United States District Court, S.D. Texas, Houston Division
In re BROWN MEDICAL CENTER, INC., Debtor.
DICK DEGUERIN, Defendants. ELIZABETH M. GUFFY, Plan Agent, Plaintiff, Bankruptcy Adversary No. 15-3228
MEMORANDUM AND ORDER
F. ATLAS SENIOR UNITEJ3 STATES DISTRICT JUDGE.
Guffy, the Plan Agent under the confirmed Chapter 11 Plan of
Liquidation in the Brown Medical Center, Inc. bankruptcy,
filed this adversary proceeding seeking to avoid certain
attorney's fee and related litigation expense payments as
fraudulent transfers. The case is now before the Court on the
Plan Agent's Motion to Exclude the Opinions and Testimony
of James M. McCormack (“Motion to Exclude”) [Doc.
# 90], to which Defendant Dick DeGuerin filed a Response
[Doc. # 131], and the Plan Agent filed a Reply [Doc. # 133].
The Court has reviewed the record and the applicable legal
authorities. Based on this review, the Court denies the
Motion to Exclude.
Brown, the owner of 100% of the shares of Debtor Brown
Medical Center, Inc. (“BMC”), was represented by
attorneys DeGuerin and others in connection with criminal
cases against him, including prosecutions for assault and for
having a marijuana field on his property. Plaintiff alleges
that BMC transferred funds to DeGuerin after it became
insolvent. Plaintiff alleges that BMC had no independent
legal obligation to make the transfers, which were for
Brown's sole benefit.
January 2013, Brown filed a voluntary Chapter 11 bankruptcy
petition. On October 15, 2013, Brown's Chapter 11 Trustee
filed a voluntary Chapter 11 bankruptcy petition on behalf of
BMC. The Bankruptcy Court appointed Plaintiff Elizabeth Guffy
as the Chapter 11 Trustee for BMC. On October 1, 2014, the
Bankruptcy Court confirmed a plan of liquidation in BMC's
bankruptcy case and appointed Guffy as the Plan Agent.
filed this Adversary Proceeding, asserting fraudulent
transfer claims under 11 U.S.C. § 548(a)(1)(B) and under
TUFTA. See First Amended Complaint [Doc. # 16]. By
Memorandum and Order [Doc. # 15] entered February 3, 2016,
this Court withdrew the reference of this Adversary
Proceeding and retained the case on its own docket.
has designated James M. McCormack as an expert witness in
this case. McCormack has issued a written report, a rebuttal
report, and he has been deposed. McCormack opines that there
was an attorney-client relationship between DeGuerin and BMC,
and that funds provided to DeGuerin and maintained in
DeGuerin's IOLTA Trust Account remained the property of
BMC. The Plan Agent filed her Motion to Exclude, which has
been fully briefed and is now ripe for decision.
LEGAL STANDARD FOR EXPERT OPINIONS
who are qualified by “knowledge, skill, experience,
training or education” may present opinion testimony to
the jury. Fed.R.Evid. 702; see, e.g., Whole Woman's
Health v. Hellerstedt, __ U.S. __, 136 S.Ct. 2292, 2316
(2016); Moore v. Ashland Chem., Inc., 151 F.3d 269,
276 (5th Cir. 1998) (en banc); Huss v.
Gayden, 571 F.3d 442, 452 (5th Cir. 2009). To be
admissible, an expert's proffered testimony must be both
relevant and reliable. Daubert v. Merrell Dow Pharms.,
Inc., 509 U.S. 579, 591-92 (1993); Carlson v.
Bioremedi Therapeutic Sys., Inc., 822 F.3d 194, 199 (5th
expert testimony must be relevant and the expert's
proposed opinion must be one that would assist the trier of
fact to understand or decide a fact in issue. See
Weiser-Brown Operating Co. v. St. Paul Surplus Lines Ins.
Co., 801 F.3d 512, 529 (5th Cir. 2015); Bocanegra v.
Vicar Servs., Inc., 320 F.3d 581, 584 (5th Cir. 2003)
(citing Daubert, 509 U.S. at 591-92). “A party
seeking to introduce expert testimony must show (1) the
testimony is based upon sufficient facts or data, (2) the
testimony is the product of reliable principles and methods,
and (3) the witness has applied the principles and methods
reliably to the facts of the case.” Huss, 571
F.3d at 452 (citing Smith v. Goodyear Tire & Rubber
Co., 495 F.3d 224, 227 (5th Cir. 2007)); see also
Carlson, 822 F.3d at 199.
requires that the proponent of the expert testimony must
present some objective, independent validation of the
expert's methodology. See Brown v. Illinois Cent. R.
Co., 705 F.3d 531, 536 (5th Cir. 2013). The objective of
the Court's gatekeeper role is to ensure that an expert
“employs in the courtroom the same level of
intellectual rigor that characterizes the practice of an
expert in the relevant field.” Kumho Tire Co. v.
Carmichael, 526 U.S. 137, 152 (1999); Hodges v. Mack
Trucks Inc., 474 F.3d 188, 194 (5th Cir. 2006).
Court's gatekeeping role is no substitute, however, for
the adversarial process. See Pipitone v. Biomatrix,
Inc., 288 F.3d 239, 250 (5th Cir. 2002). “Vigorous
cross-examination, presentation of contrary evidence, and
careful instruction on the burden of proof are the
traditional and appropriate means of attacking shaky but
admissible evidence.” Daubert, 509 U.S. at
596; MM Steel, L.P. v. JSW Steel (USA) Inc., 806
F.3d 835, 852 (5th Cir. 2015).