Expert disclosures and the property owner rule

Originally published by Byron Henry.

The Dallas Court of Appeals recently issued an opinion dealing with two recurring topics: the property owner rule and timely designation of experts. In this foreclosure case, the Court addressed market value testimony by four witnesses. In doing so, the Court applied TRCP 193.6 and the property owner rule.

First, the Court addressed two expert witnesses that were designated timely pursuant to a scheduling order, but not within thirty days of service of the defendant’s request for disclosures. The Court, in an opinion by Justice Whitehill, held that the designation was untimely because TRCP 194 requires disclosure of expert information within thirty days of service. The Court stated that “[a]bsent disclosure or timely supplementation of [the experts’] mental impressions and opinions, the trial court did not err by excluding their opinions regarding the property’s value.”

Interestingly, the Court did not consider, or mention, TRCP 195.2, which expressly allows disclosure of experts, by the later of thirty days after the request is served or ninety days before the end of the discovery period, “unless otherwise ordered by the court.” It is unclear from the Court’s opinion whether the designation was untimely with respect to the end of the discovery period. As noted above, however, the Court’s opinion acknowledged that the witnesses were designated “as expert witnesses on May 10, 2013, the deadline for doing so given in the trial court’s scheduling order.” The opinion places in doubt the reasonable assumption that a trial court’s scheduling order trumps the rule.

Second, the Court addressed testimony by two additional lay witnesses under the “property owner rule.” This rule is an exception to the requirement that an expert testify as to the value of property. But the exception has it limits. As to the first witness, the Court applied the rule set forth in Reid Road Mun. Util. Dist. No. 2 v. Speedy Stop Food Stores, Ltd., and held that one of the plaintiffs was not qualified to testify because as a limited partner he was “neither an officer nor an employee of [the property owner.]” As for the second witness, the Court held that while a witness may be “qualified” to testify as property owner, the rule still requires “the testimony meet the same requirements as any other opinion evidence.” Quoting Nat. Gas Pipeline Co. of Am. v. Justiss, the Court noted:

Because property owner testimony is the functional equivalent of expert testimony, it must be judged by the same standards. This burden is not onerous, particularly in light of the resources available today. . . . But the valuation must be substantiated; a naked assertion of ‘market value’ is not enough.”

Here, the Court held that there was “no substantiation” for the opinion on market value. Thus, the Court held that the trial court did not abuse its discretion by excluding the lay witnesses’ testimony. Accordingly, the Court affirmed the trial court’s judgment. The opinion in Grapevine Diamond, L.P. v. City Bank can be accessed here.

Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.

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