Opinion ID: 865927
Heading Depth: 2
Heading Rank: 1

Heading: Admissibility of the Morgan Settlement Matrix

Text: ¶22. The Morgan Matrix is obviously an out-of-court statement. The document shows the thirteen classifications and corresponding settlement amounts that Morgan used to distribute the $39-million payment received from AHP. Therefore, if offered for the purpose of establishing the fact of those classifications and settlement amounts, it would certainly constitute hearsay. The plaintiff-appellants did not argue in the trial court—nor do they argue on appeal—that the Morgan Matrix nevertheless falls into one of the hearsay exceptions that would allow the matrix to be admitted into evidence, so it is not necessary 14 M.R.E. 801(c). 8 to continue the inquiry. The trial judge did not abuse his discretion in ruling that the Morgan Matrix was hearsay and therefore inadmissible as evidence. ¶23. We emphasize that this holding is limited solely to the issue of the admissibility of the Morgan Matrix as evidence. We offer no opinion as to the admissibility of the matrix for other purposes, such as those contemplated by the exceptions listed under M.R.E. 803. B. Admissibility of Morgan’s Testimony Regarding Settlement ¶24. Unlike the matrix, Morgan’s in-court testimony about how he handled the settlement was not hearsay since it was not an out-of-court statement. Although Morgan stated in his deposition that he devised his matrix, in part, by referring to a similar matrix prepared by another attorney, the mere existence of the document would not prevent Morgan from testifying about how he personally determined the settlement values of each of his clients’ cases and the amounts of his previous settlements. Based on the arguments presented at trial and here, Morgan’s deposition testimony was not inadmissible hearsay. ¶25. The question then is whether Morgan needed to be qualified as an expert to offer his testimony. Under our rules, expert witnesses may offer opinion testimony where “scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue . . . .” 15 ¶26. Typically, an expert witness is an “outsider” to the case who evaluates the evidence in an attempt to explain it to the jury. Before experts may deliver opinions to the jury, experts must be vetted by the court and must satisfy certain criteria. By contrast, a fact 15 M.R.E. 702. 9 witness may be virtually any competent person 16 whose testimony is based on personal knowledge.17 Morgan was not qualified as an expert witness, but his testimony was based on personal knowledge. In other words, Morgan’s proffered testimony was a matter of fact rather than opinion, and the trial court erred in excluding it. ¶27. The defendants argue (and the trial court found) that Morgan’s estimation of the value of his clients’ claims was “speculative” opinion testimony that may only be offered by an expert witness under M.R.E. 702. But the plaintiffs were not offering Morgan’s testimony to establish his opinion of the value of their claims. Rather, it was being offered to show how Morgan in fact distributed the settlement money to his clients. While those decisions may have been based on Morgan’s opinions at the time, the decision-making process and the resultant matrix was, and is, a matter of fact. ¶28. From the vantage point of trial, Morgan’s past settlement-negotiation process is a matter of fact within Morgan’s personal knowledge and the rules provide no reason why he should not be allowed to testify about it. Therefore, it was not hearsay nor was it necessary to qualify Morgan as an expert before he could testify about the matter. ¶29. But even if Morgan’s testimony did constitute opinion rather than fact, our rules allow lay opinion testimony of this nature. Under Rule 701, a lay witness may offer opinion testimony that is “(a) rationally based on the perception of the witness, (b) helpful to the clear understanding of the testimony or the determination of a fact in issue, and (c) not based on scientific, technical, or other specialized knowledge within the scope of Rule 702.” Of these 16 M.R.E. 601. 17 M.R.E. 602. 10 three requirements, the first two are easily satisfied. Morgan’s settlement-negotiation process is clearly based on Morgan’s perception and was helpful to the determination of a fact in issue— indeed, the trial court essentially ruled that the plaintiffs had no case without it. The question then turns on whether Morgan’s opinions were “based on scientific, technical, or other specialized knowledge” usually reserved for experts. ¶30. On this point, the defendants actually make the strongest argument in favor of the admissibility of Morgan’s testimony. They observe that “Morgan has admitted that he was the person who exercised his discretion to decide how much of AHP’s block/lump sum settlement monies would be allocated to a given client of his.” 18 And later: At each point in [the process of creating his settlement matrix], Morgan came up with his opinions on, e.g., how many injury classification levels there should be, what should be the criteria for each level, which of his clients fell into which level, and what did he think was the value or worth of a claim that fell within a given level, and how much money he was going to allocate to a given level and a client in that level.19 ¶31. The defendants further emphasize that Morgan devised his matrix without consulting any medical experts. ¶32. Obviously, an opinion as arbitrary as the defendants suggest would never satisfy the strict requirements of expert witnesses under Rule 702 and our caselaw. And this is precisely why Rule 701 applies. As long as the opinion is not based on the kind of technical expertise required by Rule 702, a lay witness may offer opinion testimony if the other parts of the rule are met, as they are here. Since Morgan’s discretionary disbursement of the settlement funds 18 Emphasis in original. 19 Emphasis in original. 11 to his clients did not implicate the kind of specialized knowledge implicated by Rule 702, to the extent his testimony constitutes opinion, it was admissible under Rule 701. Therefore, the trial court erred in excluding Morgan’s testimony regarding how he devised the settlement matrix and how he disbursed the settlement funds to his clients.