|
 | |
|
Drywaller, Estimator Were Properly Allowed to Give Expert Testimony, U.S. Appeals Court Rules
|
|
September 15, 2008
|
|
|
|
By Laura Bourgeois
Thelen LLP
Royal International Drywall and Decorating, Inc. employed tapers as part of installing drywall in tract housing. Royal entered into a collective bargaining agreement with their union. Royal agreed to compensate the employees based on hours worked rather than on the usual piece-work basis, i.e. pieces of drywall installed. The employees’ union sued Royal alleging that Royal breached the agreement. It claimed that Royal in fact paid by the piece and not by the hour and in doing so failed to make health and welfare contributions for all hours worked.
At trial, the union claimed that Royal’s timesheets did not record all hours worked and were rigged to match the project budget. The union put forward the results of a materials audit conducted on Royal. The audit used the amount of raw materials that Royal purchased to calculate the amount of drywall installed. Then, the actual hours worked were calculated based on the amount of drywall installed and the average rate of drywall installation for a taper. Royal insisted that its timesheets were accurate. It vigorously contested the average productivity rate for tapers.
In a bench trial, the U.S. District Court judge held that the timesheets did not reflect all hours worked. The court then had to establish an alternative means of determining the number of hours worked in order to calculate damages. After hearing evidence, the trial court followed the materials audit, applied an installation rate of 2.86 sheets of drywall an hour and awarded damages on that basis. Royal appealed.
The U.S. Court of Appeals for the 7th Circuit affirmed. Trustees of the Chicago Painters and Decorators Pension, Health and Welfare, and Deferred Savings Plan Trust Funds v. Royal International Drywall and Decorating, Inc., 493 F.3d 782 (7th Cir. 2007).
On appeal, Royal first argued that the District Court was wrong in finding that the employees’ timesheets did not accurately reflect hours actually worked. Citing 29 USC §1059(a)(1), the appeals court noted that an employer must “maintain records with respect to each of his employees sufficient to determine the benefits due or which may become due to such employees.” It noted that prior cases had characterized sufficient records as being “reliable, contemporaneous records.”
After reviewing factual findings by the trial court, the appeals court agreed that Royal had failed to maintain sufficient records of hours worked. It noted that the trial court found only 5 of 263 timesheets recorded hours on a daily basis while the rest recorded them only on a weekly basis. It found the hours worked and the hours budgeted matched on a substantial majority of timesheets. Some timecards contained handwritten notations indicating an effort to allocate hours consistent with budget. Employees testified that they regularly worked more hours than shown on timesheets.
In reviewing the District Court’s damage calculation, the appeals court began its analysis by noting that the rate of drywall installation was the crux of the appeal.
Royal objected to the trial court’s admission of the testimony of two experts on the rate of drywall taping. The appeals court wrote that its role in such disputes is to review the trial court’s application of criteria set out in Daubert v. Merrell Dow Pharmaceutical, Inc., 509 U.S. 579 (1993) and Federal Rules of Evidence Rule 702: 1) whether the proposed witness would testify to valid scientific, technical or other specialized knowledge; and 2) whether the witness’ testimony will assist the trier of fact. If the proper framework was applied, the appeals court reviews admission of the expert’s testimony for abuse of discretion.
One expert, John Hull, testified that he had worked for years taping drywall and had trained apprentice tapers for more than 10 years. In evaluating the reliability of his testimony, the trial court observed: “If this gentleman is not an expert on the issue of how much can be reasonably expected [of] a drywaller to do in a day, I don’t know [if] there is such a person.” The other expert, Ian Parr, had extensive experience in cost estimating in the construction industry. The trial court wrote: “This is a gentlemen who does cost estimating on a regular basis, he uses a source that’s widely recognized and agreed to in the construction industry.. [and] has done [cost estimating] for 30 years.”
Royal argued that the this testimony was not sufficiently scientific. The appeals court noted that the Supreme Court, in Daubert, did not limit expert testimony to scientific issues and permitted it based on technical or other specialized knowledge. The appeals court also noted that experts could be qualified based on experience as well as academic training. It wrote that it considered “a proposed expert’s full range of practical experience as well as academic or technical training when determining whether that expert is qualified to render an opinion in a given area.”
The appeals court also found that the experts’ testimony assisted the trial court, thereby satisfying the framework requirement. And, it concluded there was no abuse of discretion in admitting the experts’ testimony about the rate of production.
Royal also argued that the District Court was wrong in determining that the productivity rate was 2.86 sheets of drywall an hour. Because this was a question of fact best determined by the fact-finder (here, the District Court judge), the factual determination would have to be clearly erroneous for the appellate court to overrule it. Royal did not meet this standard, the appeals court held.
If you would like to receive legal reports and updates more quickly, by e-mail, click here and fill out the mailing list form.
For more information about the issues covered in this report, please contact Laura Bourgeois in our Washington, D.C. office at 202-508-4310 or at lbourgeois@thelen.com or contact your Thelen attorney. For more information about Thelen’s Construction and Government Contracts Department, click here.
©2008 Thelen LLP
|
|
|
