of the expert," which suggest it thought the contingency was for the expert

witness services—not for the payment of prior medical services. Taylor, Dkt. No.

351, at 4. Additionally, the only authority the district court cited in support of

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exclusion was the Restatement (Third) of the Law Governing Lawyers § 117, which

prohibits a lawyer fromoffering or paying an expert witness consideration contingent

on the outcome of the litigation. Id. Thus, it appears the district court concluded Dr.

Odor's compensation for testifying in this case was made contingent on the outcome

of the litigation. However, the district court cited no evidence in the record to support

such a finding and our independent review of the record has not revealed any. To the

contrary, the undisputed record evidence showsthat Dr. Odor was paid an hourly rate

for his deposition testimony. Therefore, to the extent the district court barred Dr.

Odor from testifying because payment for his expert witness services was made

contingent on the outcome of the litigation, it clearly erred.

It is also possible to read the district court's order as excluding Dr. Odor based

on an agreement for the payment of the past medical expenses. In its order excluding

Dr. Odor, the district court held "Plaintiff's counsel entered into an agreement that Dr.

Odor's office would not get paid if Plaintiff did not recover anything from this

action." Id. at 1-2. The district court noted it was "dismayed at the events detailed

in Defendant's Motion" and rejected Taylor's argument that the arrangement was

merely "a lien on recovery in the event Plaintiffs do not pay Dr. Odor's fee." Id. at 4-

5. To the extent the district court found an agreement that payment of Taylor's

medical bills was contingent on a recovery through the litigation, it also was in error. 

The only evidence the parties rely on to show Dr. Odor had any interest in the case

relate to three "letters of protection" and the testimony of Sandy Weber, the business

manager for Dr. Odor's practice. Neither supports a finding that Taylor would not be

responsible for paying his past medical expenses should he fail to recover any

proceeds in this litigation.

The three "letters of protection" addressed to Dr. Odor, signed by Taylor's

various attorneys, represented that Taylor wished to continue with the treatment

advised by Dr. Odor even if it would not be covered by insurance and that he would

guarantee the payment of the medical services through any proceeds from workers

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compensation or litigation. Essentially, these letters provided a personal guarantee

for the payment of medical expenses and simply reaffirmed a lien on any future

recovery by Taylor. The letters themselves fail to establish that the payment of the

medical services was contingent on a favorable outcome in the litigation. Stated

another way, they do not demonstrate Taylor would not be responsible for paying the

medical bills should he fail to recover anything.

As to Weber's testimony, we believe the district court abused its discretion in

striking her supplemental affidavit submitted after her deposition which clarified and

placed into context her prior testimony. We do not permit a post-deposition affidavit

to contradict prior testimony in an attempt to create issues of fact. See, e.g., Popoalii

v. Corr. Med. Servs., 512 F.3d 488, 498 (8th Cir. 2008) ("We have held that '[i]f

testimony under oath . . . can be abandoned many months later by the filing of an

affidavit, probably no cases would be appropriate for summary judgment. A party

should not be allowed to create issues of credibility by contradicting his own earlier

testimony.'" (quoting Camfield Tires, Inc. v. Michelin Tire Corp., 719 F.2d 1361,

1365 (8th Cir. 1983)). But an affidavit may be submitted to clarify ambiguities or

confusion in deposition testimony. See City of St. Joseph, Mo. v. Sw. Bell Tel., 439

F.3d 468, 476 (8th Cir. 2006) (explaining a district court should not strike an affidavit

where it seeks to "explain portions of [the] deposition testimony that were unclear"

or when the "affidavit does not actually contradict [the] earlier testimony").

During her deposition, Weber testified it was standard practice for her to seek

letters of protection whenever a patient is pursuing litigation or workers

compensation and that she had been doing so for ten to eleven years. When asked to

explain the purpose of the letters of protection, she provided that they guarantee "if

the patient wins, that attorney wins, then they will payme fromthe settlement. If they

don't win, there's no money." She also made some statements that if Taylor failed to

recover anything through workers compensation orlitigation,Dr. Odor's office would

not get paid. However, at no time did she make any representation that Dr. Odor had

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in any way forfeited or waived his right to seek payment from Taylor. After her

deposition, Weber submitted a supplemental affidavit to the district court, clarifying

and putting into context her prior testimony by highlighting the difference between

the practical inability to get paid should Taylor fail to recover anything and the

affirmative act of forfeiting the right to seek payment. She explained that in her prior

testimony she meant that, as a practical matter, should Taylor fail to recover anything,

Dr. Odor's office would be unable to collect on the amount owed—not that Dr. Odor's

office had given up the right to collect. We do not believe Weber's affidavit

contradicted her prior testimony. Ourindependent reviewof her deposition testimony

firmly convinces usthat the selective quotes ofsome of her statements were taken out

of context by Cottrell and the district court. In her supplemental affidavit, Weber

sought to merely clarify her previously unclear and ambiguous testimony and place

it in a context evident from the deposition transcript. Other than Weber's ambiguous

deposition testimony, there is a complete lack of evidence in the record to even

suggest any agreement between Dr. Odor's office and Taylor that Taylor would only

be responsible for paying his medical expensesshould he recover any proceeds in the

litigation. Accordingly, we believe the district court abused its discretion in striking

Weber's affidavit. See Baker v. Silver Oak Senior Living Mgmt. Co., L.C., 581 F.3d

684, 690 (8th Cir. 2009) (holding district court erred in striking an affidavit where it

was not "directly contrary to her previous statements," and did not raise only a "sham

issue"). With Weber's testimony properly taken in context, there is simply no 2

evidence in the record that Taylor's payment for the past medical services was

contingent on the outcome of thislitigation. To the extent the district court held there

existed such an interest, it also clearly erred.

We also note that it wasthe hospital—not Dr. Odor's office—which placed the

2

$450,000 lien on any litigation proceeds. Since Weber did not work for the hospital

but only Dr. Odor's office, it is unclear how Taylor could avoid his obligations for the

medical expenses by merely agreeing with Dr. Odor's office.

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The only remaining interest Dr. Odor, himself, may have had is based on an

increased likelihood of receiving payment through the personal guarantee and

medical liens. But the practice of offering a personal guarantee for payment from

litigation proceeds or placing a lien on potential litigation proceeds is not uncommon. 

See, e.g., Yorgan v. Durkin, 715 N.W.2d 160, 165 (Wis. 2006) (explaining letters of

protection are "a common practice by which lawyers representing personal injury

plaintiffs ensure clients will receive necessary medical treatment, even if unable to

pay until the case is concluded" (internal quotation marks omitted)); Am. FamilyMut.

Ins. Co. v. Ward, 774 S.W.2d 135, 137 (Mo. 1989) ("If a hospital meets certain

requirements and follows certain proceduresit can obtain a lien on the personal injury

claims of its patients."). We do not believe that such a common interest generally

presents such a bias in a witness to overcome our general rule that such issues are to

be considered and evaluated by the jury, nor have we found any authority holding that

such an interest alone is a basis for exclusion. Cf. DiCarlo v. Keller Ladders, Inc.,

211 F.3d 465, 468 (8th Cir. 2000) (explaining that bias of an expert witness is the

province of the jury and can usually be addressed through effective crossexamination); Dorsey v. Greene, 922 So. 2d 121, 128 (Ala. Civ. App. 2005) (holding

it was legal error to disregard testimony of treating chiropractor based on financial

interest of unpaid bills); Kaplan v. Hanover Ins. Co., No. 09-ADMS-10010, 2009 WL

3069004, at *2 (Mass. App. Div. Sept. 21, 2009) (explaining that total exclusion of

treating chiropractortestimonywas unnecessary because he could be cross-examined

regarding his "financial stake in the outcome of the case").

In summary, the district court not only failed to articulate the precise interest

Dr. Odor had in the outcome of the litigation but also failed to explain why any such

interest overcomes the general rule that Dr. Odor's bias and credibility should be

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resolved by the jury. Therefore, on the record before us, we find an insufficient basis

to exclude Dr. Odor from providing an expert opinion.

3

III

For the reasons above, we find the district court erred in excluding Dr. Odor

from testifying as Taylor's expert witness. Accordingly, we also vacate the district

court's order granting summary judgment and remand for further proceedings not

inconsistent with this opinion.

______________________________

Cottrell assertsthat the district court could have—not that it must have—barred 3

Dr. Odor from testifying for several othersreasons, including: (1) fraud on the court;

(2) failure to comply with Rule 26 in disclosing him as a retained expert witness; and

(3) as a discovery sanction for failing to produce the letters of protection. The district

court rejected all these grounds for exclusion without any analysis and barred Dr.

Odor's testimony only based on the alleged contingency agreement. We will not

impose the harsh sanction of exclusion for these other alternative reasons when the

district court declined to do so.

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