Kerry Bodenhamer Farms, LLC v. Nature's Pearl Corp.

2018 NCBC 136

KERRY BODENHAMER FARMS, LLC, Plaintiff, v. NATURE'S PEARL CORPORATION, Defendant.

No. 16 CVS 217

Superior Court of North Carolina, Davie

December 27, 2018

Wyche P.A., by Wade S. Kolb, III, Matthew T. Richardson, and Eric B. Amstutz, and Brooks, Pierce, McLendon, Humphrey &amp Leonard, LLP, by Kearns Davis, Eric M. David, and Jessica Thaller-Moran, for Plaintiff Kerry Bodenhamer Farms, LLC.

Nelson Mullins Riley & Scarborough, LLP, by G. Gray Wilson and Lorin J. Lapidus, for Defendant Nature's Pearl Corporation.

ORDER AND OPINION ON MOTIONS IN LIMINE

ADAM M. CONRAD SPECIAL SUPERIOR COURT JUDGE.

1. This case is scheduled for trial on January 28, 2019. In this Order, the Court must decide whether to exclude certain opinions offered by each party's expert witness.

I. BACKGROUND

2. Earlier opinions describe in detail the nature of this case and its procedural history. See Kerry Bodenhamer Farms, LLC v. Nature's Pearl Corp., 2018 NCBC LEXIS 84 ( N.C. Super. Ct. Aug. 15, 2018); Kerry Bodenhamer Farms, LLC v. Nature's Pearl Corp., 2017 NCBC LEXIS 27 ( N.C. Super. Ct. Mar. 27, 2017). Thus, the Court provides only a short summary here in lieu of a detailed background.

3. This action arises out of a contract dispute. Defendant Nature's Pearl Corporation sells juices and related products that require muscadine grapes. Plaintiff Kerry Bodenhamer Farms, LLC ("KB Farms") is one of its grape suppliers. In January 2012, Nature's Pearl and KB Farms executed a written contract in which Nature's Pearl obtained the exclusive right to purchase all of KB Farms's grapes on an annual basis for twenty years. As it turns out, the contract lasted just three. The flashpoint was a single load of grapes delivered in September 2014. After pressing the grapes, Nature's Pearl tested the alcohol content of the juice and determined that it was too high. Nature's Pearl refused to pay for the load and, several months later, terminated the contract. KB Farms argues that there was nothing wrong with the grapes and that, having accepted them, Nature's Pearl's termination was without cause. Each party now accuses the other of breaching the contract.

4. One key issue in this case is whether the September 2014 shipment was fermented at the time of delivery. Nature's Pearl contends that it was and intends to offer Dr. Reza Ghaedian as an expert witness in support of that position. Ghaedian will opine that the likely cause of fermentation was a two-day delay between the time that KB Farms picked the grapes and the time that it shipped them. (Br. in Supp. of Pl.'s Mot. Lim. 2, ECF No. 92.1 ["Pl.'s Br. in Supp."].) Ghaedian will also testify that the Brix level, or sugar content, of the grapes was not the cause of the alcohol content and that it would not have been feasible for Nature's Pearl to test the alcohol content of the grapes before pressing them into juice. (Pl.'s Br. in Supp. 2.) ^[*]

5. KB Farms contends that the grapes were not fermented at the time of delivery. It has pointed to evidence intended to show that Nature's Pearl combined the juice from the September 2014 shipment with juice from other growers before testing it, thus compromising the test results. KB Farms also expects to call Dr. Barclay Poling as an expert witness to testify that any fermentation in the disputed shipment likely occurred after delivery and during processing by Nature's Pearl. (See Br. in Supp. of Def.'s Mot. Lim. 5, ECF No. 91 ["Def.'s Br. in Supp."].)

6. Poling is also the damages expert for KB Farms. He opines that KB Farms suffered lost profits of roughly $150, 000 to $200, 000 when Nature's Pearl refused to accept the 2015 harvest after terminating the contract. (See Def.'s Br. in Supp. Ex. 1 at 14 ["Poling Report"].) He also concludes that KB Farms will suffer future lost profits of more than $1.7 million through 2031, the end of the contract's 20-year term. (See Poling Report 14-15.) These opinions are set out in a sixteen-page report.

7. Each party has filed a motion in limine, seeking to exclude the testimony of the other's expert. (See ECF Nos. 90, 92.) The Court held a hearing on December 13, 2018, and the motions are ripe for disposition.

II. LEGAL STANDARD

8. "A motion in limine seeks pretrial determination of the admissibility of evidence to be introduced at trial." State v. Britt, 217 N.C.App. 309, 313, 718 S.E.2d 725, 728 (2011). "The trial court has wide discretion in making this advance ruling and will not be reversed absent an abuse of discretion." Hamilton v. Thomasville Med. Assocs., 187 N.C.App. 789, 792, 654 S.E.2d 708, 710 (2007) (quoting Heatherly v. Indus. Health Council, 130 N.C.App. 616, 619, 504 S.E.2d 102, 105 (1998)). Furthermore, "[t]he Court's ruling on motions in limine is interlocutory and 'subject to modification during the course of the trial.'" Insight Health Corp. v. Marquis Diagnostic Imaging of N.C., LLC, 2017 NCBC LEXIS 91, at *6 (N.C. Super. Ct. Oct. 3, 2017) (quoting Hamilton, 187 N.C.App. at 792, 654 S.E.2d at 710).

9. "Expert testimony is governed by North Carolina Rule of Evidence 702, which is now virtually identical to its federal counterpart and follows the Daubert standard for admitting expert testimony." Insight Health Corp. v. Marquis Diagnostic Imaging of N.C. , LLC, 2017 NCBC LEXIS 14, at *39-40 (N.C. Super. Ct. Feb. 24, 2017) (internal citations and quotation marks omitted). In other words, North Carolina trial courts now perform the same "gatekeeping role" that federal district courts have long performed. Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 597 (1993). In applying Rule 702, the Court may look to federal decisions as persuasive authority. See Insight Health Corp., 2017 NCBC LEXIS 14, at *40.

10. Rule 702(a) sets out a three-part test. First, the "expert testimony must be based on specialized knowledge that will assist the trier of fact." Id. at *39. Second, the expert must be qualified through some combination of appropriate education and experience. See id. Third, the expert's testimony must be reliable, meaning that it is "based upon sufficient facts or data," is "the product of reliable principles and methods," and applies these "principles and methods reliably to the facts of the case." Id. at *39-40 (quoting N.C. R. Evid. 702(a)(1)-(3)). "The precise nature of the reliability inquiry will vary from case to case depending on the nature of the proposed testimony," and "the trial court has discretion in determining how to address the three prongs of the reliability test." State v. McGrady, 368 N.C. 880, 890, 787 S.E.2d 1, 9 (2016).

III. PLAINTIFF'S MOTION

11. KB Farms asks the Court to disqualify Ghaedian on the grounds that he lacks appropriate education and experience. (See Pl.'s Br. in Supp. 2, 3, 4.) It also argues that his opinions are not based on sufficient facts and data and are therefore unreliable. (See Pl.'s Br. in Supp. 4, 10.)

12. The requirement that an expert must be qualified has been "liberally construed." United States v. Velasquez, 64 F.3d 844, 849 (3d Cir. 1995). "Differences in expertise bear chiefly on the weight to be assigned to the testimony by the trier of fact, not its admissibility." Huss v. Gayden, 571 F.3d 442, 452 (5th Cir. 2009); see also Holbrook v. Lykes Bros. S.S. Co., Inc., 80 F.3d 777, 782 (3d Cir. 1996) ("[M]ost arguments about an expert's qualifications relate more to the weight to be given the expert's testimony, than to its admissibility."). Such is the case here.

13. Ghaedian holds a Ph.D. in food science and technology. (Def.'s Designation of Exp. 4, ECF No. 60 ["Def.'s Designation"]; see also Br. in Opp'n to Pl.'s Mot. Lim. 3, ECF No. 94 ["Def.'s Opp'n"].) His master's thesis related to "muscadine grape juice components and properties." (Def.'s Designation 6.) And he served, for a short time, as a quality assurance manager at a processing facility for muscadine grapes. (See Def.'s Designation 6, 7.) This combination of education and practical experience, however brief, is sufficient to qualify Ghaedian as an expert on factors that contribute to fermentation in muscadine grapes.

14. KB Farms argues that Ghaedian's experience is stale because his work with muscadine grapes dates to the early 1990s. (See Pl.'s Br. in Supp. 3.) This is a fair subject for cross-examination, but it is not disqualifying. KB Farms has not shown that Ghaedian's knowledge is too old to be useful to the jury, especially given that he has remained active in related areas (including other fruits, such as cranberries). See, e.g., Antioch Co. Litig. Trust v. McDermott Will & Emery, LLP, 2016 U.S. Dist. LEXIS 114022, at *7 (S.D. Ohio Aug. 25, 2016) (holding that "the fact that [expert] has not practiced in 23 years" was subject of cross-examination but not disqualifying); see also Am. Auto. Ins. Co. v. First Mercury Ins. Co., 2017 U.S. Dist. LEXIS 163346, at *15-16 (D.N.M. Sept. 30, 2017); Ryan v. Nat'l Union Fire Ins. Co., 2010 U.S. Dist. LEXIS 53910, at *8-9 (D. Conn. June 2, 2010); Pension Comm. of the Univ. of Montreal Pension Plan v. Banc of Am. Sec., LLC, 691 F.Supp.2d 448, 479 (S.D.N.Y. 2010); Owens v. Amtrol, Inc., 94 F.Supp.2d 952, 955 (N.D. Ind. 2000).

15. As to reliability, KB Farms argues that Ghaedian made only a cursory investigation. (See Pl.'s Br. in Supp. 4, 5.) Ghaedian depended primarily on information gathered from Achan Smith, a Nature's Pearl employee who was present at the time the grapes were received and processed. Ghaedian did not visit Nature's Pearl's processing facility, and during his deposition, he was unfamiliar with some of Nature's Pearl's processes, could not confirm that the sampled grapes all came from the same grower, and did not review available production records. (See Pl.'s Br. in Supp. 5, 11-12.)

16. By and large, though,...