The United States of America v. Sauer
The United States of America, for the use and benefit of Bergelectric Corp. v. Sauer, Inc.
- Edward Davila
- 5:18-cv-00612
- U.S. District Court · Northern District of California
- 6
In Bergelectric v. Sauer, Judge Davila denied Sauer’s motion to exclude Mike Zollman’s expert testimony about construction damages and causation.
Sauer’s motion was denied, so Mike Zollman’s testimony about Bergelectric’s alleged productivity and delay damages, and his reliance on project correspondence in discussing causation, was not excluded from the bench trial. The order did not decide the parties’ underlying liability or damages dispute.
What happened
The United States of America, for the use and benefit of Bergelectric Corp. v. Sauer, Inc. involved Sauer’s request to keep expert Mike Zollman from testifying about Bergelectric’s claimed construction damages and the causes of its alleged productivity losses and delays.
Sauer challenged Zollman’s methods for calculating lost productivity during rough-in and finish work, his daily-rate calculation for delay-related jobsite costs, and his use of project correspondence in discussing causation. The court concluded that the challenges generally concerned the strength of the evidence rather than whether it could be admitted, and that Sauer could address them through competing evidence and cross-examination.
Judge Davila denied Sauer’s motion to exclude Zollman’s expert testimony. The ruling allowed the testimony to be presented at the bench trial but did not decide whether Bergelectric was entitled to the claimed damages or whether Sauer caused them.
The detailed version
- The United States of America v. Sauer · No. 5:18-cv-00612
- Edward Davila
- Jan. 29, 2020
Background
Sauer moved under Federal Rule of Evidence 702 to exclude the expert testimony of Mike Zollman concerning Bergelectric’s claimed damages. The challenged opinions addressed: (1) lost productivity for rough-in work using a “measured mile” analysis; (2) lost productivity for finish work using a percentage derived from the rough-in analysis; (3) a daily rate for jobsite overhead costs allegedly caused by delay; and (4) causation opinions that relied on project meeting minutes, letters, and other correspondence.
The case was scheduled for a bench trial, meaning the judge—not a jury—would decide the facts. The court explained that the expert-evidence gatekeeping role is less demanding in a bench trial because there is no jury to be influenced by unreliable evidence. Sauer did not challenge Zollman’s qualifications as an expert.
Court’s Analysis
For rough-in work, Zollman calculated $1,123,809.37 in alleged lost-productivity damages using a measured-mile analysis. That method compares an unimpacted period, area, or activity with an impacted one and treats the difference in labor or equipment hours as the loss caused by the disruption. Sauer argued that the underlying records had several problems, including differences between the work performed during the unimpacted and impacted periods, limited cost codes, errors in daily reports, and the aggregation of work across multiple floors and buildings.
The court held that these alleged flaws went to the weight of the testimony—the amount of credibility or importance the testimony should receive—rather than its admissibility. The court stated that the issues could be tested through competing evidence and cross-examination.
For finish work, Zollman calculated $314,528.36 in alleged lost-productivity damages. He derived a 49.9% loss percentage from the rough-in analysis, applied it to the finish-work hours, and multiplied the resulting hours by an hourly labor cost. Sauer argued that the method lacked a measured-mile comparison, lacked a factual basis for applying the rough-in percentage to finish work, assumed similar working conditions, failed to show that finish work was impacted, and conflicted with Bergelectric’s accounting records.
Bergelectric responded that a measured-mile analysis could not be performed because the entire finish-work period was impacted. It also asserted that rough-in and finish work faced similar conditions, including trade stacking, out-of-sequence work, compression, multiple passes, go-backs, rework, concurrent work, and interference from material staging. The court found the finish-work analysis reasonably supported by a sound basis and methodology and concluded that Sauer could challenge it at trial.
For delay damages, Zollman calculated $497,402.36 based on average jobsite overhead costs, including cleanup and general labor, equipment rentals, office supplies, material handling, per diem, supervision, temporary-power maintenance, travel, and vehicles. Sauer argued that the calculation was artificially high because some costs were not necessarily affected by the alleged delays. The court agreed with Bergelectric that the daily-rate methodology was common in the construction industry and held that disputes over which costs belonged in the analysis concerned the testimony’s weight rather than its admissibility.
Finally, Zollman relied on project correspondence in opining that Sauer caused Bergelectric to lose labor productivity. Sauer argued that this improperly took over the factfinder’s role. The court rejected that argument, explaining that Zollman was not offering expert opinions about the correspondence itself. Instead, he used the correspondence as background information and as a basis for his opinions. The court also stated that the correspondence contained party admissions under Federal Rule of Evidence 801 and could reasonably support Zollman’s causation analysis.
Disposition
Judge Edward J. Davila ordered that Sauer’s motion to exclude Mike Zollman’s expert testimony was DENIED. The order addressed whether the testimony could be presented; it did not determine the ultimate amount of Bergelectric’s damages or whether Sauer was legally responsible for them.
Read the full 6-page opinion on CourtListener, the free public archive maintained by the Free Law Project.