Opinion ID: 715777
Heading Depth: 3
Heading Rank: 1

Heading: Reliability of FDIC Expert Royce

Text: 23 Under Connecticut law, in a proceeding for a deficiency judgment, the plaintiff has the burden of proof of establishing, by a preponderance of the evidence, the value of the foreclosed property as of the date of the vesting of title to the property. See Eichman v. J & J Bldg. Co., 216 Conn. 443, 449, 582 A.2d 182, 185 (1990). The Connecticut courts have refused deficiency judgments where the plaintiff's valuation evidence has been found to be incredible. See, e.g., Farmers & Mechanics Sav. Bank v. Durham Realty, Inc., 34 Conn.App. 204, 640 A.2d 1017 (1994). 24 In its case-in-chief, the FDIC offered the testimony of expert Robert Royce. Royce valued the real estate on the basis of a sale of all of the property to a single purchaser and testified that he used a valuation methodology that was a blend of two approaches to valuation: direct sales comparison and income capitalization. Suna alleges that Royce's testimony was neither credible nor reliable. 25 Federal Rule of Evidence 702 provides as follows: 26 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. 27 It is well-established that expert testimony must be based upon reliable theories or principles. Glen Weissenberger, Federal Evidence 346 (2d ed.1995) (collecting cases). The Supreme Court recently stated as much in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, ----, 113 S.Ct. 2786, 2799, 125 L.Ed.2d 469 (1993) (the trial judge [has] the task of ensuring that an expert's testimony both rests on a reliable foundation and is relevant to the task at hand). However, the Daubert Court also made clear that  'general acceptance' is not a necessary precondition to the admissibility of scientific evidence under the Federal Rules of Evidence and that the Federal Rules of Evidence superseded the general acceptance test of Frye v. United States, 293 F. 1013 (D.C.Cir.1923). Daubert, 509 U.S. at ----, ----, 113 S.Ct. at 2793, 2799. The Court found that a rigid 'general acceptance' requirement would be at odds with the 'liberal thrust' of the Federal Rules and their 'general approach of relaxing the traditional barriers to opinion testimony.'  Id. at ----, 113 S.Ct. at 2794. However, the Court explained that [t]he adjective 'scientific' implies a grounding in the methods and procedures of science. Similarly, the word 'knowledge' connotes more than subjective belief or unsupported speculation. Id. at ----, 113 S.Ct. at 2795. 28 The Daubert Court stated that, in applying Rule 702, district courts should consider several factors: (1) whether the theory or technique can be (and has been) tested; (2) whether the theory or technique has been subjected to peer review and publication; and (3) the known or potential rate of error associated with a particular scientific technique. Id. at ---- - ----, 113 S.Ct. at 2796-97. The Court was, however, careful not to presume to set out a definitive checklist or test. Id. at ----, 113 S.Ct. at 2796. For example, the Court stated that [p]ublication ... does not necessarily correlate with reliability; that in some instances well-grounded but innovative theories will not have been published; and that [s]ome propositions ... are too particular, too new, or of too limited interest to be published. Id. at ----, 113 S.Ct. at 2797. The Daubert Court expressed confidence in the capacity of federal judges to make the appropriate validity and relevance inquiries. 29 Suna argues that Royce's opinion testimony was based upon a developmental analysis unknown to appraisal literature, unique to him and on factual assumptions which were without any reasonable foundation. The FDIC accurately notes that it was the job of the magistrate judge hearing the case to make the determinations about reliability and relevancy. We should not disturb the findings of Magistrate Eagan unless they are clearly erroneous. See Carter v. South Cent. Bell, 912 F.2d 832, 841 (5th Cir.1990) (A magistrate trying a case with the consent of the parties is entitled to the same deference that is given to findings of a district judge.), cert. denied, 501 U.S. 1260, 111 S.Ct. 2916, 115 L.Ed.2d 1079 (1991); see also American Soc'y of Composers, Authors & Publishers v. Showtime/The Movie Channel, Inc., 912 F.2d 563, 569 (2d Cir.1990). While Royce's testimony is lengthy and not as clear as we might wish, there is ample evidence to support the position taken by the district court. For example, Royce testified at several points that the valuation method he used was a hybrid of two widely-recognized methods and was the most appropriate method for valuing the class of property at issue. Suna argues that certain portions of Royce's testimony contradicted other portions. While this may in fact be true, it was for the district court, in its discretion, to determine the relative weight to place on the differing portions of the testimony. We are unable to conclude that Magistrate Eagan abused his discretion in finding that Royce's testimony was reliable and relevant.