The Expert's Examiner

April 9, 2019

What distinguishes this case is the absence of experts; the failure to use expert testimony potentially cost the losing party a significant tactical victory. Summary judgment motions are commonplace in litigation, once discovery has proceeded to an adequate point. They are the final stopping point before trial where the parties, most usually the defendants, can win the case on motion. To do so, one has to demonstrate to the court that no issue of material fact is truly in dispute and that, therefore, the court is free to decide the matter on the law.

Non-movants want desperately to demonstrate the opposite -- that a material question of fact does exist and that the claim in question must proceed to the fact-finder. In this case, both sides move for summary judgment on a statute of limitations defense asserted by Defendant UNB. Plaintiff FAMC won the motion before the trial court and upon appeal to the Eighth Circuit. The question of damages then heightened in importance, as the case would either go to trial upon remand or settlement negotiations would seek a starting level. UNB charged that FAMC did not seek to mitigate its damages, as it sold one of the mortgage loans in question at a substantial discount. UNB established that FAMC did not have the loan appraised and pointed out other things FAMC might have done before re-selling the loan. The Court describes this as merely casting “metaphysical doubt” about FAMC’s process and finds it insufficient to create genuine issues of material fact.

What UNB should have done, the Court opines, was to make its point sharply through the use of expert testimony. Instead, it failed to submit evidence showing a genuine issue of material fact existed about the reasonableness of FAMC’s mitigation efforts. UNB established that FAMC did not have the loan appraised and pointed out other things FAMC might have done before re-selling the loan. But this is argument, not evidence. It merely casts “metaphysical doubt” about FAMC’s process, the Court criticizes. UNB might have carried its burden had it presented expert testimony of industry customs and what the appraised loan value would have been.

"UNB failed to produce or point to any concrete evidence," the Court instructs, "showing that FAMC's mitigation efforts were unreasonable.... To avoid summary judgment, UNB needed to do more than suggest possible problems with FAMC's mitigation. UNB needed to present and point to evidence that affirmatively demonstrated FAMC’s mitigation efforts were not reasonable. For example, expert testimony on what the appraisal value of the property would have been might have been sufficient to create a genuine issue of material fact; simply asking why no appraisal was done is certainly not enough. Expert testimony that industry custom dictates certain mitigation steps perhaps could create a genuine issue of material fact; simply pointing out that FAMC had not taken certain steps cannot."

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